Are EFTA migration rules substantively different to EU migration rules?

Question

Are EFTA migration rules substantively different to EU migration rules?

IIUC freedom of movement applies per a definition in the EFTA Convention but Directive 2004/38/EC (the full EU FOM directive) does not automatically apply?

Answer 1

“EFTA rules” is a bit of misnomer as the EFTA is now a vehicle for some of the arrangements governing the relationship between Norway, Iceland, Liechtenstein, and Switzerland on the one hand and the EU on the other hand. Case in point: the EFTA court actually deals with EEA matters (and does not include Switzerland, more on that latter). This is a far cry from what the EFTA originally was, namely a competing economical alliance set up by the UK when it couldn't join the EEC.

Consequently, there is no “EFTA membership” that would be available to third countries. Current members have said as much and have no reason to welcome a new member (especially one as big, influential and troublesome as the UK) if it's not in good intelligence with the EU. And the UK would benefit only marginally from free-trade with Norway, Iceland, or Switzerland, which are relatively small countries.

The EFTA is not a kind of second tier of association with the EU either. What matters are the separate agreements EFTA countries have with the EU and especially the EEA. Under the terms of the EEA agreement, Iceland, Norway, and Liechtenstein are bound to apply most single market rules, very much including the freedom of movement for people. These countries also make payments to the EU structural funds. This status does not stem automatically from EFTA membership. It would probably be available to the UK if it wants to but risks being perceived as “Brexit in name only”.

Now, Switzerland is an interesting case. It's not part of the EEA or fully integrated in the single market, instead choosing a separate route through a series of “bilateral agreements” with the EU. These agreements do include comprehensive freedom of movement rights but also some restrictions (in particular the need to apply for a permit for EU citizens and a so-called “emergency brake” on immigration if the number of people moving into Switzerland is deemed too high).

These restrictions are still in flux and have not been fully tested: Switzerland is involved in on-going negotiations with the EU on the next step of the bilateral framework. A few years ago, the Swiss people voted to impose a hard cap on the number of people settling in the country in a given year but the government significantly watered down the proposal during the implementation phase to avoid clashing with the EU.

Brexit is also a significant challenge for Switzerland. Even if it's seldom seen that way, the fact is that the EU was willing to go quite far to accommodate the Swiss. It's not clear it can afford to do as much for a larger country that's leaving as it did for a small country seeking to get closer and it's therefore become more difficult to offer bespoke rules for the Swiss, lest they establish a precedent the UK could seek to emulate.