In Defence of Liberty

Driven by data; ridden with liberty.

There is no European Free Trade Zone

It has been repeatedly asserted that there is a “European Free Trade Zone”, in which Britain would fall into upon leaving the European Union.

EU_EFTA_CEFTA_CISFTA.png

EU: Dark Blue; EFTA: Green; CEFTA: Light Blue; CISFTA: Orange; CEFTA & CISFTA: Pink. (Source: A. H. King)

This claim was most prominently made by Michael Gove MP (Conservative, Surrey Heath) in a speech for Vote Leave [1]. Mr Gove said:

There is a free trade zone stretching from Iceland to Turkey that all European nations have access to, regardless of whether they are in or out of the euro or EU. After we vote to leave will stay in this zone. The suggestion that Bosnia, Serbia, Albania and the Ukraine would stay part of this free trade area – and Britain would be on the outside with just Belarus – is as credible as Jean-Claude Juncker joining UKIP.

Agreeing to maintain this continental free trade zone is the simple course and emphatically in everyone’s interests.

(Video: Press Association)

There is not a single zone of European free trade: there are multiple overlapping agreements.

The European Union

The first is the European Union Single Market: the EU shares its single market with three members of the European Free Trade Association (EFTA), through an agreement called the European Economic Area. This single market covers the free movement of people, goods, services and capital [2].

The EU also has a customs union, which means states agree to tariff-free trade in goods within the customs union and impose a common external tariff on all goods from outside that customs union. All member states of the European Union are part of the EU customs union, including their non-EU territories, along with Turkey, San Marino, and Andorra [3].

EFTA and CEFTA

The EFTA now consists of four countries: Iceland, Norway, Switzerland and Liechtenstein [4].

The Central European Free Trade Agreement is a trade agreement between non-EU countries, and membership of CEFTA ends upon joining the EU [5]. The current members of this agreement are Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro, Serbia and the UN Interim Administration Mission in Kosovo, on behalf of Kosovo.

CIS FTA

The Commonwealth of Independent States Free Trade Area (CISFTA) is a free trade area between Armenia, Belarus, Kazakhstan, Krygyzstan, Russia, Ukraine, Uzbekistan and Moldova [6]. The first five of these countries are also members of the Eurasian Economic Union, and comprise a single economic market [7].

The EU has certainly made trade agreements with non-members within the European continent. That does not mean a single zone of tariff-free trade exists, in either goods or services.

References

[1] Vote Leave, 2016. Michael Gove: ‘The Facts of Life Say Leave’. Available from: http://www.voteleavetakecontrol.org/michael_gove_the_facts_of_life_say_leave [Accessed: 5th June 2016]

[2] European Commission, 2016. The European Union Single Market. Available from: http://ec.europa.eu/growth/single-market/index_en.htm [Accessed: 5th June 2016]

[3] European Commission, 2016. Customs Union. Available from: http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/customs_unions/index_en.htm [Accessed: 5th June 2016]

[4] EFTA, 2016. The EFTA States. Available from: http://www.efta.int/about-efta/the-efta-states [Accessed: 5th June 2016]

[5] CEFTA, 2016. Central European Free Trade Agreement – CEFTA 2006. Available from: http://www.cefta.int/ [Accessed: 5th June 2016]

[6] Bilaterals, 2013. CIS FTA effective for Kyrgyzstan from 12 January 2014. Available from: http://www.bilaterals.org/?cis-fta-effective-for-kyrgyzstan [Accessed: 5th June 2016]

[7] Eurasian Economic Union, 2016. About the Union: EAEU Member States. Available from: http://www.eaeunion.org/?lang=en#about-countries [Accessed: 5th June 2016]

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This entry was posted on June 20, 2016 by in European Politics and tagged , , , .
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