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The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four European states: Iceland, Liechtenstein, Norway and Switzerland.[4] The organization operates in parallel with the European Union (EU), and all four member states participate in the European Single Market and are part of the Schengen Area.[5] They are not, however, party to the European Union Customs Union.

Twice, in 1972 and in 1994, the Norwegian government had tried to join the EU (still the EEC, in 1973) and by doing so, leave the EFTA. However, both the times, the membership of the EU was rejected in national referendums, keeping Norway in the EFTA. Iceland applied for EU membership in 2009 due to the 2008–2011 Icelandic financial crisis, but has since dropped its bid.[10]

https://en.wikipedia.org/wiki/European_Free_Trade_Association

It seems like Norway wanted to become a member of the much wider EU instead or remaining in the much smaller EFTA, but both times, the population rejected it during national referendums. Is there a reason why the population is wary of Norway becoming a member of the much wider EU?

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While the EFTA's history can be a little confusing, it's not quite right to think of it as an alternate EU with a different membership. First, the scope and level of economic integration of the EFTA aren't as extensive as the EU's. For both Norway and Iceland, it seems fisheries played a big role, remaining outside the EU allowed these countries to avoid participating in the common fisheries and common agricultural policies and therefore to retain their own rules for these sectors. VAT rules is another big difference. All this is also why Norway and other EFTA countries are not part of the EU customs union. In the specific case of Norway, being a resource-rich country with an extensive oil industry also changes the calculation in several ways.

At the same time, all current EFTA members are also closely associated with the EU, either through the EEA (Iceland, Norway, Liechtenstein) or through a set of complex bilateral agreements (Switzerland). So for these countries, joining the EU wouldn't entail weakening their relationship with other EFTA members or a complete overhaul of their association with the EU. They are already in a free trade area and closely integrated in the EU single market. Consequently, the difference between the EU and EFTA/EEA is not the geographic extent of the free trade area (they overlap) but the level of integration and the specific set of rules that apply.

The confusing thing is that the EFTA did start as a kind of alternate free trade area. As the UK and Denmark and later most other members (Portugal, Austria, Finland, Sweden) joined the EU, the EFTA's original role became essentially irrelevant and the remaining members found other ways to associate with the EU (namely the EEA agreement). Because of this history, the EFTA court turned into an EEA court. In spite of its name, it is actually in Luxembourg (not an EFTA country but the seat of the EU's European Court of Justice) and does not include a judge named by Switzerland. It has three judges named by the three EFTA members that also belong to the EEA (in a little historical quirk, it did however have a Swiss judge as Carl Baudenbacher – who was named to the court by the government of Liechtenstein – is actually a Swiss citizen).

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Is there a reason why the population is wary of Norway becoming a member of the much wider EU?

The main opposing force to Norwegian EU membership is Senterpartiet, which is traditionally a farmers' party and still sees itself in that heritage. It is generally against centralisation (not just Norway vs. Brussels, but also rural municipalities vs. Oslo), and particularly opposed to anything external that would put restrictions and/or enforce competition on Norwegian agriculture. EU is perceived by them as the archetype of external regulations, and thus EU membership is a complete no-go for them. That is not to say they're entirely against trade agreements, but they emphasize picking specifically those deals that are actually advantageous to Norway.

Although Senterpartiet is only the third-largest party in Norway, it is quite dominant in the EU debate, and many of the voters for the left-wing and far-right parties side with it in this concern. The pro-EU position is mostly pushed by the conservative / neoliberal party Høyre, who tend to make the argument that Norway is for all practical purposes tied to Europe anyway and the main difference joining the EU would make is that it would gain more influence on its democratic decisions. In other words, that being in EFTA but not EU does not really make sense.

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  • How does the EFTA facilitate agricultural exports? The main point of the EEA (especially when you consider that Norway had to consent to essentially being a rule-taker on everything else and pay into the structural funds) is that agriculture is not covered.
    – Relaxed
    Jan 12 at 14:43
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    @Relaxed hm, yeah, I'm not sure it does except in the sense that EEA allows for cheaper imports of other things, which can also indirectly help farming. The point I was making is that Senterpartiet has a stance for cherry-picking those trade agreements that it sees as benefitial. Digging some deeper, they're actually against EFTA membership and would prefer having only bilateral agreements. So, regarding the question it seems to be more the case that Senterpartiet only accepts EFTA because it's the status quo but block any deepening of involvement. Jan 12 at 15:16

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