Settling Interstate Trade Disputes: Lessons from the EFTA Complaints Procedure

When the European Free Trade Association (EFTA) was founded 60 years ago, the contracting parties established a dispute settlement procedure that sought to strike a balance between the need to supervise compliance with the EFTA Convention and the need to respect the sovereignty of the member states. The procedure of Article 31 empowered the EFTA Council to hear interstate complaints, establish examining committees, issue recommendations, and authorize retaliation. This article investigates the successes and failures of this mechanism on the basis of historical documents from the EFTA archives. It provides an overview of the complaints that were brought under Article 31 and analyses how the Council exercised its functions in dealing with these cases. The article evaluates why the complaints procedure quickly fell into disuse, finding that it failed to provide a real alternative to ordinary discussions in the Council. The article argues that lessons can be drawn from this understudied chapter of European integration, concluding that systems of dispute settlement in international economic law should avoid fusing diplomatic and judicial elements if this might preclude an independent evaluation of the legal questions raised in the context of a concrete dispute.