Free-Trade Zone From Lisbon to Helsinki Waits in the Wings

YOU might say a Swiss wrench clogged up the works.

The European Community's Single Market was supposed to be extended to the seven countries of the European Free Trade Association on Jan. 1. But since the Swiss voted "no" earlier this month to joining a 19-nation European Economic Area (EEA), the other countries of the EFTA - Austria, Finland, Iceland, Norway, Sweden, and Liechtenstein - are going to have to wait.

But even if it takes six months to settle the diplomatic uncertainties resulting from the Swiss decision, a free-trade zone from Helsinki to Lisbon is virtually certain to take effect in 1993.

And for Nic Gronvall, the new market's impact won't be academic or limited to the business world, but will be quickly felt right down to the local grocery store.

"The first area where average Swedes will see how the EEA is affecting them will be on the price and offering of foodstuffs," says the Swedish commissioner to the EEA's fledgling surveillance authority. "With markets opening up, there will be many unfamiliar products and brands coming in, and prices are going to drop."

The change will also be noticed in public procurement, he adds. "Swedish builders and suppliers are going to face new competition, which should push contract prices down," he says. "But before Swedish contractors get too depressed, they should remember that we're talking about $2 billion in public contracts a day in this market, so they will also have the opportunity for vast new opportunities."

One of the reasons the Swiss voted against joining the EEA was the fear that the dominant EC would dictate the rules of the new market. Mr. Gronvall says there is ample protection written into the EEA agreement against this. "In order for EC legislation to take effect in the EEA, it must first pass the joint EC-EEA committee," he notes, "with laws requiring passage of EFTA parliaments. We will have our say."

But many observers believe passage of the EEA has more than ever made EFTA an EC antechamber - Austria, Finland, Norway, Sweden, and Switzerland have all applied to join the Community. And if that's the case, then it's a good reason, Gronvall says, for countries in East Europe - perhaps Poland, Hungary, the Czech and Slovak republics to join the EFTA first, he suggests.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.