Common Market Law Review 29: 1171-1 198, 1992.

O 1992 Kluwer Academic Publishers. Printed in the Netherlands.

THE AGREEMENT ON A EUROPEAN ECONOMIC AREA

SVEN NORBERG*

1. Introduction

On 2 May 1992 in Oporto, Ministers from the nineteen EC and EFTA

Member States and the EC Comission signed the Agreement on a European Economic Area (EEA). On the same day the Ministers from the
seven EFTA States1 also signed the two agreements on the Establishment of a Surveillance Authority and a Court of Justice (here referred
to as the ESA-EFTA Court Agreement) and on a Standing Committee
of the EFTA States, through which the EFTA States create among
themselves the necessary institutions and structures required by the
EEA. Thereby a successful end was put to three years hard work, consisting of one year of preparatory work and almost two years of formal
negotiations. These negotiations, which have been the largest carried
out by any one of the Contracting Parties, have involved directly and
indirectly several thousand people. The signed copy of the EEA Agreement contains in its thirteen languages some 15,000 pages and has a
weight of about 100 kgs. To this should be added that the volume in
only one of the thirteen languages of the some 1,600 acts of secondary
EC legislation which through a technique of reference have been integrated into the Agreement, is some 14,000 pages. In that perspective
it may even be said that the negotiations were carried out in a surprisingly short period of time.

* Director, Legal Affairs, EFTA Secretariat. Opinions expressed are those of the
author.
1. Since 1 Sept. 1991 the Member States of the European Free Trade Association
(EFTA) are Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland.

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The EEA has, since 1986, and during the negotiations as well as in
the Agreement, been characterized as both dynamic and homogeneous,
which obviously leads to considerable political and legal consequences.
The basic idea behind this ambitious and cumbersome work, which in
practice might be looked upon as a kind of widening of the internal market, can only be realized if the same legal rules are applied in a uniform
manner throughout all the 19 countries concerned. It is only thereby
that it will be possible to achieve equal treatment and non-discrimination of the some 380 million inhabitants in these countries.
In the areas covered by the Agreement the results shall thus, in principle, be the same whether Community rules or EEA rules are applied.
If the individuals and economic operators cannot be guaranteed that
that will be the case, it would seem that a primary objective behind this
work could be jeoparidized. The word homogeneous therefore does not
only concern homogeneity as to the application of the EEA rules as such
and the relationship between the EFTA and the EC states, but also
homogeneity between these rules and corresponding EC rules. Furthermore, homogeneity should not only prevail at the entry into force of the
Agreement, but also during the dynamic development of the Agreement, in step with the development of the Community in corresponding
areas. Obviously, it has been a major challenge for the negotiators to
secure this in the Agreement, while at the same time quaranteeing the
independence and decision-making autonomy of the Parties. It should
also be underlined that the result could hardly be the intended one, if
the Contracting Parties had not seen to it that in the Agreement itself
this objective is very clear.
Although there formally thus will be two separate legal orders, the
EC law and the EEA law, the two could, in practice, be said to form
a common European legal system.
The Agreement has 21 Contracting Parties, the European Economic
Community (EEC), the European Coal and Steel Community (ECSC),
the twelve EC Member States and the seven EFTA States. It is applicable between the EC and its Member States, on the one hand, and the
EFTA States, on the other, but also between the EFTA States.
As to the substantive scope of the Agreement, this may, in general
terms, be described as covering all EEA-relevant primary and secon-

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dary EC rules regarding the four freedoms of the EC internal market

and, in addition, a wide range of accompanying horizontal and flanking
policies, i.e. fields such as environment, research and development, social policy, consumer protection, education, statistics, where the EC
has or is developing common rules, policies or programmes.
The main substantive difference between the scope of the EEA and
that of a membership in the EC refers to the absence in the EEA of four
common EC policies. Thus, the EEA has no common external trade
policy; it is a fundamentally improved free trade area but not a customs
union, which means that border controls, although simplified, will not
be abolished. Further, although there is improved liberalization of
trade in agriculture and fish there are no common policies in those two
fields. Finally, there is no common policy on taxation. With this in
mind one may in general terms, and subject to certain limited transitional arrangements, say that the EEA Agreement contains all other relevant substantive EC rules. These rules shall, as common EEA rules according to a general rule of interpretation in Article 6 of the Agreement,
without prejudice to future developments of case law, in so far as they
are identical in substance to corresponding EC rules, in their implementation and application, be interpreted in conformity with the relevant
rulings of the EC Court of Justice given prior to the date of signature
of the Agreement. Thereby, the relevant EC case law is also taken over
into the Agreement. In the following only a brief account will be made
of the composition of the Agreement and the content of the substantive
parts thereof.
As to structure and content, the main part of the EEA Agreement,
129 Articles, is very close to corresponding provisions in the Treaty of
Rome. To start with, following the Preamble, Part I (Articles 1-7) contains the objectives and the most important principles for the relationship. Then follow, in Parts I1 and I11 (Articles 8-27 and 28-46, respectively), the basic rules concerning the four freedoms, in Part IV
(Articles 53 -65) provisions concerning competition and other common
rules (e.g. procurement and intellectual property), in Part V (Articles
66-77) horizontal provisions of importance for the four freedoms and
in Part VI (Articles 78-88) co-operation outside the four freedoms.
Part VII (Articles 89- 114) contains the institutional provisions, Part

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VIII (Articles 115- 117) the financial mechanism for the less developed
EC countries and, finally, Part IX (Articles 118- 129) general and final
provisions. In all areas where this has been possible, the provisions of
the Agreement have been formulated as closely as possible to corresponding provisions of EC law, in particular the EEC Treaty, as one
of the means of securing that the interpretation can be the same.
The main part of the Agreement2 is followed by 49 Protocols and 22
Annexes to the Agreement. While the Protocols contain rules on more
particular questions, such as the origin of goods, customs matters, trade
in fish or transitional periods, the Annexes provide for the integration
into the Agreement of around 1,600 legal acts of secondary EC legislation, which have been identified as relevant so-called "acquis communautaire". This is done through a technique of reference to the publication of these legal acts in the Official Journal of the Communities,
which is published in the nine EC languages. The complete text of these
legal texts is not reproduced in the Agreement itself, but the Annexes
mainly contain the headlines of the legal acts with certain technical
adaptations to the text. To this end, references to EC institutions, for
instance, are replaced by references to corresponding EEA organs, etc.
In each Nordic EFTA country, however, these texts will also be published in an authentic translation in the respective national language.
The total volume of these texts is around 14,000 pages.
The Final Act of the Agreement contains, inter alia, 29 Joint Declarations by all Contracting Parties, two Declarations by the EC Member
States and the EFTA States (on faciliation of border controls and on a
political dialogue on foreign policy issues) and 39 Declarations by one
or more Contracting Parties. In addition, the Final Act contains Agreed
Minutes and certain arrangements for the interim period.
It is the intention in this article to focus upon the institutional provisions of the EEA Agreement and thus not to describe the substantive
ones, which could also merit a special presentation.

