Why Brexiteers should write off the idea of ‘Norway for now’

Why Brexiteers should write off the idea of ‘Norway for now’

Yesterday on this website George Trefgarje made the case for the so-called “Norway for now” model

In responding to George Trefgarne’s piece, I acknowledge that the EEA model provides some advantages over EU membership, but I am afraid I regard the whole proposition of ‘Norway for Now’ as ill thought through and so politically naive to the point of being actively misleading. This proposal is no more than a Trojan Horse to recapture the UK into the EU at a future date. The EEA after all was created in 1993 to help countries into the EU, not out of it.

So taking Mr Trefgarne’s points:

  1. Firstly he claims that everything will be rejected in Westminster apart from EEA. He fails even to mention the future relationship that has been offered to us not just once but three times by the EU – that of a SuperCanada/CETA+++ free trade agreement: it was offered first

by President Tusk on 7th March in response to our red lines, restated by Michel Barnier in August, and adding in public procurement access, and yet again by President Tusk on October 4th saying: “From the very beginning, the EU offer has been a Canada+++ deal. Much further-reaching on trade, internal security and foreign policy cooperation. This is a true measure of respect. And this offer remains in place.”

I have heard directly that the EU does not want us messing with their Single Market or Customs Union, they want the kind of deal they are currently doing with Japan, Australia and New Zealand – a global free trade agreement. This is also strongly the position of my fellow Brexiteers in the ERG group, and media indications such as in the Sunday Times and Times suggest a most welcome ‘pivoting’ by the Government towards this position.

Consider then the scenario where the EU and UK agree a SuperCanada style agreement – will MPs at that point turn their back on their friends and allies in the EU, and the delight and relief of the public to embrace a ‘no deal’ option, especially when they are the first to highlight no deal as worse than Armageddon? Caroline Flint sensibly talks of 30 to 40 Labour MPs backing a reasonable deal, and in these circumstances a SuperCanada is entirely deliverable and highly desirable.

The reality is that even if we have to accept a no deal ‘hell’ as he puts it, the UK will be a third country and the largest single market for the rest of the EU, and just as Japan, Canada, Australia and New Zealand have done or are doing EU FTAs, so the UK would be doing one from the same WTO rules position.

  1.  ‘Norway for Now’ really means ‘Norway or EU forever’.

What is ‘now’ meant to mean? Is it the 23 years that Turkey has spent in the ‘temporary’ EU Customs Union for goods, or the 25 years Norway has spent so far in the EEA? I think the idea that we can somehow adopt this ‘less than perfect’ alternative now only to renegotiate a Canada deal later is totally disingenuous. This is a case of getting out of the Chequers frying pan into the EEA fire.

I have spent 9 years on the EU’s trade committee and I can report that all trade deals require huge amounts of time, resource (I challenged why the EU’s trade negotiator with the US was also doing India on the side!), and above all political will. I met Justin Trudeau when the Canadian deal CETA was signed, but he was not even sure the deal would be voted through at that point after seven years on and off negotiations, and risked humiliation giving a speech to a Parliament that may have voted no to the deal.

The reality is that we have a unique situation and opportunity now that will not be repeated. Article 50 compels the EU to negotiate a withdrawal agreement and future relationship/trade agreement with us, by law. After 29th March 2019 there is no compulsion on the EU to negotiate a better trade deal with us. They may prioritise the USA, or India (10 years of negotiation so far), or China, or deny us out of spite. Look too at how long the wealthy states of the Gulf Cooperation Council have been kept waiting – 18 years. Now is our time.

The campaign group who won the 1994 referendum in Norway against joining the EU then (by 52% to 48% incidentally) have long wanted an alternate free trade agreement along Canada lines, but there has been no progress at all towards renegotiation. Helle Hagenau of ‘Neil til EU’ concludes: “we would warn you that EEA membership is subject to the same tidal pull of European integrationism as EU membership; that the safeguards are rarely robust enough, and that the costs are greater than with a looser and better form of trade deal.” Nor is it the simple solution that is claimed: Norway’s affiliation to the EU comprises over 70 different agreements, formally independent of the EEA. When and how are these add ons to be negotiated?

There is the issue of money. We have offered £39 billion – not to ‘buy’ a trade deal but to settle our dues and to create longer term goodwill. So, given the EU doesn’t have to negotiate with us next time, how much will be the bill then: £50 billion? £100 billion? Certainly enough to put us off renegotiating a deal – something even Cameron struggled to do. Cameron dismissed Norway’s EEA memorably being: “no say, still pay, no way!”.

