The Stockholm Convention created the European Free Trade Association in 1960.
The convention was signed in Stockholm on 4 January 1960 by Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom. EFTA was designed as a free-trade area for industrial goods, while its members retained more independence over external commercial policy than members of the European Economic Community.
The agreement differed from the Treaty of Rome, which established the European Economic Community in 1957. EFTA did not create a customs union: member states generally maintained their own tariffs and trade policies toward non-members. This distinction is important because a free-trade area removes internal trade barriers but permits separate external tariffs, whereas a customs union uses a common external tariff.
Several founding members later joined the European Communities or the European Union. EFTA today consists of Iceland, Liechtenstein, Norway, and Switzerland. The organization also participates in the European Economic Area through three of those states.