2. Reproduced as a document in this Review.

EEA agreement
2. Legal and institutional issues
2.1 The legal technique and structure of the Agreement

As mentioned above, the political need to ensure a dynamic and

homogeneous EEA has had far-reaching consequences for the construction and drafting of the Agreement. It means that the Agreement must
contain rules which, in their substance, are identical to corresponding
EC rules and that it must be secured that these rules are implemented,
applied and interpreted in conformity with corresponding EC rules. It
also means that it must be possible, while safeguarding the decisionmaking autonomy of each of the Contracting Parties, to develop the
rules of the EEA in parallel with corresponding developments of the
EC.
These requirements have led the negotiators to follow very closely the
model of the EEC Treaty and other relevant EC legislation first of all
in the drafting of the Agreement and in the structure thereof. The 129
Articles of the main Agreement are thus mainly structured in the same
sequence as the EEC Treaty. Obviously, provisions of that Treaty
which are not relevant for the EEA, such as the rules regarding the customs union or other common policies which do not exist in the EEA,
do not appear in the EEA Agreement. On the other hand, the rules
which correspond to rules of the EEC Treaty are worded as closely as
possible to those rules. Since the Agreement, in its Protocols and Annexes, also contains other rules, which either are specific for the EEA
(this concerns in particular the Protocols) or correspond to secondary
EC legislation (the Annexes), it has been necessary in the Agreement to
mention here and there particular sets of EEC rules which are not specifically addressed in the EEC Treaty but only in the secondary legislation. This is the case with rules such as those on public procurement or
intellectual property.
One of the major challenges for the drafters has been to try, as far
as possible, to use the legal wording of the EEC Treaty as drafted in
1957 in spite of the fact that developments of case law during the thirtyfive years that have lapsed since, could have motivated a more "up dated" language. The reasons therefore have been the importance of en-

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suring that these rules in the EEA are interpreted in the same way as they
are in the Community. Any attempt to "codify" case law would otherwise risk jeopardizing the whole exercise and risk freezing the development of case law. Obviously, rules on transitional periods in the EC
which are no longer relevant have not been kept.
One element of the technique used has also been to make the objectives of the Contracting Parties very clear and thereby to assist and
guide the interpretation of the rules of the Agreement.

2.2 The Preamble

In the Preamble the Contracting Parties have expressed in sixteen recitals certain main principles and objectives on the creation of the EEA.
In these recitals, certain principles are emphasized regarding the positive effects of the EEA, the privileged relationship between the Contracting Parties, the further development of the EEA, the importance
of the EEA to individuals, the importance of the flanking policies, such
as environment, the social dimension, consumers' interests, the
strengthening of the scientific and technological basis of European industry. Of particular interest in this context may be mentioned the
fourth recital emphasizing, inter alia, the objective of establishing a dynamic and homogeneous European Economic Area, based on common
rules and equal conditions of competition and providing for the adequate means of enforcement, including at the judicial level. The eighth
recital addresses the important role that individuals will play in the European Economic Area, inter alia, through the exercise of the rights
conferred on them by the Agreement.
Another recital in the Preamble recalls that the conclusion of the
Agreement shall in no way prejudge future accession to the EC by any
EFTA State.
In the second but last recital, which was added to the text after the
first opinion of the EC Court of Justice of 14 December 1991,3 the
Contracting Parties emphasize the objective to arrive at and maintain
3. Opinion 1/91, O.J. 1992, C 110/Annotated by Schermers in this Review at
991-1009.

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a uniform interpretation and application of the Agreement and those

EC rules, which are substantially reproduced in the Agreement and to
arrive at equal treatment of individuals and economic operators as
regards the four freedoms and the conditions for competition.
As can be seen from these examples, the Preamble contains important expressions of the political ambitions and objectives of the Contracting Parties that will have to be taken into consideration when applying and implementing the Agreement.

2.3 The objectives and principles of the Agreement

Similar to the EEC Treaty, Part I of the Agreement lays down in Articles 1-7 specific provisions regarding the objectives and principles.
Thus the aim of the Agreement, as stated in Article 1(1), is to promote
a continuous and balanced strengthening of trade and economic relations between the Contracting Parties with equal conditions of competition, and the respect for the same rules, with a view to creating a homogeneous European Economic Area. In order to attain the objectives
thus set out, the association4 shall furthermore entail (Article 1(2)), in
accordance with the provisions of the Agreement:
(a) the free movement of goods;
(b) the free movement of persons;
(c) the free movement of services;
(d) the free movement of capital;
(e) the setting up of a system ensuring that competition is not distorted
and that the rules thereon are equally respected; as well as
(f) closer co-operation in other fields, such as research and development, the environment, education and social policy.
Article 2 contains certain definitions. According to one of these, the
term "Contracting Parties" (since this Agreement is a "mixed" Agreement, with both the Member States of the Community and the Commu4. The Agreement is concluded on the EC side as an association agreement under
Art. 238 EEC.

