23 7 90 Official]ournal of the European communities ^oC1^33 
Opinion on EC^EETArelations 
(90BC1^2B12) 
OnlEebruaryl990, the Economic and Social Committee, acting under the fourth paragraph of 
Article 20 ofits Rules ofProcedure, decided to issue an opinion and report on E^EETArelations, 
The Section for External Relations,Trade and Development Pohcy,which was responsible for 
preparing the Committee^sworl^ on the subject, adopted its Opinion and Report onl^ May 1990. 
The rapporteur was MrVascoCal 
At its 277thplenary session (meetingof 30May 1990), theEconomic and SocialCommittee 
adopted byama^onty in favour with^abstentions the following Opinion 
n Recent developments in EC^BEETA relations 
1.1. Until the beginning of 19^, ECeEETA relations 
wereconfmed to agreements on tarifP and quotaDfree trade 
in industrial products. 
In April 19^, EC and EETAMimsters adopted the ^oint 
Luxembourg Declaration expressing satisfaction at the 
results achieved andundertal^ingto ^strengthencooper 
ation, with the aim of creating a dynamic European 
economic space of benefit to their countries. 
EC EETAcooperation was put onapragmatic footing by 
2^ working groups of Commission appointees and EETA 
experts. Thegroups achieved positive results on such issues 
as rules of origin, elimination of export restrictions, and 
EETAparticipation in specific EC research and develop 
ment programmes. 
1.2. Despite the progress made, EC^EETAcooperation 
was becoming increasingly removed from the new 
dynamism created bythe Community in its programme for 
1992, altering its ^o^ o^r^^ and its approach to 
integration. 
lndeed,while the Community^smternal decisionmaking 
procedures had changed, relations with EETAwere still 
based on the Luxembourg Declaration and onlycovered 
industrial goods^whoseshareofinternationaltradewas on 
the decline). 
1.3. The need for more structured and comprehensive 
relations with the EETAnations was identified by President Delors when he addressed the European Parliament in 
]anuaryl9^9.TheEETAldeadsofC^overnmentresponded 
positively in the Oslo declaration of l^i March 19^9, and 
undertook to open negotiations ^with the aim of creatinga 
dynamic and homogeneous European Economic Spaced 
The Ideads of government confirmed their willingness to 
discuss all aspects relating to the free movement of goods, 
services, capital and persons, and to extend cooperation in 
the fields of research, education, and the environment, 
^iderconsultationsoneconomicand monetary policies 
were also envisaged. 
1mA Eollowing the ^oint Ministerial meeting of 
20 March, five working groups were set up tolook into 
areas of agreementAiisagreement with regard to the free 
movementof (l)goods, (2) services andcapital and (3) 
persons^and to deal with (^) accompanying measures and 
(e^) legal and institutional aspects. 
In its final report of 20 October 19^9, the high-level 
steennggroup concluded, in the light ofthe contacts it had 
made, that there wasasufficiently clear understanding of 
the positions of both sides on the content and form ofa 
possible future agreement. 
Inacommumcation to the Council on 22 November, the 
Commission took the view that sufficient common ground 
had been identified to envisage the possibility of comD 
prehensive negotiations, and that exploratory talks should 
first clarify the matters outstandmg.Once these talks had 
been concluded satisfactorily and the council had 
approved the Commissions negotiating brief, the com 
prehensive negotiations could commence. 
No C 182/34 Official Journal of the European Communities 23. 7. 90 
1.5. The EC-EFTA joint Ministerial meeting of 19 De­
cember 1989 decided that formal negotiations should be 
launched in the first half of 1990 and should be concluded 
as rapidly as possible. 
Up to the end of March 1990 the exploratory talks did not 
seriously alter the position of either side. The Commission 
has prepared a negotiating proposal which the Council is 
due to discuss in June, so that the formal negotiations could 
still begin in the first half of 1990. 
2. The concept of a European Economic Space 
2.1. At the time of the 1984 Luxembourg Declaration, 
the Concept of a European Economic Space (EES) was 
largely confined to the conditions needed to improve the 
free movement of industrial products. 
