The Agreement creating the European Economic Area(EEA) entered into force on 1 January 1994. It allows the EEA EFTA States (Norway, Iceland and Liechtenstein) to participate in the Internal Market on the basis of their application of Internal Market relevant acquis. All new relevant Community legislation is dynamically incorporated into the Agreement and thus applies throughout the EEA, ensuring the homogeneity of the internal market.
The EEA Agreement is concerned principally with the four fundamental pillars of the Internal Market, “the four freedoms", i.e. freedom of movement of goods, persons, services and capital. But also “flanking policies” such as social policy, consumer protection, and environment policy may be covered. The EEA Agreement does not cover agriculture and fisheries.
The EEA Agreement allows for EEA EFTA participation in Internal Market relevant Community programmes and agencies, albeit with no right to vote. The EEA-EFTA states also make financial contributions towards the reduction of economic and social disparities in the EEA.
The Agreement covers most of the substance of the EU's relations with the EEA EFTA States. The updating of the Agreement through the incorporation of new relevant Community legislation generally runs smoothly and thousands of legal acts have been extended to the EEA to date.