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nity itself as Contracting Parties) may with regard to the EC side have
different meanings depending upon the respective competences of the
Community and the EC Member States under Community law.5 It can
thus, depending upon the status of EC law, either mean the Community
and the EC Member States, or the Community, or the EC Member
States.
The Contracting Parties have also undertaken a corresponding obligation to that under Article 5 of the EEC Treaty, an Article which has
been the subject of numerous judgments of the EC Court of Justice.
Thus under Article 3 the Contracting Parties are obliged to take all appropriate measures, whether general or particular, to ensure fulfilment
of the obligations arising out of the Agreement. They shall abstain from
any measure which could jeopardize the attainment of the objectives of
the Agreement. Moreover, they shall facilitate co-operation within the
framework of the Agreement.
A general prohibition regarding discrimination on grounds of nationality corresponding to Article 7 of the EEC Treaty is contained in Article 4.
Article 5 lays down the important principle that any Contracting
Party at any time may raise a matter of concern at the level of the EEA
Joint Committee or the EEA Council. This principle, which during the
negotiations has been referred to as "droit dyevocation" is also expressed in Articles 92(2), as to the EEA Joint Committee, and 89(2), as
to the EEA Council.
One of the most difficult and delicate issues to negotiate concerned
the question of how to ensure that provisions of the EEA Agreement,
which in their substance are identical to provisions of EC law, are also
given such an interpretation. With regard to the interpretation of such
provisions on the date of signature of the Agreement it was natural for
the Contracting Parties to agree that the interpretation should be in conformity with that given until then by the EC Court of Justice. The particular difficulties refer, however, to the interest, on the one hand, to
keep future interpretations of corresponding EC and EEA rules as uniform as possible, while at the same time preserving the autonomy of the
5. A corresponding definition is also contained in the Fourth LomC Convention.

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EFTA States and their judicial systems. The solution chosen and laid
down in Article 6 of the EEA Agreement is inspired by corresponding
solutions in the 1988 Lugano Convention on jurisdiction, recognition
and enforcement of judgments in civil and commercial matters. The
problems in connection with that Convention were similar in relation to
the corresponding 1968 Brussels Convention, and the solutions then
worked out are contained in Protocol 2 to the Lugano Convention.
As can be seen from Article 6 of the EEA Agreement, the Contracting
Parties have, first of all, declared that on the date of signature of the
Agreement all provisions of the AgreementY6in so far as they are identical in substance to corresponding EC rules shall in their implementation and application be interpreted in conformity with the relevant rulings of the EC Court of Justice. With regard to developments in the
future, the provision makes a reservation in the sense that what is said
should be without prejudice to future developments of case law. This
is an expression of the need to avoid "freezing" in the interpretation at
the state as of the date of signature. In order, nevertheless, to emphasize
the objective of the Contracting Parties, also for the future, to maintain
homogeneity, Article 6 is supported by further language in the Agreement. In particular, mention should here be made of the second but last
recital of the Preamble, which was mentioned above, and of Section 1
of Chapter 3 of Part VII which will be commented upon later.'
Another provision with a similar objective is Article 7 which is similar
to Article 189 of the EEC Treaty. Thus acts referred to or contained in
6 . It follows from Art. 2 that the term "Agreement" means the main Agreement,
its Protocols and Annexes as well as the acts referred to therein.
7. In this context particular mention should also be made of Art. 3 of the abovementioned Agreement between the EFTA States on the establishment of a Surveillance
Authority and a Court of Justice. While Art. 3(1) of that Agreement is identical to Art.
6 of the EEA Agreement, Art. 3(2) reads: "In the interpretation and application of the
EEA Agreement and this Agreement, the EFTA Surveillance Authority and the EFTA
Court shall pay due account to the principles laid down by the relevant rulings by the
Court of Justice of the European Communities given after the date of signature of the
EEA Agreement and which concern the interpretation of that Agreement or of such
rules of the Treaty establishing the European Economic Community and the Treaty establishing the European Coal and Steel Community in so far as they are identical in substance to the provisions of the EEA Agreement or to the provisions of Protocols 1 to
4 and the provisions of the acts corresponding to those listed in Annexes I and I1 to the
present Agreement".

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the Annexes to the EEA Agreement or in decisions of the EEA Joint

Committee shall be binding upon the Contracting Parties and be, or be
made, part of their internal legal order as follows:
"(a) an act corresponding to a EEC Regulation shall as such be
made part of the internal legal order of the Contracting
Parties;
(b) an act corresponding to an EEC Directive shall leave to the
authorities of the Contracting Parties the choice of form and
method of implementation."
Such a provision was necessary not only in order to secure the correct
implementation of these rules in the Contracting Parties but also in order to avoid, inter alia, that, due to the public international law character
of the Agreement, especially in monist Contracting Parties, acts corresponding to EEC Directives would become more binding under EEA
law than under EC law in the EC Member States.

2.4 The institutional issues

Part VII Institutional Provisions (Articles 89- 114) is divided into four
chapters, Chapter 1 the Structure of the Association, Chapter 2 the
Decision-making procedure, Chapter 3 Homogeneity, Surveillance procedure and Settlement of disputes and Chapter 4 Safeguard measures.
2.4.1 Chapter 1, The Structure of the Association
This chapter (Articles 89-96), dealing with the structure of the Association is, in its turn, divided into four sections each dealing with one of
the joint organs created by the Agreement, EEA Council, the EEA
Joint Committee, the EEA Joint Parliamentary Committee and the cooperation between economic and social partners, which, inter alia, will
be carried out through the EEA Consultative Committee. In reading
this Part of the Agreement it should be kept in mind that the Agreement
does not foresee any transfer of legislative competence from any Contracting Party to any organ of the EEA.
As can be seen from a comparison between the provisions on the EEA
Joint Committee and those on the EEA Council, the Agreement fore-

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sees that the daily operation of the EEA shall be in the hands of the EEA
Joint Committee. It will be the EEA Joint Committee that adopts the
decisions regarding amendments of the provisions of the Agreement
contained in the Annexes and most of the Protocols. It will also be the
Joint Committee that will be in charge of the management of the Agreement. The Joint Committee will also have an important function with
regard to the settlement of disputes under the Agreement. The role of
the EEA Council will more be a political one, to give the political impetus and to take the political decisions regarding the further development
of the EEA. It may be noted also that, on the Community side, the
presidency in the EEA Council will be held by a member of the EC
Council, while in the EEA Joint Committee it will be the Commission
that will hold the presidency on the EC side.
The tasks of the EEA Council as defined in Article 89, shall, in particular, be to give the political impetus in the implementation of the Agreement and lay down the general guidelines for the EEA Joint Committee.
To this end, the EEA Council shall assess the overall functioning and
development of the Agreement and take the political decisions leading
to amendments of the Agreement. Furthermore, the Contracting Parties may raise, in the EEA Council, any issue giving rise to a difficulty
("droit d'kvocation"). While this normally should first be discussed in
the EEA Joint Committee it may, in exceptionally urgent cases, be
raised directly without such a discussion.
The EEA Council shall consist of the members of the Council of the
European Communities, members of the EC Commission and of one
member of the Government of each of the EFTA States. Decisions by
the EEA Council shall further be taken by agreement between the Community, on the one hand, and the EFTA States, on the other. The office
of President of the EEA Council shall be held alternately, for a period
of six months, by a member of the Council of the European Communities and a member of the Government of an EFTA State. The EEA
Council shall meet at least twice a year.
Article 92 establishes the EEA Joint Committee, which shall ensure
the effective implementation and operation of the Agreement. It shall
to this end carry out exchanges of views and information and take decisions in the cases provided for in the Agreement. A reference to the socalled "droit d'kvocation" implies that the Contracting Parties shall