The Luxembourg Declaration was a first attempt to extend 
the scope of cooperation to other areas where it was felt 
necessary: harmonization of technical standards and 
regulations; elimination of technical barriers; simplifi­
cation of customs formalities and rules of origin; and 
elimination of unfair trading practices, distortionary State 
aids, and discriminatory public procurement practices. 
The Declaration also favoured greater cooperation in 
research and development, and wider consultations in such 
sectors as transport, agriculture, fisheries and energy. 
Exchanges of information were also envisaged with regard 
to working conditions, social protection, culture, consumer 
protection, tourism, and intellectual property. 
2.2. The Joint Declaration of December 1989 takes a 
wider view of the EES by seeking to give relations 'a new 
dimension as part of a common European outlook'. 
Ministers agreed to 'seek jointly to define a more structured 
framework for cooperation between the EC and all of 
the EFTA countries together'. The following objectives 
were set: 
'— to achieve the free movement of goods, services, 
capital and persons, on the basis of the relevant 
acquis communautaire, to be identified jointly; 
exceptions, justified by considerations of funda­mental interests, as well as transitional arrange­
ments, could be matters for negotiation; equal 
conditions of competition should be ensured, 
— to strengthen and to broaden cooperation in the 
context of the Community's actions in other areas 
such as research and development, the environ­
ment, education, working conditions and social 
welfare, consumer protection, programmes for 
small and medium-sized enterprises and tourism, 
— to reduce economic and social disparities between 
their regions.' 
2.3. The concept of a European Economic Space (EES) 
has thus evolved to take into account the effects of the EC 
internal market on EFTA. 
However, it would be wrong to see the EES as the extension 
of the EC to EFTA. On the contrary: at the present stage in 
the process, the success of the EES negotiations is 
important if the Community is to achieve its own 
fundamental goals, as enshrined in the Single Act, and to 
secure lasting and dynamic relations with its main trading 
partner. 
Nor should the EES be seen as an extension of the internal 
market to 18 countries. The completion of the internal 
market involves a number of factors which some EFTA 
nations are either unwilling or unable to contemplate 
(customs union; common trade, agricultural, and fisheries 
policies; approximation of indirect taxation; free move­
ment of workers and other citizens; free movement of 
capital and free establishment of services). 
2.4. The EES will have to be a sui generis entity, and 
certain points have already been agreed. Firstly, the basis 
for achieving the four freedoms (See Section 6 below) 
should be the relevant 'acquis communautaire', backed by 
accompanying policies. Secondly, the importance of 
reducing regional economic and social disparities has been 
recognized, and the EFTA nations have stated their 
readiness to begin negotiations on cooperation in this area. 
Thirdly, the best instrument for the EES would be a treaty 
covering both substance and legal and institutional aspects, 
and laying down administrative and supervisory structures. 
Fourthly, common rules are needed to ensure equal 
conditions of competition throughout the EES. 
Negotiations between the two parties would work out 
arrangements for extending the bulk of the Community's 
internal market programme to the EFTA countries; these 
talks would take place in parallel with the decisions still to 
23. 7. 90 Official Journal of the European Communities No C 182/35 
be taken by the Community in its capacity as an 
autonomous decision-making entity and in line with its 
timetable. Furthermore, as confirmed by the conclusions of 
the Dublin Summit held in late April 1990, the Community 
will continue to push ahead with economic, monetary and 
political integration. 
3. Establishment of the European Economic Space 
3.1. In terms of the economic integration of the Twelve, 
the main effects of the internal market are likely to be 
greater production specialization as a result of comparative 
advantages; greater efficiency resulting from economies of 
scale; and greater competitiveness following the removal of 
trade barriers. A more rapid increase in intra-Community 
trade is also expected to be a general consequence. In order 
to avoid a deterioration in regional disparities, the 
strengthening of economic and social cohesion was made 
an aim of the Single Act and the structural funds were also 
reformed. 
3.2. EFTA countries would have a great deal to lose if 
they were excluded from this process, and much to gain if 
they could participate in it. The EC is EFTA's main trading 
partner. The removal of barriers to intra-Community trade 
and the effects of economies of scale will cause processing 
industries to step up their investments in the EC, thereby 
reducing the current competitiveness of EFTA countries 
(just as they have also tended to reduce EFTA's share of 
international and intra-European trade). 
