Bridging the Widening Gap between the EU Treaties and the Agreement on the European Economic Area

• Author: Halvard Haukeland Fredriksen
• Date: 01 November 2012
• Published date: 01 November 2012
• DOI: http://doi.org/10.1111/eulj.12001

Bridging the Widening Gap between the

EU Treaties and the Agreement on the

European Economic Area

Halvard Haukeland Fredriksen*

Abstract: For almost 20 years now, the European Free Trade Association (EFTA)

States Iceland, Liechtenstein and Norway have been included in the EU’s internal

market through the Agreement on the European Economic Area (EEA). The continuing

success of the EEA is threatened, however, by an ever widening gap between EU primary

law and the still unchanged main part of the EEA Agreement. Unwilling to begin the

strenuous work of updating the Agreement, the Contracting Parties place their trust in

the ability of the courts to bridge the gap. While it is shown in this article that both the

EFTA Court and the Court of Justice of the EU are indeed willing to go far in order to

preserve homogeneity between EU law and EEA law, it is argued that there are limits to

the courts’ ability to remedy the failed updating of the Agreement.

I Introduction—The Widening Gap between the EU Treaties and the

Agreement on the European Economic Area (EEA)

Almost 20 years after its entry into force in 1994, the history of the Agreement on the

EEA1is one of unexpected success. Defying the discouraging predictions made by

leading commentators,2the Agreement has hitherto accomplished its overall aim of

including the European Free Trade Association (EFTA) States in the EU’s internal

market. In the process, it has overcome not only the refusal by what is now the Court

of Justice of the EU (CJEU) in 1991 to approve the original plan for a joint EEA

Court3but also the decision of the Swiss electorate not to participate in the EEA and

the decisions by Finland, Sweden and Austria to join the EU in 1995, just a year after

the EEA Agreement f‌inally came into force, leaving only Iceland, Liechtenstein and

Norway in the EFTA pillar of the EEA.

In its 2010 assessment of the state of relations between the EU and the EFTA

States, the Council of the EU expressed its satisfaction with the functioning of the

* Research Fellow, University of Bergen, Norway.

1OJ [1994] L 1, 3.

2See, eg H. G. Schermers’ prognosis in (1992) 29 Common Market Law Review 991, 1005. «It is unlikely

that the compromises found will lead to a system which remains workable in the long term». Similarly M.

Cremona, ‘The “dynamic and homogeneous” EEA: Byzantine structures and various geometry’ (1994) 19

European Law Review 508–526, 524: «the compromises reached are unlikely to prove satisfactory».

3Opinion 1/91 [1991] ECR I-6079.

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Agreement and even advocated an EEA-style framework agreement for the Union’s

bilateral relations with Switzerland, the only remaining EFTA State that is not part of

the EEA.4In a 2010 brief‌ing paper commissioned by the European Parliament, it is

observed that despite challenges in connection with the EU’s future relations with the

EFTA States, the EEA Agreement in general works well.5Correspondingly, in its

2012 report to the Norwegian government, the independent Norwegian EEA Review

Committee concluded that the EEA Agreement, notwithstanding its obvious demo-

cratic shortcomings, has proved to be reliable and functional and that it has fulf‌illed

its aim of securing the participation of Norwegian industry and commerce in the EU’s

internal market.6

The main reason for the success of the EEA Agreement is its highly dynamic

nature. In order to ensure homogeneity between EEA law and the constantly evolving

internal market acquis of the EU, novel EU legislation of relevance to the EEA is

continuously added to the Agreement through decisions of the EEA Joint Committee.

Since its entry into force in 1994, almost 6000 new legal acts have been incorporated

into the Agreement by amending its many annexes.7Hitherto, the EEA EFTA states

have never made use of their formal right to block this continuous updating of EEA

law. Furthermore, as noted with satisfaction by the EU Council, the EFTA countries

have a very good record of proper and regular incorporation of the new rules into

their national legal orders.8

Equally important, legislative homogeneity between EU and EEA law is comple-

mented by homogeneous interpretation by the EFTA Court and the CJEU. True, the

CJEU initially appeared to be rather sceptical towards the possibility of achieving the

goal of uniform interpretation of EEA law and the underlying EU law, pointing, inter

alia, to the divergences that exist between the aims and context of the EEA Agreement

as an international agreement, on the one hand, and the aims and context of the

Treaty establishing the European Community (EC) as the constitutional charter of a

supranational legal order, on the other.9However, through a distinctly dynamic

approach to the Agreement, the EFTA Court seems to have managed to change the

CJEU’s mind, leading to the latter’s often cited statement in its 2003 plenary judg-

ment in Ospelt that ‘(i)t is for the Court . . . to ensure that the rules of the EEA

Agreement which are identical in substance to those of the treaty are interpreted

uniformly.’10 Formally, the obligation under Article 6 EEA to interpret EEA provi-

sions in conformity with the relevant case-law of the CJEU is limited to rulings

rendered prior to the date of signature of the Agreement (2 May 1992). However, as

stated openly by the EFTA Court in L’Oreal, it has in its practice, in order to

4‘Council conclusions on EU relations with EFTA countries’, 3060th General Affairs Council meeting,

Brussels, 14 December 2010, paras 48–49.

5C. Tobler et al., ‘Internal Market beyond the EU: EEA and Switzerland’, Brief‌ing paper commisioned

by the European Parliament’s Committee on Internal Market and Consumer Protection (European

Parliament, 2010), 30.

6Report by the EEA Review Committee, Inside and Outside—Norway’s Agreements with the European

Union (Off‌icial Norwegian Reports, 2012, 2).

7Report by the EEA Review Committee, op cit n6supra, 108.

8Council conclusions on EU relations with EFTA countries, op cit n4supra, para 3.

9Opinion 1/91, n 3 supra, paras 20 et seq.

10 Case C-452/01, Ospelt and Schlössle Weisenberg Familienstiftung v Austria [2003] ECR I-9743, para 29.

See in detail H. H. Fredriksen, ‘The EFTA Court Fifteen Years On’ (2010) 59 International and

Comparative Law Quarterly 731–760.

November 2012 EU Treaties and the European Economic Area

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