Andorra signs EU association deal to access single market while keeping border controls

Andorra has formally signed an association agreement with the European Union that would give the Catalan-speaking principality access to the EU single market while allowing it to retain border controls and remain outside the bloc.

The deal provides for the free movement of goods, people, services and capital, although Andorra will not join the EU or the Schengen area.

A separate arrangement will preserve the absence of border checks with France and Spain.

Andorran Prime Minister Xavier Espot described small countries as "reliable, constructive and committed partners" in Europe, despite their "different" histories.

The agreement, signed on Monday, follows a negotiation process launched in December 2014.

It still requires European Parliament consent, followed by a consultative referendum in Andorra, expected after the parliament votes, potentially in January.

If voters back the deal, Andorra's parliament must approve it by a two-thirds majority before final ratification by the Council of the European Union.

The agreement also requires the consent of Andorra's co-princes, French President Emmanuel Macron and the Bishop of Urgell, Catalonia, Josep-Lluís Serrano Pentinat.

The deal includes transitional periods for sensitive sectors, including 30 years for tobacco, 15 years for financial services and seven years for telecommunications.

Mobile roaming charges are expected to be abolished after seven years, subject to minimum quality and coverage requirements.

Andorrans would gain the right to live, work, study, retire and establish businesses in EU countries under the same conditions as EU nationals.

However, they would not be able to vote in European elections, and Andorra would not be required to contribute to the EU budget.

An economic study cited by the Andorran government estimates the agreement could increase the Pyrenean microstate's GDP by 5% by 2050 under the most conservative scenario.