3.3. The overall gains which the Community can obtain 
from the establishment of a European Economic Space 
must also be taken into account. Despite the size of their 
individual economies, the EFTA nations as a whole 
constitute the EC's main trading partner. In addition, 
extending some of the rules of the internal market to 
18 countries would reduce the risks of distortions resulting 
from the liberalization process. In both political and 
economic terms, the establishment of a wider European 
Economic Space would strengthen Europe's competi­
tiveness and negotiating position in relation to the rest of 
the world. 
3.4. The dramatic developments still under way in 
Eastern Europe point to rapid changes, in both political and 
more especially economic and trade terms, in the EC's 
relations with these countries as a group and as individual 
sovereign States. Although (at least for the moment) this does not necessarily 
mean radically altering plans for construction of the EC-
EFTA European Economic Space, account must be taken of 
the fact that the balance and structures of European 
markets and trade haVe changed. 
3.5. The European Economic Space has not yet been 
clearly defined, and the negotiations to establish its scope 
have not yet begun. 
The ESC wishes to analyze the results of these negotiations 
in order to check that due account is taken of European 
integration interests. When making this analysis, the ESC 
will give its conclusions on the scope of the European 
Space, more particularly with regard to the achievement of 
a fair balance of benefits and obligations between the 
participants. 
In the ESC's view, under no circumstances would it be 
acceptable for certain countries to draw clear benefits from 
the EES process without the necessary political and 
economic quid pro quos. 
4. Institutional questions 
4.1. The negotiating process will aim to draw up a treaty 
covering the substance and the necessary legal and 
institutional aspects of a European Economic Space. 
The Treaty will include subjects relating to the relevant 
'acquis communautaire', a large part of which has already 
been identified. It will also lay down the procedure for 
drawing up EES legislation and putting it into effect. 
For obvious reasons of principle, and not for reasons of 
time or efficiency, the Community's decision-making 
procedure cannot involve the EFTA nations on the same 
terms as the EC Member States. However, a commitment 
could be made to provide appropriate information in good 
time and examine any response. 
4.2. EFTA countries view the decision-making process 
as the key to relations between both sides, and therefore a 
matter for priority consideration. 
Both sides accept the more general principle of a balance 
between rights and obligations. The process of framing and 
adopting the relevant new EES legislation must guarantee 
that drafts are communicated in good time and that the 
other side's positions are taken into account, without 
No C 182/36 Official Journal of the European Communities 23. 7. 90 
prejudice to either side's autonomy in decision-making or 
to subsequent ratification by the appropriate joint body. 
Bearing in mind that Community decision-making pro­
cedures are relatively slow, it should be fairly easy to ensure 
that drafts are communicated to EFTA partners in good 
time. Their views could then be taken into consideration at 
various EC levels — ESC, European Parliament, and 
directly by the Commission. A similar system should be 
guaranteed in cases where the new EES legislation comes 
from EFTA. 
Legislation would thus be formulated within a system 
providing osmosis at various levels. The form taken by this 
legislation must ensure the direct applicability and primacy 
of EES decisions. 
4.3. The EC has only been able to develop to its present 
stage of achievements, and will only be able to advance 
further in the future, because it is not a traditional 
intergovernmental international organization. The EC 
rests on an institutional organization which is constantly 
developing, and it is thus a forward-moving federation. 
The agreement envisaged with EFTA must include 
provision for a surveillance procedure linked to a legal 
mechanism. This mechanism should be based on the Court 
of Justice in Luxembourg; but judges from the EFTA 
nations would also assist the Court. 
5. The role of the social partners 
5.1. The joint meetings of the EC's Economic and Social 
Committee and the EFTA Consultative Committee which 
began in 1975 have helped to increase awareness among the 
social partners in the 18 participating countries of the 
common problems involved in creating a European 
Economic Space. 
Cooperation between the two Committees which represent 
the social partners has developed in a pragmatic way, and 
in recent years has moved on from the mere exchange of 
information to the analysis of subjects of common interest 
and the adoption of joint conclusions or recommendations. 
