Brexit – The Return of the Norway Option?

by Andrew Stuttaford

As British Prime Minister Theresa May’s preparations—to give that ill-thought collection of platitudes and impossibilities too kind a noun—for ‘hard Brexit’, a dog’s Brexit if ever I saw one, pave the way towards who knows what, EU Referendum’s Richard North highlights the fact that the EU Commission may be considering suggesting that Britain choose the ‘Norway option’ (to put it too simply, Norway is in the EEA, an arrangement that places it within the EU’s single market without the burdens of EU membership or participation in the EU’s customs union).

We’ll see if this comes to anything, but it’s worth noting a few points about the Norway option that are either overlooked or misdescribed in the Politico piece recounting these new musings out of Brussels:

Such a plan, however, is a toxic idea for many hard-line Brexiteers because it would require the U.K. to accept the four founding EU freedoms of goods, services, people and capital. One of the central themes motivating many people to vote for Brexit was taking back control of immigration policy.

That’s true, except when it’s not.  Immigration into Norway from the EU is governed by somewhat more restrictive rules than would be the case if that country were in the EU. What’s more, Norway can unilaterally trigger an emergency brake that could limit EU immigration under certain conditions. Quite how this would work, and for how long, is a matter of legitimate legal and political debate, but the mere fact that this reserve power is there would restore a degree of control to the UK over its borders that does not now exist.  

Politico:

Britain would also have to continue paying Brussels in exchange for access to the EU market.

North:

For sure, Norway pays for services rendered through the decentralised agencies, but it retains control of its expenditure on EEA/Norway grants.

 Politico:

The U.K. also would have to fully implement EU laws and regulations — while losing any say in drafting or vetoing them.

This is a bogeyman that will not die. Once again: Norway is not a member of the EU. Most new EU rule-making does not apply to it. Additionally, an increasing number of those single market rules that apply to Norway are set by international bodies operating above the EU level, international bodies in which Norway, unlike EU members, has a seat of its own. Oh yes, there’s one other thing. Under certain circumstances, Norway does have a ‘right of reservation’: Under certain circumstances, it can decline to implement an EU law with which it disagrees (Article 102 of the EEA Treaty), a veto, in other words, so far as Norway is concerned. 

Politico:

“[The Norway option is] an interim solution that causes the smallest possible disturbance for business on both sides of the Channel,” one European diplomat added. Like Norway, the U.K. would not be part of the customs union, which means it could strike its own trade deals with countries around the world.

“The smallest possible disturbance for business” is, as hard Brexiteers sometimes appear to forget, a good thing. Although the British economy has—contrary to the often grotesque fear-mongering of the Remainers—performed pretty well since the Brexit vote, it needs to be remembered that, for now, the UK remains within the EU and, as businesses contemplate the possibility of hard Brexit, some clouds are already appearing in the sky.

Sadly, the best guess is that even if the Norway option is offered to the UK, Theresa May—a politician who not only looks gift horses in the mouth, but shoots them— will decline it.

So what then?

Take a look at an earlier post by Dr. North in which he examines the structure of the exit mechanism provided for the UK under the EU treaty:

Talks on a free trade agreement [between the EU and the UK] are only going to be concluded “once the United Kingdom has become a third country”.

Spelling it out in plain language…we now have a situation where the talks on a long-term trade deal will not even start until [the UK has] left the EU.

Thus, the only substantive issue on the table after the exit terms have been settled is the shape and scope of the transitional arrangements – and the price [the UK has] to pay for them.

Looking at the [huge range of] issues to be covered, the only workable solution… is for the UK to opt for the status quo – continued implementation of the acquis communautaire [broadly speaking, EU law] under the jurisdiction of the Commission and the ECJ [the EU court]. But… outside…the EU, and bereft of the institutional architecture of the EEA, [the UK] will have no direct representation, nor facility to influence the rules, or their implementation.

So much for ‘taking back control’…

Richard North:

The problem for Theresa May is that she has left herself without a choice. Faced with a plane crash Brexit, which is the necessary consequence of the “clean break” that the right wing of her party says it wants, and no time to seek a credible alternative [the EU exit procedure has to be completed within two years], Mrs May is being led to down the path to capitulation with the same certainty of a truck full of cattle arriving at an abattoir.

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