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hold consultations in the Joint Committee on any point of relevance to

the Agreement giving rise to a difficulty raised by one of them. The
EEA Joint Committee shall consist of representatives of the Contracting Parties. Decisions are taken by agreement between the Community,
on the one hand, and the EFTA States speaking with one voice, on the
other.
The Office of President of the EEA Joint Committee shall be held alternately, for a period of six months, by a representative of the EC
Commission representing the Community and a representative of one
of the EFTA States. Meetings are to be held at least once a month. The
EEA Joint Committee may also establish sub-committees or working
groups to assist it in carrying out its tasks, and it shall further issue annually a report on the functioning and development of the Agreement.
According to Article 95 the EEA Joint Parliamentary Committee
shall be composed of equal numbers of, on the one hand, members of
the European Parliament and, on the other, members of parliaments of
the EFTA States. The total number of members of the Committee is
laid down in the Statute in Protocol 36 and will be 66, or 33 from either
side.8 The tasks of this Committee shall be to contribute, through dialogue and debate, to a better understanding between the Community
and the EFTA States in the fields covered by the Agreement. The Committee may express its views in the form of reports or resolutions as appropriate. It shall, in particular, examine the annual report of the Joint
Committee on the functioning and the development of the Agreement.
The President of the EEA Council may appear before the EEA Joint
Parliamentary Committee in order to be heard by it.
Article 96 emphasizes the importances of co-operation between the
economic and social partners and that this takes place in an organized
and regular manner between members of the Economic and Social
Committee and other bodies representing the social partners in the
Community and the corresponding bodies in the EFTA States in order
8. In an Agreement signed in Reykjavik on 20 May 1992 the EFTA States agreed to
establish a Committee of Members of Parliaments of the EFTA States. This Committee, the members of which will be the representatives of the Parliaments of the EFTA
States in the EEA Joint Parliamentary Committee, will, apart from addressing EEA
matters, also take over the tasks with regard to relations between the EFTA States and
the Community which so far have been carried out by an EFTA Parliamentary Committee of Members of Parliament of the EFTA countries established in 1977.

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to enhance the awareness of the economic and social aspects of the

growing interdependence of the economies of the Contracting Parties
and of their interests within the context of the EEA. A special EEA
Consultative Committee is to this end established. The Committee shall
be composed of equal numbers of, on the one hand, members of the
Economic and Social Committee of the Community and, on the other,
members of the EFTA Consultative Commitee.
2.4.2 Chapter 11, The Decision-making Procedure
This Chapter deals, in Articles 97-104, with the decision-making
procedure, in particular with regard to decisions regarding the future
development of the Agreement in parallel to developments in the EEC.
In order to fulfil the requirement of a homogeneous EEA also in the
future, it will be necessary for the Contracting Parties, in areas covered
by the Agreement, to be able to achieve a joint, parallel development
of the legal orders of the Community and the EEA. Obviously these
questions have not been particularly easy to regulate in the Agreement,
since at the same time it has been necessary to take into account the requirement of the Community that its decision-making autonomy concerning the development of internal Community law must not be
jeopardized, as well as the requirement of the EFTA States to participate in the decision-making process regarding EEA-relevant new EC
rules. A few essential points in the decision-making procedure of the
EEA may here be emphasized. Article 97 expresses the right for each
Contracting Party to amend its internal legislation in the areas covered
by the Agreement. This can be done subject to either of two conditions,
that the EEA Joint Committee concludes that the legislation as amended does not affect the good functioning of the Agreement, or if the
procedures for the decision-making under the Agreement have been
completed.
Article 98 contains an enumeration of those parts of the Agreement
that are subject to the particular decision-making procedure under this
Chapter. These parts are all the 22 Annexes as well as 31 out of the 49
Protocols. The other 18 Protocols as well as the provisions of the main
Agreement can only be amended through the convening of a conference
of the Contracting Parties.

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With regard to the decision-making procedure itself, Article 99 provides that as soon as new legislation is being drawn up by the EC Commission in a field which is governed by the EEA Agreement, the Commission shall informally seek advice from experts from the EFTA States
in the same way as it seeks advice from experts of the EC Member States
for the elaboration of each proposal (Article 99(1)). When transmitting
its proposal to the EC Council the Commission shall further transmit
copies thereof to the EFTA States. A preliminary exchange of views will
take place at the request of any of the Contracting Parties in the EEA
Joint Committee (99(2)). All along the very extensive decision-making
procedure in the Community there will then, in parallel within the EEA,
be an intensive information and consultation process between the EC
and the EFTA States in the EEA Joint Committee (Article 99(3)). It
will, however, through the "droit dYCvocation",be possible to raise a
problem to the Ministerial level in the EEA Council. The Contracting
Parties are further under a general obligation to co-operate in good
faith during the information and consultation phase with a view to
facilitating, at the end of the process, the decision-taking in the EEA
Joint Committee (Article 99(4)).
The question regarding the participation of experts from the EFTA
States in EC committees set up to assist the EC Commission, was intensively discussed during the negotiations. In broad terms distinction
could be made between three categories of EC committees, (a) those
assisting the Commission in the exercise of its executive powers, (b)
those assisting the Commission in the management and development
of particular Community programmes where EFTA States contribute
financially and (c) other committees. In accordance with the provisions
laid down in Article 100, the EC Commission will with regard to
category (a) ensure experts of the EFTA States as wide a participation
as possible in the preparatory stage of draft measures to be submitted
subsequently to the committees. The Commission will hereby refer to
experts of the EFTA States on the same basis as it refers to experts of
the EC Member States. This is of the utmost importance since thereby
it will be possible for the Commission, already at an early stage, to take
into account views from the EFTA countries.
Special more far-reaching solutions for the association of EFTA ex-

