We’re all familiar with the European Union (EU). After all, Brussels stands at the heart of it geographically, economically and politically. But how much do you know about other European frameworks, such as the Schengen Area, the European Economic Area (EEA) and the European Free Trade Association (EFTA)? Far from interchangeable, these four groupings of countries (including the EU) serve different purposes and carry distinct legal, logistical and commercial implications, especially when it comes to import/export procedures, tariff structures and regulatory alignment.
The European Union (EU)
The EU operates a single market and customs union for its 27 member states, enabling the free movement of goods, services, people and capital. This framework bestows a number of advantages on businesses including a lack of customs duties on goods traded between member states; harmonised product regulations making it easier to sell goods across borders without meeting different national standards; a common external tariff applied to goods entering the EU from third countries; and access to EU-wide trade deals negotiated on behalf of all members. This political and economic union enables businesses based in the EU to benefit from seamless access to all other EU markets, making it one of the most frictionless trade environments globally.
The Schengen Area
Although often mistaken as such, the Schengen Area is not a trade zone. It allows for the free movement of people between participating countries through passport-free travel. The Schengen Area and the EU overlap considerably given that 25 EU countries (excluding Ireland and Cyprus) are members of the Schengen Area. Iceland, Liechtenstein, Norway and Switzerland bring the total number of Schengen countries to 29.
The Schengen Area has no impact on customs rules, meaning that it has no effect on goods crossing into countries like Switzerland or Norway. However, it can improve logistical efficiency by allowing employees, delivery drivers and service technicians to cross borders easier and faster. As such, it might be more beneficial to set up a subsidiary in a Schengen country than a third country. Business travel to Schengen countries, for a meeting or a trade fair, will also be much more seamless.
The European Economic Area (EEA)
The EEA extends the EU’s internal market to three non-EU countries: Norway, Iceland and Liechtenstein. This means that these countries follow most EU rules on the free movement of goods, services, capital and people even though they are not EU members. Brussels-based businesses can benefit from this reduced regulatory friction as well as product standards, consumer protection and environmental rules that are largely aligned. However, customs procedures still apply because these countries are not in the EU customs union. For exports to one of these three countries, businesses will still need an EORI (economic operator registration and identification) number and to submit a customs declaration, even though the product doesn’t face a tariff. In practice, the EEA can be seen as a “light” version of the EU from a market access standpoint, but with some additional administrative overhead.
The European Free Trade Association (EFTA)
The EFTA is a free trade bloc made up of the four non-EU Schengen countries: Switzerland, Norway, Iceland and Liechtenstein. Unlike the EU, it is not a customs or political union and does not have a common external tariff or shared regulatory authority. The EFTA stands for free trade in principle, but offers neither the regulatory or procedural ease that EU or EEA membership provides.
Geographically close, but good trade partners?
Although it is not in the EEA, Switzerland is Belgium’s main trading partner in the EFTA. Pharmaceuticals dominate the exchange, but machinery, chemicals and precision instruments are also significant. The EU and Switzerland share a complex set of bilateral agreements (over 100 sector-specific agreements) giving the country partial access to the single market. According to Jean-Philippe Mergen at Beci, Switzerland is in the top 3 countries for which companies have requested an ATA carnet, which enables temporary goods imports – for trade fairs, for example. Switzerland is an attractive location for business endeavours, given its wealth both financially and of market opportunities. Like Belgium, Switzerland has three official languages: German, French and Italian.
Norway is a major strategic partner for Belgium, supplying roughly 30% of Belgian gas imports and importing over €1.2 billion in Belgian goods each year. As an EEA member, Norway applies EU product standards, but is outside the EU customs union, meaning exporters must submit customs declarations and proof of origin to benefit from preferential tariffs. Key growth areas include renewable energy, biotechnology and specialised agri-food products.
Iceland offers a smaller but stable market, also within the EEA. It aligns closely with EU product regulations, minimising technical barriers, but requires customs formalities and origin documentation. With strengths in aluminium production, seafood and renewable energy, Iceland presents niche opportunities for Belgian suppliers of technology, engineering solutions and energy-efficient products.
Liechtenstein, despite its size, is an affluent, export-driven economy. It is in both the EEA and a customs union with Switzerland, so it applies EU product standards but follows Swiss customs procedures. This wealthy market has strong demand for precision engineering, electronics and financial services, though exporters should be aware that goods must clear Swiss customs before entering Liechtenstein.
Ursula von der Leyen's visit to Iceland in July 2025. From left to right: Kristrún Frostadóttir, Ursula von der Leyen and Katrín Gunnarsdóttir, Icelandic Minister for Foreign Affairs.
Takeaways for Brussels-based businesses
Without a doubt, Brussels-based businesses benefit most when trading within the EU as it is the only one to boast a lack of customs duties. However, business with companies in EFTA or EEA countries may benefit from reduced regulatory friction compared to other third countries. As for the Schengen Area, the only real advantage it offers is the free movement of people.
Whichever country you would like to trade with, check whether the country has a free-trade agreement with the EU. Use the Access2Markets platform by the European Commission to check tariffs, rules of origin, VAT rates and required documentation. The international team at Beci is also there to help.
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