Theresa May with Donald
Tusk and Claude Juncker.
Matt Cardy /
Getty
LONDON — With Brexit negotiations stalled in their early
stages and Britain’s exit date rapidly
approaching, earnest discussions are underway about what the
UK can do to avoid a “cliff-edge” Brexit.
One option now being
openly considered by the government is that they follow
aspects of the so-called Norway model of retaining close
ties to the EU without being a fully paid-up
member. Supporters of this model, which include figures
from both the Remain and Leave camps, argue that this ‘softer’
version of Brexit would allow the UK to get as close to “having
its cake and eating it” as possible.
They argue that the Norway model would allow Britain to both
retain full access to the European single market as well as “take
back control” of policy areas that for decades were handled by
the EU.
So would it be possible, or desirable for Britain to follow the
same path as our Norwegian neighbours?
The “Norway model” would mean Britain becoming members
of two key European organisations — the European Free Trade
Association (EFTA) and the European Economic Area (EEA). Norway,
like Lichenstein and Iceland, is a member of both.
EFTA comprises the three countries listed above plus Switzerland,
and facilities free trade between all four. The trade group has
also signed free trade deals with various non-EU countries,
Canada, Mexico and others.
The EEA, on the other hand, is a collaboration of all EU member
states plus Norway, Lichenstein and Iceland. All EEA members —
including the non-EU members — enjoy full access to the coveted
European single market.
The UK quit EFTA in 1972 but has the option of rejoining the
group and then becoming part of the EEA as an EFTA member. Only
EU or EFTA members can currently become contracting parties to
the EEA, meaning if Britain wants to secure full access to the
single market after Brexit, joining EFTA is in theory, the most
straightforward route.
The Norway model’s chief selling point is that it would allow
Britain both to retain full access to the single market and
regain control over powers that under EU membership are
controlled by Brussels. For example, non-EU members of the EEA
are not in the customs union, meaning they can strike new
trade deals around the world, something that Brexiteers like
Trade Secretary Liam Fox argued is one of the biggest benefits of
Brexit.
Joining the EEA as an ETA member will allow “democratic
revitalisation at home and the restoration of sovereignty on a
manageable scale,” Oliver Norgrove, a former Vote
Leave campaigner who is now a member of EFTA4UK, told Business
Insider this week. Norgrove previously supported a
hard Brexit but describes himself as “converted” from a hard
Brexiteer to an advocate for a softer version i.e. the EFTA-EEA
route.
“It [the Norway option]is very often framed as a
compromise but that doesn’t do it the justice it deserves,” he
says.
“The EEA allows us to get our competencies back — but not too
many,” Norgrove said. “One of the issues with leaving everything
and what we call a hard Brexit is we all have these competencies
coming back to Westminster meaning we’ll have to carve, draft and
administer new policy all across the board and that is very tough
to do.
“The referendum result wasn’t a landslide. I think Brexiteers are
guilty of not necessarily treating this as a national pursuit and
they think it’s their toy to play with. We need to think of as
where we go as a country. Single market membership through EEA is
a good compromise as far as acknowledging the concerns of most of
the country. It’s a wretched phrase but we are all in this
together and the effects of Brexit will impact all of us.”
The Norway model is an “off-the-shelf” solution which means
Britain will be able to replicate an existing political framework
rather than attempt to create a range of whole new structures.
“Rejoining EEA by virtue of EFTA gives us the most stability
politically, legally and economically,” Norgrove told BI.
Another major upside of the Norway route is that joining
EFTA is a relatively straightforward process. A state cannot join
EFTA while in the EU but can apply to join while an EU
member state. So, in theory, Britain could submit an application
tomorrow. From there, the length of time from application to
accession could be less than a year, according to David
Phinnemore, Professor of European Politics at Queen’s University
Belfast.
Professor Phinnemore explained the process to BI this week:
“It should be quite straightforward. A country applies,
EFTA takes a decision in the Council, which must be unanimous
among the four EFTA states. They have to agree on the terms but
those a relatively straightforward.
“The two things are to be aware of are 1) the UK would not
automatically become part of the various free trade agreements
EFTA has with non-members, so there would need to be negotiations
around that, and 2) the decision which the EFTA ministers make
would require approval at national level from all four states i.e
in national parliaments. There could be a hold-up there — but I
can’t see it.”
Prime Minister May has long been hostile to European judges
having sway over UK law and has made total judicial independence
for the UK a red line in her Brexit strategy. “We will
not have truly left the European Union if we are not in control
of our own laws,” she declared in her Lancaster House
speech in January.
Joining EFTA will not subject Britain to European judges in any
foreign court. However, joining the EEA as an EFTA
member would require Britain to accept the supervision of
the EFTA court. The EFTA court handles Iceland,
Liechtenstein and Norway’s dealings with the single market — and
Britain would not be exempt. Clearly, this
would be a difficult pill to swallow for staunch Brexiteers who
oppose interference from all foreign judges.
Here’s the thing, though: Britain will likely be forced to
accept the interference of European judges after Brexit, whether
the prime minister likes it or not. This is because a UK-EU
post-Brexit free trade deal as deep, multifaceted and
wide-ranging as the one May has envisioned will be far more
complex than any deal the EU has negotiated before, and will
almost certainly require a judicial body to oversee its creation
and implementation.
This, in theory, could involve a bilateral system where the EFTA
court would oversee the free trade deal alongside the European
Court of Justice (ECJ). Or perhaps even a trilateral system where
the EFTA court would act as an impartial mediator between the ECJ
and a UK court.
“This is certainly an idea out there at the moment,” Professor
Phinnemore said. “You wouldn’t want to create additional
structures and Carl Baudenbacher, EFTA court president, signalled
that they could explore the option of allowing EU-UK disputes to
be referred to the EFTA court. It’s certainly out there for
possible consideration.”
Ultimately, the idea that Brexit will mean a total escape from
the sway of European judges is a far-fetched proposition.
The biggest sticking point when it comes to the Norway model is
what it would mean for immigration to the UK. All EEA members are
required to accept the ‘four freedoms’, including the free
movement of people. Again, this would be a tough pill to swallow
for Westminster Brexiteers, and would likely trigger a backlash
from Leave voters.
However, Article 112 of the EEA Agreement does allow non-EU
member states to opt out from any of the four freedoms if they
are facing serious economic, societal or environmental
difficulties as a result of the freedoms. For example,
Lichenstein used Article 112 to impose controls on EEA migration
due to concerns regarding its modest size and whether it was able
to handle a huge influx of people.
Norgrove concedes it is very unlikely Britain would be able to
negotiate a similar opt-out. “I don’t necessarily think the UK
could arrange the same sort of thing,” he said. This is a view
shared by most academics and commentators.
However, with the latest figures
showing that net migration to the UK this year was 81,000
less than the number recorded in 2016, it may well be the case
that by the time Britain leaves the EU, there will be a clear
desire among politicians and business people for more EEA
citizens to be allowed to come and work in the UK. Immigration
was arguably the most prominent issues during the referendum
campaign, but public opinion could quickly shift should a
pre-Brexit economic downturn await.
And as a Brexit cliff-edge approaches, the appeal of the Norway
model could well grow both inside government and the country.