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perts have then been worked out for the category (b) committees, i.e.
those established for the different EC programme activities in which the
EFTA countries will participate financially (Article 81).
With regard to committees under category (c), i.e. other committees
established to assist the Commission, the association of EFTA States'
experts will be guided by the need that might exist in the interest of the
good functioning of the Agreement (Article 101). Protocol 37 contains
already a list of eight such committees. It is envisaged that decisions
concerning such association with further committees will be taken by
the EEA Joint Committee as soon as it starts work.
Article 102 addresses the particular problem that arises from, on the
one hand, the principle of decision-making autonomy of the Contracting Parties and, on the other, the political desire and need to maintain
the homogeneity of the EEA Agreement. It concerns, in other words,
the particular procedures needed for the adoption of amendments to the
Annexes to the Agreement. As explained above, the Annexes contain all
the integrated secondary Community legislation and whenever one of
these legal acts in the Community, normally EEC Regulations or Directives, will be amended, corresponding amendments should also be made
to the Annexes of the EEA Agreement.
Certain general principles regarding the adoption and the entry into
force of such amendments are laid down in Article 102(1). It is thus emphasized that, in order to quarantee the legal security and the homogeneity of the EEA, the EEA Joint Committee shall take a decision concerning amendments of the Annexes to the Agreement as closely as
possible to the adoption by the Community of the corresponding new
Community legislation with a view to permitting a simultaneous application of the latter and of the amendments of the Annexes to the Agreement. From the homogeneity point of view this principle is evidently
very important. There should in other words be no delays in relation to
the entry into force of an amendment of an Annex to the EEA Agreement and the entry into force of the corresponding Community rule. To
this end the Community is under an obligation to inform, as soon as
possible, the other Contracting Parties in the Joint Committee
whenever it adopts an EEA-relevant legislative act.
The Contracting Parties are obliged to make all efforts to arrive at

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an agreement on matters relevant to the EEA Agreement and special

emphasis is added, in particular, to finding a mutually acceptable solution where a serious problem arises in an area which, in the EFTA
States, falls within the competence of the legislator. The Joint Committee shall, if nevertheless an agreement on an amendment of an Annex
cannot be reached, examine all further possibilities to maintain the
good functioning of the Agreement and may also take any decision
necessary to this effect. Among such decisions is specially mentioned
the possibility to take notice of the equivalence of legislation. In order
not to extend the discussions in the Joint Committee beyond a reasonable amount of time, it is further required that a decision shall be taken
at the latest at the expiry of a period of six months from the date of
referral to the EEA Joint Committee of a decision by the EC Council
or, if that date is later, on the date of entry into force of the corresponding Community legislation.
Article 102(5) deals with the consequences if, at the end of that time,
the Joint Committee has not taken a decision on an amendment of an
Annex. In that case the part of the Annex which would be directly affected by the new legislation is regarded as provisionally suspended unless the Joint Committee takes a decision to the contrary. Such a provisional suspension shall take effect six months after the end of the time
period referred to above, but in no event earlier than the date on which
the corresponding EC act is implemented in the Community. The Joint
Committee shall pursue its efforts to agree on a mutually acceptable
solution in order to terminate this suspension as soon as possible. Paragraph 6 of Article 102 deals with the practical consequences of this
suspension.
The situation where a decision of the Joint Committee can be binding
on a Contracting Party only after the fulfilment of the constitutional requirements is dealt with in Article 103. Decisions taken by the Joint
Committee shall, unless otherwise provided for therein, upon their entry into force, be binding upon the Contracting Parties which are obliged to take the necessary steps to ensure their implementation and application (Article 104).
The above-mentioned provisions regarding decision-making imply,
for the Community, that it will have to take into account views of the
EFTA States, both when preparing and developing proposals for deci-

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sions as well as when the decisions concerning new Community rules are
taken. If this is not done there might be a risk that the EFTA States will
not be able to follow the development of EC rules and give their approval to corresponding new EEA rules.
For the EFTA States this would imply that an important part of the
possibilities for initiatives concerning the future development of the
common rules will be in the hands of the Community. The EFTA States
will, however, in various ways have the possibility of injecting their
views both informally and formally and discussing new common rules
with the Community. In the end, they will be able to claim that they will
maintain their freedom not to accept the proposal to an amendment of
the existing EEA rules. In that sense the situation of an EFTA State in
the EEA differs from that of an EC Member State in the Community.
An EC Member State can in most areas be overruled by a majority of
the other Member States and thereby against its own will be bound by
a new rule. In the EEA the principle of consensus prevails. To block a
decision on a new EEA rule may, however, in practice, unless the parties cannot agree on any other solution, as described above, ultimately
have the result that a part of an Annex to the Agreement, which would
be affected by the new rules, can be provisionally suspended.
2.4.3 Chapter 111, Homogeneity, Surveillance Procedure and Settlement of Disputes
2.4.3.1 General
With regard to the need to securing a uniform interpretation of the EEA
rules themselves as well as in relation to corresponding EC rules, reference is made to the above comments to the Preamble as well as to the
general rule of interpretation contained in Article 6 of the Agreement.
The question of uniform interpretation is, however, also intimately
linked to the question of how to arrange for dispute settlement between
the Contracting Parties. As to both of these questions it was already
clear during the exploratory talks preceding the negotiations that in order to secure legal homogeneity within the EEA some kind of a special
mechanism must be established.

