Norway and Switzerland were among the founding Member States of EFTA in 1960. Iceland joined EFTA in 1970, followed by Liechtenstein in 1991. Norway, Iceland (from 1994) and Liechtenstein (from 1995) are also parties to the European Economic Area (EEA) Agreement with the European Union, while Switzerland has signed a set of bilateral agreements with the EU.

The EFTA countries are highly competitive, open economies representing a sizeable market with strong per capita purchasing power. The two Alpine members – Liechtenstein and Switzerland – are established international financial centres and leaders in several industrial sectors including machinary, pharmaceuticals and chemicals. The two Nordic countries – Iceland and Norway – excel in industries related to their abundant natural resources, including oil, gas, electricity and fish, and are active in various service sectors.