The “EFTA option” would fail to deliver Brexit and make us a permanent rule-taker from Brussels

The “EFTA option” would fail to deliver Brexit and make us a permanent rule-taker from Brussels

The suggestion that the UK could join the European Free Trade Association (EFTA) or European Economic Area (EEA) for a transition period, or perhaps for good, is once again doing the rounds in Westminster.

This proposal is not only ill-informed, it is in effect a new guise for not leaving the EU at all. It also shows a possibly wilful lack of understanding of the
realities of EFTA. I write this as someone who both campaigned for Remain in 2016 and served, until recently, for two years as one of the country’s Trade Ministers.

The advocates of EFTA (currently comprised of Norway, Iceland, Switzerland, and Liechtenstein) suggest simply that joining would give us access to the
Single Market, but without ever closer political union. Sadly, this is wrong on both counts.

First, EFTA itself – as the Minister for Exiting the EU, Robin Walker, told Parliament recently – does not give Single Market access. The EFTA states have
been given access in return for signing the European Economic Area (EEA) Agreement, which the EU uses to harmonise EFTA laws with Brussels: ever
closer union, in other words. The EFTA supporters of what we can call EFTA-EEA are therefore trying to maintain both ever closer union and keep us
in the Single Market.

One of the components of the EEA Agreement is the EFTA Court, which the new proponents of EFTA membership suggest would be useful for Britain
because it is “trusted by the EU”. It is indeed trusted by the EU. The EFTA Court is not in fact an institution of EFTA, but a component of its EEA
Agreement with the EU. This Agreement requires the EFTA Court to follow the rulings of the European Court of Justice.

The European Commission wants the Court “strengthened” further, so as to “function as a mirror to EU authorities”. This means the EFTA Court does not exist for divergence, but harmonisation. This would manifestly not be the “new and equal partnership” the Prime Minister promised in her Lancaster House speech, in which she also ruled out any model already used by other countries.

Meanwhile, if the UK wanted to change its own legislation for domestic or trade reasons, it would be subject to retaliation, as the EEA Joint Committee
would be able to block it. When the Committee disagreed – as it always would in the case of divergence from the Single Market – the EU would be able to
retaliate against Britain’s trade.

The EFTA proponents insist that we would “be able to strike our own trade deals.” This is not the reality. Rather than allowing truly liberalising deals based
on reducing barriers to trade, EFTA countries are only able only to make relatively minor tariff adjustments. So when they suggest that the UK and EFTA
would create “a global trading titan”, all they would accomplish would be another trading vassal to the European Union.

Not only would membership prevent trade freedom and sovereignty, it would also maintain current EU immigration rules. While its proponents claim we would be “in a Single Market with a brake on free movement”, Single Market membership does not come with a brake on free movement, which applies to all EFTA states except tiny Liechtenstein.

Furthermore, EFTA backers proclaim we would have immediate access to the EFTA’s own trade agreements already signed. It is extremely doubtful that the counterparts to these deals would simply roll over the deals done with markets totalling 14 million people, to suddenly apply to markets totalling 80 million people. In fact, the quintupling of the size of EFTA would likely even make the EU seek to re-write the rules of EFTA to bring it even closer into alignment with Brussels.

When EFTA proponents claim we would only “be subject to 20% of EU rules,” there is simply no evidence for this: even the Norwegian government estimates the real figure to be 75%, and the European Parliament itself notes that EFTA countries “have little influence on the final decision on the legislation on the EU side”.

The UK economy is very dependent on services. Indeed, services provide 79% of our jobs and 80% of our GDP. Being in EFTA or the EEA would make us
subject to all of Brussels’ rules on services, without us having a seat at the table when those rules are made.

Like me, another former Remainer who knows the issues well, Lord Hill of Oareford – who was our Commissioner in Brussels at the time of the Referendum – put it well earlier this year when he said: “For an economy that is as dependent as ours on services, how could we in all seriousness subcontract all rulemaking to someone else?”

The real agenda is clear: EFTA-backers are not seeking a transition but see EFTA as a potentially permanent state.

Quite simply, were we to join EFTA and/or the EEA or an EFTA-type arrangement, the United Kingdom would be placed in the category of rule-taker, not rule-maker. We would serve the whims of Brussels. It would not be Brexit at all.