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The EFTA side thus suggested already at the beginning of the discussions that an independent EEA Court should be established to function
in conjunction with the EC Court of Justice. A solution to that end was
worked out and adopted at the Joint Ministerial Meeting in May 1991.
It implied the creation of an independent EEA Court as well as a Court
of First Instance, both functionally integrated with the EC Court of
Justice. However, in an opinion delivered by the EC Court of Justice
on 14 December 1991,9 the Court declared that solution not to be compatible with the EEC Treaty. During the following two months a new
system for settlement of disputes was worked out and finally adopted
by the negotiators on 14 February 1992. In a second opinion delivered
by the EC Court of Justice on 10 April 1992,1 the Court declared the
new solution compatible with the EEC Treaty.
The finally-agreed system emphasizes in particular the questions of
preserving the homogeneity of the Agreement and the settlement of disputes between the Contracting Parties. The section regarding the surveillance procedure under the Agreement underwent, apart from
changes regarding the judicial mechanism, no amendment. As to the
question of guaranteeing and preserving homogeneity in the EEA, the
idea of having a joint EEA Court and Court of First Instance had to
be abolished. Instead, the EFTA States will establish for their part an
EFTA Court. In order to ensure uniform interpretation a number of
different elements have already been mentioned above. Chapter I11 of
Part VII adds thereto important provisions, especially regarding the
role of the EEA Joint Committee. It shall keep under constant review
the development of the case law of the Court of Justice of the European
Communities and the EFTA Court, as far as provisions of the EEA
Agreement which are identical to provisions of Community legislation
are concerned. The EEA Joint Committee may, in this context, take the
necessary action to preserve the homogeneous interpretation. If a
difference in the case law of the two Courts has been brought before the
Joint Committee and the Joint Committee has not succeeded within two
months to preserve the homogeneous interpretation, the dispute settle9. See note 3 supra.
10. Opinion 1/92 O.J. 1992, C 136/1. Annotated by Schermers, supra note 3.

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ment procedures of Article 111 may be applied. These procedures,

which will be commented upon later, contain, inter alia, the possibility
of agreeing to request the EC Court of Justice to give a ruling on the
interpretation.
The surveillance procedure in the EEA follows the well-known twopillar model, where, on the one hand, the EC Commission monitors the
correct implementation, application and interpretation of EEA rules by
the EC Member States, and a newly created independent organization
on the EEA side, the EFTA Surveillance Authority (ESA) takes on the
corresponding tasks with regard to the EFTA States. Corresponding to
the judicial control exercised in the EC by the EC Court of Justice, the
EFTA Court will have such competences as to the surveillance procedures on the EFTA side.
With regard to dispute settlement in general between the Contracting
Parties, the EEA Joint Committee is competent to settle disputes and
shall, in doing so, examine all possibilities to maintain the good functioning of the Agreement. If, however, a dispute concerns the scope or
duration of a safeguard measure or the proportionality of a rebalancing
measure, and the Joint Committee has not been able to settle the dispute, it may be referred to binding arbitration in accordance with procedures especially laid down in Article 11l(4) of the Agreement.
2.4.3.2 Homogeneity
This section (Articles 105- 107) contains first, in Article 105, provisions
regarding the obligation for the Joint Committee to act with a view to
achieving the objective of the Contracting Parties to arrive at as uniform an interpretation as possible of the provisions of the Agreement
and those provisions of Community legislation which are substantially
reproduced therein. The EEA Joint Committee shall keep under constant review the development of the case law of the Court of Justice of
the European Communities and the EFTA Court. Judgments of these
Courts shall, therefore, be transmitted to the Joint Committee, which
shall act so as to preserve the homogeneous interpretation of the Agreement. If the EEA Joint Committee within two months after a difference
in the case law of the two Courts has been brought before it, has not
succeeded in preserving the homogeneous interpretation of the Agree-

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ment, the procedures laid down in Article 111 (settlement of disputes)

may be applied. These provisions shall above all be seen as an expression of the objective of the Contracting Parties to see to it that the
homogeneity of the EEA is really achieved and preserved. The question
may be raised as to what action the Joint Committee could undertake
if a difference in case law were to occur between that of the EC Court
of Justice and that of the EFTA Court. Evidently the Joint Committee
cannot change a ruling of either of the Courts. It is further underlined
in Protocol 48 that decisions by the Joint Committee under this Article
as well as under Article 111 may not affect the case law of the EC Court
of Justice. Such a decision could, however, amount to an amendment
of an EEA rule or an approval of an interpretation given by the EC
Court of Justice.
Article 106 contains arrangements for the exchange of information
concerning judgments by the EFTA Court, the EC Court of Justice and
the EC Court of First Instance as well as the Courts of last instance of
the EFTA States. This provision, which is inspired by a similar solution
in the Lugano Convention of 1988 on recognition and enforcement of
judgments in civil cases, provides for the exchange of relevant judgments through the Registrar of the EC Court of Justice, who will also
be responsible for the classification thereof as well as the drawing up
and publication of translations and abstracts.
Possibilities for an EFTA State to allow a court or tribunal to ask the
EC Court of Justice to decide on the interpretation of an EEA Rule are
opened through Article 107 and Protocol 34. Any EFTA State is free
to decide whether or not to avail itself of this Protocol and also, if it
would do so, to what extent it would allow its courts to seek such a decision. Clearly such a system with binding interpretations causes constitutional and/or political difficulties for the EFTA States and it remains
to be seen to what extent it will be utilized."
In order further to strengthen the legal homogeneity within the EEA,
the Community has also undertaken to open intervention possibilities
11. Moreover, under Art. 34 of the above-mentioned Agreement between the EFTA
States on the Establishment of a Surveillance Authority and a Court of Justice, the
EFTA Court shall have jurisdiction to give advisory opinions on the interpretation of
the EEA Agreement upon request from a national court or tribunal in an EFTA State.

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for the EFTA States and the ESA before the EC Court of Justice. The
ESA-EFTA Court Agreement contains provisions granting the EC
Commission and the Community corresponding rights to intervene in
cases before the EFTA Court.
2.4.3.3 Surveillance Procedure
The general rules regarding the surveillance procedure under the EEA
are laid down in Articles 108- 110. Article 108 states the obligations for
the EFTA States to establish an independent surveillance authority (the
EFTA Surveillance Authority, hereinafter referred to as ESA) and a
Court of Justice (EFTA Court). With regard to the surveillance authority it is further laid down that the EFTA States shall establish procedures
similar to those existing in the Community, including procedures for
ensuring the fulfilment of obligations under the Agreement and for
control of the legality of acts of the ESA regarding competition. From
this, it follows that the ESA, with regard to its surveillance activities,
will have competences corresponding to those of the EC Commission.
Further details regarding this are laid down in various other parts of the
EEA Agreement, e.g. in Protocols 21 and 26, which, inter alia, deal
with the powers and functions of ESA in the fields of competition and
State aid.
As to the EFTA Court, it is also stated that it shall, in accordance
with a separate agreement between the EFTA States, with regard to the
application of this agreement be competent, in particular, for: (a) actions concerning the surveillance procedure regarding the EFTA States;
(b) appeals concerning decisions taken by the EFTA Surveillance
Authority in the field of competition; and (c) settlement of disputes between two or more EFTA States.
As mentioned above, the EFTA States, on 2 May 1992 in Oporto,
also signed the ESA-EFTA Court Agreement, which lays down in detail
the rules regarding the functions and competences of the ESA and the
EFTA Court. That Agreement contains, as to surveillance, particular
provisions regarding the general surveillance of the implementation, application and interpretation of the EEA rules by the EFTA States as well
as the special surveillance functions to be carried out in the fields of
competition, state aid and public procurement. All these provisions aim
at ensuring that, for the surveillance procedure, the ESA and the EFTA