The two Committees have thus played an important part in 
the new, more dynamic relationship between the EC and 
EFTA, clearly reflecting the economic and social partners' 
interest in promoting the free movement of goods, services, 
capital and persons, as well as the strengthening and 
broadening of cooperation (in the fields of research and 
development, environment, education, working con­
ditions, social protection, consumer protection, program­mes to promote small and medium-sized enterprises, and 
tourism) and the reduction of economic and social 
disparities between regions. 
5.2. Despite broad consensus on objectives, the mem­
bers of the two Committees have expressed differing views 
on the negotiation process at the joint meetings. 
This is partly due to differences in the working methods, 
workloads and size of the two Committees, as well as to 
institutional differences. 
While the ESC has to be consulted by the Council of 
Ministers and by the Commission in the cases laid down in 
the Treaties, the EFTA Consultative Committee acts only 
on its own initiative, and no voting procedure is provided 
for in its Rules of Procedure. 
5.3. The brief for the forthcoming negotiations must 
include provisions for the two Committees to present the 
negotiators with their proposals on cooperation between 
EFTA and EC socio-economic groups. 
The negotiations will be extremely complex, but EFTA 
members' participation in the decision-shaping process is 
unlikely to give rise to the same problems as their possible 
participation in decision-taking. 
The ESC plays a consultative part in shaping decisions, but 
no part in decision-taking. It could envisage the possibility 
of inviting members of the Consultative Committee to be 
present during work on questions relating to the European 
Economic Space. This would enable ESC members to take 
into account the special interests of their EFTA partners, 
without slowing down the Community decision-making 
process or jeopardizing its autonomous decision-making 
role. 
The ESC hopes that the position of the Consultative 
Committee will be brought in line with that of the ESC as 
swiftly as possible (and at a preliminary stage), so that it 
can then issue Opinions on economic and social matters 
relevant to EFTA, particularly the proposed Treaty 
establishing the EES. 
For Consultative Committee members, the advantage of 
taking part in the consultation process and of keeping 
themselves fully informed of Community initiatives would 
help to create a kind of osmosis in the shaping of decisions 
affecting the future EES, thereby facilitating their sub-
23. 7. 90 Official Journal of the European Communities No C 182/37 
sequent formal approval by the body which will provide a 
platform for social partners from both EFTA and the EC. 
5.4. The EES Treaty between the Communities and 
EFTA should include provision for a consultative body 
made up of ESC and EFTA Consultative Committee 
representatives and with the right of initiative. 
6. The four freedoms 
6.1. Free movement of goods, capital, services and 
persons are four objectives already mentioned in the Treaty 
of Rome. However, as pointed out in the White Paper, 
these objectives cannot be achieved simply by deepening 
what may be termed the 'old approach', i.e. a detailed set of 
Community rules laboriously negotiated among re­
presentatives of the 12 Member States, often granting 
derogations and transition periods to the economies which 
face greater difficulties. 
The 'new approach' is based more on the mutual 
recognition of technical standards and regulations, the 
opening of markets, and the right of establishment. This in 
practice prevents Member States from resorting to the 
traditional tool of 'non-tariff barriers to intra-Community 
trade. 
This new approach has only been possible thanks to the 
action of the EC Court of Justice. Unless the Court's terms 
of reference are extended to cover the EES, the EES will not 
be a success. 
The completion of the internal market forms part of the 
wider process of national economic deregulation and 
liberalization, to be brought about partly by the transfer of 
sovereignty to Community decision-making bodies. 
6.2. These developments at Community level in the 
implementation of its wider plans have not all met with the 
approval of the EFTA negotiating partners. 
EFTA has never supported transfers of sovereignty (at least 
without a guarantee of the countervailing powers needed to 
ensure democratic control). 
EFTA countries have attained a high profile on world 
markets and on the Community market in particular. Their 
economies are open to external trade and their industrial 
sectors are well-established in the EEC. In spite of this, 
EFTA countries are still not giving Community industrial 
products and services full access to their markets; they are 
also continuing to make it difficult for EC firms to consolidate their position in EFTA countries. This matter 
must be solved as quickly as possible so as to maintain a fair 
balance between rights and obligations when the Treaty is 
being negotiated. 
