Brexit: the case for switching to the EEA and EFTA option

There has been much talk of late about the ‘Norway’ option for Brexit, notably after Nick Boles MP published in September his plan for a “Better Brexit” to avert the “humiliation” of Theresa May’s stalled Chequers plan. Now the much-maligned Norway idea is back on the agenda, to the chagrin of Brexiteers and others who say it is too late to make it work. But look more closely and it isn’t quite what you think.

In a bold paper, Norway then Canada, former Telegraph Economics Editor (and Reaction contributor) George Trefgarne, drawing on the work of Oxford professor George Yarrow, makes a powerful case for abandoning the current negotiating strategy. Instead, we should capitalize on Britain’s existing membership of the European Economic Area (EEA). From here, we should seek to join EFTA, the European Free Trade Association which consists of Switzerland, Norway, Denmark and Lichtenstein. This could then be used as a stepping-stone towards a much freer relationship, like that enjoyed by Canada, and importantly it would give us the time necessary to work out such a plan.

Although this might look like an embarrassing climb-down for the government, Trefgarne argues that moving towards a relationship with the EU like Norway’s would be far better than the Prime Minister’s Chequers proposal with its backstops and long implementation periods, and importantly it would be much more likely to succeed, he says. And, as Trefgarne points out, one of the best – and most underused – of political strategies can in fact be a U-turn.

The key point is that Britain is already a Treaty member of the EEA and it may remain so after Exit Day on 29th March 2019. The UK enjoys existing legal rights under this Treaty which could very well force the EU into co-operation by allowing us to move to a Norway model. If the European Commission refused, they could find themselves being sued in the International Court of Justice – the EEA Treaty commits the signatories to “enhance and facilitate”, which puts Britain on a much stronger legal footing. Lord Justice of Appeal Sir Richard Aitkens has publicly endorsed this view.

What does the EEA consist of? Essentially it involves participation in the Single Market but not in the customs union. We would be outside the much-hated Common Agricultural Policy and Common Fisheries Policy, and would enjoy low or zero tariffs on most goods. Rules of origin checks would need to be applied – as they already are in the case of Norway – but other countries seem to manage this just fine.

Let’s look at some of the objections to the idea.

Some argue that it would block our ability to strike trade deals outside the EEA. However, EFTA states enjoy 27 deals with 43 other countries, and Norway has its own deal with China. We would be outside the customs union – something Chequers would not fully accomplish – with all the freedom that brings.

Surely being outside the customs union would spell havoc for the Irish border? Well, Great Britain and Ireland would both be in the Single Market, which would ease the problem. And Norway is able to cope with customs checks facilitated by technology in its trade with its neighbours Denmark and Sweden. It doesn’t seem to be a problem there.

Many point out that we would still have to pay into the EU budget, but this isn’t true. We would only make specific contributions for EU programmes that could be as low as £1.5bn, as opposed to the £9.4bn we currently pay, and we would be gaining huge access to trade in exchange.

Brexiteers say that the choice of Norway would leave us subject to EU rules without us having a say in them. But we would only have to follow the rules of the Single Market, which represents just 28% of EU law. The jurisdiction of the European Court of Justice (ECJ) – a bugbear for sovereignty hawks – would be brought to an end. As an EFTA country, the UK would be subject to the EFTA court’s rulings, but this is an independent tribunal which would have the UK as a voluntary and sovereign member state. EU directives would cease to apply to us unless they were relevant and we would only end up in the EFTA court as a nation in order for disputes to be arbitrated. The reality is that Norway pushes back on EU law up to 40% of the time, and usually gets its way.

OK, now for the big one: free movement. Many, including the Prime Minister, seem to believe that EEA membership would not allow us to control our borders and therefore the government would be unable to deliver on this key promise of the Leave campaign. They are only partly correct.

Significant opt-outs from the Free Movement principle exist within the Treaty, and they are opt-outs which Norway and Lichtenstein have both used – though not to the maximum. It might be politically touchy to exploit all of the limits to free movement on offer to the full, but the fact is the Treaty says what it says. Importantly, free movement of people would become free movement of ‎workers, with the possibility of a numerical cap if necessary. This means that immigrants would need, for example, to have a job and a home lined up before arriving.

Would this satisfy the Brexiteers? It’s hard to see the Leave-supporting press running a story other than one of betrayal over borders if the EEA option is invoked.

However, an opinion survey by King’s College London called “What sort of  Brexit do the British people actually want?” (October 2018) shows Norway to be the most popular model, gaining 43% support. Furthermore, it has to be remembered that a lot of the immigration that British citizens object to is from outside of the EU/EEA. If the government combined an announcement of its intention to remain in the EEA – while using every single provision possible to limit free movement within the Treaty’s terms – with a significant policy shift on non-European migration, then as a package it could possibly be sold as an immigration cut – and it would be the truth.

Most importantly of all, the EEA need not be a permanent solution. If the EU were to make life difficult for us – for example, by introducing laws targeted at the City – we could trigger the EEA’s withdrawal process (Article 127) whenever we liked. It only has a 12 month leaving timeframe and is far easier than the agonizing Article 50 process – it couldn’t be much harder, could it?

The main fear of Brexiteers is that if we are parked in the EEA then we will never leave it. There would need to be parliamentary approval for the move and right now it’s hard to see the arithmetic or the political will being there – just look at the problems finding a majority for Chequers faced by Theresa May. If Jeremy Corbyn leads Labour to victory in 2022 (or earlier), Britain moving further away from Europe is almost impossible to imagine.

But Brexiteers should consider the upsides: inside the EEA Britain would be “safe”. Safe, that is, from the potential economic chaos of a No Deal scenario, but also from the threat of a second referendum. Both of these events could lead to Brexit not happening at all. The EEA may not be perfect, but it can be made better under the provisions that already exist within its rules, and it may very well open doors to a Canada-plus future, while closing the door forever on Remain. Parliament should at least be discussing this.