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Court really are equipped with corresponding competences and powers

to those of the EC Commission and the EC Court of Justice and the
Court of First Instance.
While thus Article 108 obliges the EFTA States to establish two new
institutions, which, with regard to the surveillance procedure, should
have corresponding competences to those of the EC Commission and
EC Court of Justice, Article 109 lays down the rules on how the fulfilment of the obligations of all Contracting Parties under the EEA Agreement shall be monitored and how the EFTA Surveillance Authority and
the EC Commission shall co-operate.
It is thus initially provided that the fulfilment of the obligations under
the Agreement shall be monitored by, on the one hand, the EFTA Surveillance Authority and, on the other, the EC Commission acting in
conformity with the Treaty establishing the European Economic Community, the Treaty establishing the European Coal and Steel Community and the EEA Agreement. In order to ensure a uniform surveillance
throughout the EEA, the EFTA Surveillance Authority and the EC
Commission shall co-operate, exchange information and consult each
other on surveillance policy issues and individual cases. This general obligation for the EFTA Surveillance Authority and the EC Commission
to co-operate is followed up in other places of the Agreement by more
detailed rules in particular with regard to the fields of competition and
state aid, where Protocols 23, 24 and 27 deal specifically with this
subject.
The Commission and the EFTA Surveillance Authority shall further
receive any complaints concerning the application of the Agreement
and inform each other of complaints received. Each of these bodies
shall examine all complaints falling within its competences and shall
pass to the other body any complaints which fall within the competence
of that body. In case of disagreement between the two bodies with
regard to the action to be taken in relation to a complaint or with regard
to the result of the examination either of them may refer the matter to
the EEA Joint Committee which shall deal with it in accordance with
the dispute settlement procedure of Article 111.
Article 110 contains rules regarding the enforcement of decisions under this Agreement by the EFTA Surveillance Authority or the Com-

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mission which impose a pecuniary obligation on persons other than

States. The provision which also applies to such judgments under the
Agreement by the EC Court of Justice, the Court of First Instance of
the EC and the EFTA Court, is modelled upon Article 192 of the EEC
Treaty.
2.4.3.4 Settlement of disputes
This section, consisting of Article 111, lays down the rules regarding settlement of disputes. The Article belongs to those which obviously had
to undergo a substantial redrafting when, after the first opinion of the
EC Court of Justice, it became clear that the idea of a joint EEA Court
and Court of First Instance had to be abolished. As explained above,
the responsibility for settling disputes between the Contracting Parties
now rests with the EEA Joint Committee. It should, however, be
recalled that disputes between the Community and its Member States
are settled internally under Community law and that the EFTA Court
has been given the competence to settle disputes between two or more
EFTA States. Evidently the good functioning of the co-operation between the two surveillance authorities will be of vital importance for
avoiding disputes having to be brought to the EEA Joint Committee.
According to Article 11l(1) the Community or an EFTA State may
bring a matter under dispute which concerns the interpretation or application of the Agreement before the Joint Committee. In the second
paragraph it is further stated that the EEA Joint Committee may settle
the dispute and that it shall be provided with all information which
might be of use in making possible an in depth examination of the situation, with a view to finding an acceptable solution. To this end the EEA
Joint Committee shall examine all possibilities to maintain the good
functioning of the Agreement. It should here be recalled that the Joint
Committee can only act with decisions taken by consensus between, on
the one hand, the EC and its Member States and, on the other, the
EFTA States. This demonstrates that dispute settlement in the EEA
Joint Committee will basically be of a political nature, although such
a "political solution" may very well be based upon arguments concerning the correct interpretation of a particular provision of the Agreement.

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Two kinds of disputes can, however, under Article 111 be subject to

particular procedures, if the EEA Joint Committee does not manage to
agree on the settlement of the dispute. The first kind would be a dispute
concerning the interpretation of so-called mirroring legislation (i.e. provisions of the Agreement which in substance are identical to corresponding EC rules (Article 11l(3))). In such a case the Contracting
Parties to the dispute have the possibility of agreeing to request the EC
Court of Justice to give a ruling on the interpretation of the relevant
rules. If, however, within six months from the date on which the procedure has been initiated they have not asked for such a ruling and there
is no agreement on a solution, a Contracting Party may, in order to
remedy possible imbalances, either take a safeguard measure in accordance with Article 112(2) or apply Article 102 mutatis mutandis. While
the ruling by the EC Court of Justice would be binding as to its legal
interpretation, it would leave the Contracting Parties free to decide
upon the political conclusions to be drawn thereof.
The other case where a special procedure is foreseen (Article 11l(4))
concerns disputes regarding the scope or duration of safeguard measures taken in accordance with Article 111(3) or Article 112 or the
proportionality of rebalancing measures taken in accordance with Article 114. If, in such a case, the Joint Committee after three months has
not succeeded in resolving the dispute, any Contracting Party may refer
the dispute to binding arbitration under procedures laid down in Protocol 33. The arbitration tribunal may not deal with any question of interpretation of provisions of "mirroring" legislation.
2.4.4 Chapter IV, Safeguard Measures
On the EFTA side individual countries had originally envisaged making
particular exceptions in the Agreement from certain rules contained in
the acquis communautaire. At the beginning of the formal negotiations, the Community, however, made it clear that it could not accept
any such permanent derogations; a solution was worked out implying,
on the one hand, taking over the acquis communautaire fully in the relevant areas, and, on the other hand, protecting individual EFTA States'
vital interests through a combination of transitional periods and a
general safeguard clause. The criteria for this clause were agreed upon

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at the Joint Ministerial Meeting in May 1991 and laid down in Article
112. The clause may thus be triggered by one of the Contracting Parties
"if serious economic, societal or environmental difficulties of a sectoral
or regional nature liable to persist are arising". Safeguard measures
shall be restricted in their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such
measures that will least disturb the functioning of this Agreement. The
safeguard measures shall apply with regard to all Contracting Parties.
The use of the safeguard clause is, however, connected to a possibility
for the other Contracting Parties to take proportionate rebalancing
measures if, through the recourse to the safeguard clause, an imbalance
were to arise (Article 114).