6.3. It is a welcome sign that the EFTA countries have 
recognized that it is also in their interest to limit exceptions 
to a minimum, and that they have agreed on the direct 
applicability of the joint legislation, the joint legal process, 
and the proper operation of the Treaty. 
With the 'acquis communautaire' as a basis, the forthcom­
ing negotiating process will define any exceptions. These 
negotiations will not be easy, since each EFTA Member 
State has its own exceptions to propose. 
7. Flanking policies 
7.1. The package of measures for completing the 
internal market has involved a complex negotiating process 
including parallel decisions on flanking policies, economic 
and social cohesion, budgetary matters, reform of the 
Common Agricultural Policy, and amendments to the 
Community decision-taking process following the Single 
Act. 
A full guarantee of the four freedoms throughout the EES 
will call for a fair balance between rights and obligations, 
and will also mean the negotiation of a package of 
measures to take account of the regional effects of the EES. 
Economic cohesion and the social dimension should be 
central aspects of the EES Treaty. 
7.2. Discussions on flanking policies and other related 
questions have been based on the EFTA countries' desire to 
increase cooperation in the fields of environmental and 
consumer protection, education, civil protection, research 
and development, and tourism. The EFTA nations also 
wish to participate in Community programmes, and play a 
part in their drafting. 
7.3. As yet, there have been no concrete proposals for 
action to reduce economic and social disparities. 
The EFTA nations recognize that they must make a 
positive contribution towards economic and social cohe­
sion. However, the exploratory talks have not yet tackled 
No C 182/38 Official Journal of the European Communities 23. 7. 90 
this subject of crucial importance for the EC's less 
developed regions. 
On regional policy in particular, EFTA countries are in a 
position to assist the less developed regions (as the EFTA 
fund for the industrialization of Portugal set up in 1975 
continues to do). As the present ERDF cannot be altered, an 
EES Treaty could perhaps include provisions for the 
establishment of a fund aimed at reducing disparities in 
regional development, focusing on the problems of the 
regions most affected by the creation of the EES. 
7.4. EFTA's socio-economic representatives are also 
proving highly responsive to the social dimension; this has 
been clearly demonstrated in work carried out in 
preparation for the joint meeting scheduled for June 1990. forthcoming round of EC-EFTA negotiations, for which 
the Commission has already drawn up a mandate to be 
submitted to the Council of Ministers, should clarify those 
objectives which appear contradictory. 
Clearly the most important thing is for the EFTA countries 
to reach a consensus, enabling them to speak with a single 
voice, and for them to accept the relevant 'acquis 
communautaire'. 
The ESC feels that there is a danger that the European 
Economic Space could in fact delay acceptance of the 
accession applications of EFTA countries which have 
already applied for membership or plan to do so. These 
countries are fellow Europeans, and have democratic 
governments. 
With higher social and environmental protection standards 
in some areas, the EFTA nations can help ensure that the 
Treaty also gives full weight to employment policies, 
education and training programmes, social dialogue, social 
issues in general, and the free movement of workers in 
particular. The ESC is aware of the difficulties involved in setting up 
an EES. However, it calls for coordination of policies 
throughout the EES area, in order to reinforce their 
effectiveness with regard to Europe's main competitors. 
Done at Brussels, 30 May 1990. 
8. Conclusions 
The concept of the European Economic Space defined in 
the joint declaration of December 1989 is ambiguous. The The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
Opinion on the Community initiative programme to assist the most remote regions of the 
Community (REGIS) 
(90/C 182/13) 
On 4 April 1990, the Commission decided to consult the Economic and Social Committee, under 
Article 198 of the Treaty establishing the European Economic Community, on the Community 
initiative programme to assist the most remote regions of the Community (REGIS). 
The Section for Regional Development, Town and Country Planning, which was responsible for 
preparing the Committee's work on the subject, adopted its opinion on 22 May 1990. The 
rapporteur was Mr Delia Croce. 
At its 277th plenary session (meeting of 30 May 1990) the Economic and Social Committee 
unanimously adopted the following opinion: