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Does The European Free Trade Agreement has effect only in Norway, Swiss and Iceland?

Thanks to the European Free Trade Association, do the member states (Norway, Swiss, and Iceland) of EFTA can deal with one another in the boundaries of their countries, knocking down the trade barriers in their countries, BUT NOT on the European Union territory?
- EFTA Wikipedia says:
“This Convention provides for the liberalisation of trade among the member states. Two of the EFTA countries (Iceland and Norway) are part of the European Union Internal Market through the Agreement on a European Economic Area (EEA), which took effect in 1994; but Switzerland opted to conclude bilateral agreements with the EU”
They said “member states”, member states of the EFTA?
- Schengen Wikipedia:
“All states which belong to the Schengen area are European Union members, except Norway, Iceland, Liechtenstein and Switzerland, which are members of the European Free Trade Association (EFTA).”

EFTA is one association and the European Union is another association. Most countries in Europe are in either the EU or EFTA, but no country is in both of them. The European Economic Area (EEA) is an agreement that all the EU countries and three of the EFTA countries participate in.

The Schengen agreement (Schengen area) is an agreement between several European countries. It’s about abolition of systematic border controls. If you go from one Schengen country to another, you don’t usually have to go through border control. The countries that participate in the Schengen agreement are all the EFTA countries and some of the EU countries (not all).

EFTA members:
Iceland
Liechtenstein
Norway
Switzerland

EU members:
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom

EEA participants:
Austria (EU)
Belgium (EU)
Bulgaria (EU)
Cyprus (EU)
Czech Republic (EU)
Denmark (EU)
Estonia (EU)
Finland (EU)
France (EU)
Germany (EU)
Greece (EU)
Hungary (EU)
Iceland (EFTA)
Ireland (EU)
Italy (EU)
Latvia (EU)
Liechtenstein (EFTA)
Lithuania (EU)
Luxembourg (EU)
Malta (EU)
Netherlands (EU)
Norway (EFTA)
Poland (EU)
Portugal (EU)
Romania (EU)
Slovakia (EU)
Slovenia (EU)
Spain (EU)
Sweden (EU)
United Kingdom (EU)

Schengen participants:
Austria (EU)
Belgium (EU)
Bulgaria (EU)
Cyprus (EU)
Czech Republic (EU)
Denmark (EU)
Estonia (EU)
Finland (EU)
France (EU)
Germany (EU)
Greece (EU)
Hungary (EU)
Iceland (EFTA)
Italy (EU)
Latvia (EU)
Liechtenstein (EFTA)
Lithuania (EU)
Luxembourg (EU)
Malta (EU)
Netherlands (EU)
Norway (EFTA)
Poland (EU)
Portugal (EU)
Romania (EU)
Slovakia (EU)
Slovenia (EU)
Spain (EU)
Sweden (EU)
Switzerland (EFTA)

I hope that clears it up for you.

United States of Europe:The Lisbon Treason P 5/9