2.5 General and Final Provisions

Part IX, General and Final Provisions, contains twelve Articles (Articles 118- 129) of which only a few will be commented upon here.
In addition to the particular procedures regarding decision-making
already mentioned, Article 118 contains an "evolutionary c1ause"making it possible to develop the relations under the Agreement by extending them to fields not covered thereby. This clause, which is similar to
such clauses contained in most of the Free Trade Agreements (FTAs)
of 1972- 1973 between the EFTA countries and the Communities, foresees for such cases a political decision by the EEA Council to open
negotiations between the Contracting Parties.
One of the issues that preoccupied the negotiators during the negotiations is the relationship between the EEA Agreement and the several
hundred Agreements of various kinds and in various fields that prior to
the EEA Agreement had been concluded between all or some of the
Contracting Parties. To the more prominent of such Agreements no
doubt belong the FTAs between the Communities and the EFTA countries. The main rule in Article 120 states, in line with general principles
of public international law, that, unless otherwise provided in the
Agreement, the application of the provisions of the EEA Agreement
shall prevail over provisions in existing bilateral or multilateral agree-

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ments binding the EC, on the one hand, and one or more EFTA States
on the other, "to the extent that the same subject matter is governed by
this Agreement". In practice this will mean that existing Agreements
falling under this Article are neither terminated nor suspended, they are
simply not to be applied. In practice this would mean that, with some
exceptions, the EEA Agreement will be applied instead of the FTAs.
The EEA Agreement does not preclude co-operation in the framework of the Nordic co-operation, of the regional union between Switzerland and Liechtenstein or of the co-operation between Austria and
Italy concerning certain neighbouring regions, to the extent that such
co-operation does not impair the good functioning of the Agreement
(Article 121).
A Contracting Party may withdraw from the Agreement provided it
gives at least twelve months notice (Article 127). The other Contracting
Parties shall then convene a diplomatic conference in order to make the
necessary modifications to the Agreement.
On certain conditions, it will also be possible for other States to become a party to this Agreement. Thus a European State that becomes
a member of the Community shall apply to become a party to the Agreement, while a European State that becomes a member of EFTA may
make such an application.
Finally, according to Article 129 the Agreement shall enter into force
on 1 January 1993, provided that all Contracting Parties have deposited
their instruments of ratification or approval before that date. If these
requirements are not met in time, the Agreement will enter into force
on the first day of the second month following the last notification.
The final date for such a notification is 30 June 1993. If that date is
passed without a decision on the entry into force of the Agreement, the
Contracting Parties shall convene a diplomatic conference to assess the
situation. l 2
In Agreed Minutes to this Article, the Contracting Parties have
agreed that, if any one of them should not be prepared to ratify the
Agreement, the signatories shall review the situation. Furthermore,
12. The ESA-EFTA Court Agreement and the Standing Committee Agreement are
supposed to enter into force after ratification at the same time as the EEA Agreement.

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if any one of them should not ratify the Agreement, the remaining Contracting Parties shall convene a diplomatic conference to assess the effects of the non-ratification for the Agreement and to examine the possibility of adopting a protocol containing the amendments which will be
subject to necessary internal procedures. Such a conference shall be
convened as soon as it has become clear that one of the Contracting Parties will not ratify the Agreement or at the latest if the date of entry into
force of the Agreement is not respected.

3. Some concluding remarks

Three of the most important lessons to be drawn from the so-called
"Luxembourg Process", which was initiated after the first joint ECEFTA Ministerial Meeting in 1984, but which from 1989 was gradually
succeeded by the formal negotiations on the EEA Agreement, was that
the creation of a dynamic and homogeneous EEA would require: that
a strong institutional framework especially with regard to legal institutions be created, that instead of specific agreements in selected sectors
that might particularly interest the Parties, large coherent blocks of the
acquis communautaire must be taken over, and that all this could only
be achieved through a multilateral agreement between the Community
and the EFTA States as well as among the latter and no longer through
bilateral agreements.
In the EEA Agreement, the conclusions of these lessons have been
realized in a way that no one could imagine in 1984, or hardly even at
the beginning of 1989 when President Delors launched his initiative, but
which seems quite logical not least in the light of the considerable
changes which since have taken place in the Community as well as in the
rest of Europe.
The volume and scope of Community legislation and case law integrated into the Agreement and thus taken over by the EFTA States is
without precedent. Given the present level of integration in the Community, with the almost completed internal market, it would even seem
that hardly any of its present Member States have had to take such a
large step of integration in one go as is represented by the EEA Agree-

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ment. From this point of view it would also seem that it would hardly
be possible to get any closer to the status of membership in the Community, without becoming a member, than through the present Agreement.
The developments since the beginning of preparations for the negotiations on the EEA Agreement were initiated three years ago have also
been such that four EFTA States, Austria, Sweden, Finland and Switzerland, have presented formal applications for EC membership. At the
meeting of the European Council in Lisbon, at the end of June 1992,
the EC Heads of State and Governments discussed the future enlargement of the Community and decided to initiate formal negotiations
with the EFTA States having applied for membership as soon as the
Maastricht Treaty should be ratified and the future EC budget order
decided upon. It should, however, not be forgotten that no matter when
the next enlargement can take place and which of the EFTA States take
part therein, the EEA Agreement has certainly provided an extremely
good and useful preparation for such a step. At the same time it secures
all EFTA States a participation in the internal market based on equal
treatment and non-discrimination. For those EFTA States which might
not want to take the step towards accession to the EC, the Agreement
could also provide a solution in the longer term.