Unexpected guest: Portugal and the foundation of EFTA, 1956-1960

Abstract

The purpose of this article is to explain how Portugal became one of the founder members of EFTA, with a right to special status for its developing economy. I start by explaining how, during the 1956-58 negotiations for the free trade area (FTA) of the Organisation for European Economic Cooperation (OEEC), Portugal managed to determine the special status its backward economy would require - and which the developed countries of the OEEC would accept, unlike the excessive demands of other developing countries. The historic significance of that special status, once it had been approved by an OEEC group of experts, lies in the fact that it was a key element in gaining acceptance by the remaining EFTA countries of Portugal's membership in 1959, becoming as it did the basis for annex G to the Stockholm Agreement. This article also analyses the debate which took place in the Portuguese External Trade Office, which was to lead to the approval of this special status. Finally, I focus on the successful negotiation of that special status in the EFTA negotiations.