Andorra · 25 years of customs union with the EU

Andorra is not a member of the European Union. Due to its location between France and Spain, however, the principality is economically closely linked to the European single market. When the agreement was concluded, the present-day EU did not yet exist; the contracting party was the European Economic Community (EEC). The European Union was created only with the Treaty of Maastricht. The rights and obligations arising from the agreement were later transferred to it.

The agreement created a customs union for industrial goods. Customs duties and charges having equivalent effect were eliminated in mutual trade. With regard to goods from third countries, Andorra in principle adopted the common customs tariff and parts of the Community’s customs provisions. Agricultural products were not included to the same extent. A Joint Committee was established to oversee implementation and deal with disputes.

For the small state, this arrangement was particularly relevant because a large proportion of its trade in goods is conducted through its two neighbouring countries. Andorra’s economy is strongly oriented towards trade, tourism and services. A regulated customs connection facilitated trade with the European economic area without Andorra joining the Community or the EU. At the same time, the country had to apply European provisions in the treatment of imported goods.

The Customs Agreement must be distinguished from the later Monetary Agreement. Andorra previously used the French franc and the Spanish peseta and subsequently adopted the euro, initially without the right to issue its own coins. Only a separate monetary agreement allowed the principality to mint its own euro coins. The commemorative coin thus combines two levels of Andorra’s relations with the EU: the older integration in trade policy and the more recent right to participate in the euro system with nationally designed coins.

The anniversary was a suitable occasion for issuing a coin because the agreement is one of the enduring contractual foundations of relations between Andorra and the EU. It represents institutionalised economic cooperation, even though the principality has remained outside the Union.