And for Mr Trefgarne’s claim the EFTA Court being separate from the ECJ, I find with former International Trade Minister Greg Hands conclusion: “the EFTA court does not exist for divergence, but harmonisation” with the EEA agreement requiring the EFTA court “to follow the rulings of the European Court of Justice”.

In short we would get stuck in EEA forever, if not forced back into the EU forever, on this false premise.

  1. The UK risks humiliation as Norway (and even Switzerland) may well veto the UK’s application to EFTA, which out of the EU is the only means for staying in the EEA. 

Devotees of this scheme blithely assume EFTA nations will welcome the UK back into EFTA with open arms. The Norwegian Prime Minister Erna Solberg made it very clear that is not the case. She said just last month that it would be “a little bit difficult for the rest of us” in accepting  our application. Other trade MEPs have reported that Switzerland would also veto. Essentially we would be messing up their cosy arrangement with the EU, and as an EU diplomat was reported saying: it would be like an elephant getting in a bath and then getting out, leaving no water for the others.

  1. The UK economy is much more diverse, wide and complex than the Norwegian economy making the EEA unsuitable for the UK to slavishly accept EU laws.

Despite Norway’s impressive wealth per head, the UK is still 12 times its size, and is larger than India or Russia as the fifth largest in the world. Norway’s economy is mainly confined to oil, gas, fish and defence – whilst the UK would be enslaved to all sectors from engineering to cars, aeroplanes to chemicals, pharmaceuticals to financial services with next to no say.

Vicky Ford MP, a former Chairman of the European Parliament’s Internal Market Committee has frequently alluded to Norway having to lobby MEPs on vital national interests because it lacked its own – a deeply unattractive halfway house. Mrs Ford said in the Commons: “The economic links between the UK and the EU are too diverse to simply adopt the Norway model. In return for access to the single market on certain sectors, Norway accepts complying with the EU regulations for those sectors with only a very limited say on how those regulations are formed. Maintaining a regulatory framework without the UK being able to contribute input in sectors where the UK has leading expertise such as financial services, advanced pharmaceuticals and increasing digital is bound to end up in continual arguments.”

The ‘Decision shaping’ of Norway for Now is no substitute for sovereign decision making.

  1. The Brexit would be grossly betrayed by this outcome, as there will be no control of borders against free movement

 Mr Trefgarne claims there are some controls on free movement under the EEA. I am sorry this is a comic level overclaim. Yes Liechtenstein has a derogation on free movement but only because it is very small – it’s population of 38,111 people is one tenth of Britain’s net immigration every year. Signing up to the EEA would give us no effective control over EU migrants, which was a major issue in the Referendum (33% of Leave voters voted primarily due to control of borders; but many of the 49% voting Leave on the basis of sovereignty included sovereign control of borders).

Migrationwatch found the “so-called ‘emergency brake’ is most unlikely to be effective so the outcome would be continue free movement for a number of years” and cite a NatCen poll in March 2017 which found 68% people wanting an end to free movement.

This betrayal would either put UKIP back into business with 20% plus of the vote or lead to a far more angry movement such as the anti-immigrant Alternative for Deutschland party that has effectively toppled the mighty Merkel as Chancellor, splitting the Conservatives and keeping a Corbyn government in power.

  1. EEA does not automatically solve the claimed Northern Ireland issue

Frequently confused is whether Norway is in the EU Customs Union – I even heard this claimed on the BBC News. It isn’t – it has its own customs union, and is quite protectionist over high tariffs on agricultural products and high in alcohol duties. So it does not solve the claimed issue of the border on the island of Ireland – there will still be the same need to have a customs border North and South that the Canada option will also need to address, except that offers 100% tariff and quota free access.

So the real choice is a more fundamental one than such technical models: it is about what we want to be as a country and where we choose ‘Globalsphere’ – to be a fully independent, sovereign nation such as the USA, Canada, Australia, India, Japan or New Zealand with a friendly global trade deal with the EU – or ‘Eurosphere’, where we remain entrapped in the EU’s orbit through EEA, EFTA or the Defence Union – rather like the dead moon revolving around a living earth.

Norway for Now just keeps us trapped and it should be politely but firmly written off.