European Economic Area, a European Trade agreement (Essay Sample)

The EEA agreement
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EEA stands for the European Economic Area, and it’s a European Trade agreement which comprises of 31 member states. It was established in 1992 as an extension of the European Union (EU) to serve as a link for the non-member states. Majorly, the member states which were to be linked with the EU were the European Free Trade Association (EFTA) members who are Iceland, Norway, Liechtenstein and Switzerland. All the members of EEA have a single market which is governed by the same economic rules which enable free movement of goods, services, labour and capital in the region. In Article 1 of EEA, it states that the primary purpose of the block is to promote a continuous and balanced strengthening of trade and the economic relation among the member states. This essay will critically discuss whether the EFTA members, especially Norway, need an EEA agreement.
Norway has benefited a lot from the EEA agreement. Firstly, EEA allows free movement of the goods within its member’s states (The EEA Agreement, 2019). It means that Norway freely sells its goods within the internal market created by the EEA. The main reason for this is due to border custom duties and other trade restrictions which are prohibited by the EEA. Norway thus enjoys a broader market for its goods created by the EEA. It could not enjoy this market under the EFTA agreement, which is composed of only four countries (Lang, 2013). For this reason, Norway’s fish is sold to various countries in the block without tariffs. On the other hand, Norwegians can enjoy import free goods such as vehicles and mineral fuels from EEA countries.
EEA agreement enables citizens of the member states to reside in any state which they want to live. EEA has allowed movement of labour and person among all it states (The EEA Agreement, 2019). Due to this, unemployed Norwegians can seek job opportunities from any of the EEA member states. Additionally, Norwegian students can seek education in any of the member states under the law. Free movement of labour among the countries is essential, especially for business and other sectors of development. Norway stands to benefit from experienced people from the EEA area, especially in the field of medicine and research. Students studying in the regions well-known universities such as Oxford and Cambridge universities will mean the country is well equipped enough well-trained labour.
Under the EEA, companies can be established in any state. EEA agreement gives equal term and right for being set up in all member states. Norway has seen its companies create operating branches in various countries (Baudenbacher, 2016). Such an economic activity has led to an increased flow of resources in the country. On the other hand, various companies have also set up operational sites in Norway. Many people have immensely benefited from the employment opportunities which come with such an opportunity (Holmøyvik, 2015). Additionally, setting up of industries in Norway which never existed before has made it possible for the exchange of knowledge. For example, metal fabrication is not a traditional knowledge in Norway, but after setting up of metal-related industries in the country, the expertise in the sector has been improved significantly.
Capital movement between the EEA members has led to the movement of investments between Norway and other EEA members states (The EEA Agreement, 2019). Cross-border investments have enabled the Norwegians to open up bank accounts in any EEA state. On the other hand, citizens from other EEA states can invest in shares and funds in Norway without discrimination. EEA companies can also invest in Norway without any restrictions from any state government. Evidently, EEA has led to increased capital flow in Norway. FDI investments are very important for the country’s economic development. Norway could not enjoy this when it is not under EEA.
Norway joining EEA has not has been disadvantaged it in various sectors. The country is not a member of the European Union, and this has seen its goods in the EEA be subjected to various restrictions (Lang, 2013). One of the rules which have disadvantaged its interaction with other EEA members is the CE mark which is required for all goods being traded in the EU market. Most of the goods manufactured by Norway companies do not contain the CE mark since it is not a member of EU. Selling of these goods in the EEA market has been a challenge due to that requirement. A product undergoes through various checks in that specific country before it’s approved to be sold (Austvik, 2017). Generally, this reduces the rate at which Norway manufactured goods flow in the whole EAA market.
EEA does not cover a common agricultural and common fisheries policy. It has been a disadvantage to the Norway products from these sectors to compete favourably with the EU products (Lang, 2013). Heavy subsidization of the EU agricultural goods makes the cheaper that Norway products thus causing unfairness in competition in the market. Additionally, Norwegian fisheries face unfair competition from other EEA members due to due subsidization. As EEA has laws which ensure there is fair competition among the companies in all member states, companies in these two sectors remain disadvantaged in the EEA market.
Other countries which are members of EFTA members, Lichtenstein and Iceland, have had various benefits drawn from being EEA members. One of the main reason for joining was to enjoy free movement of trade goods in the cross-borders. Gaining access to the enlarged market area created by EEA had positive gains from these countries (van Randwyck, 2011). For example, Lichtenstein has been recorded to have Germany has its largest tra