Why I, as a Norwegian, would strongly discourage the UK from pursuing the “Norway option”

Why I, as a Norwegian, would strongly discourage the UK from pursuing the “Norway option”

As the results of the British referendum became clear on the historic morning of June 24th, we at Nei til EU immediately released a statement saluting Brexit as “a victory for democracy”.

It continued:

“The British people have delivered a clear rejection of the ambition to create a United States of Europe, which is undermining democracy in Europe. This is the first time a country has disaffiliated from the EU. After having been granted increased autonomy, Greenland chose to leave the EU in 1985, but Denmark is still a member. Nei til EU expects that the British Leave vote will inspire a fundamental debate about the EU in member states. Europe and democracy deserve it.”

Norway is now following the progress towards Brexit with great interest and anticipation. Norwegians voted “No” to the EU in a heated referendum in 1994 – and we are not regretting that choice. Quite the opposite: there has been a rock solid majority against EU membership for more than ten years. 66 percent are now opposed to the EU, according to the most recent poll, with only 16 percent supporting membership and 18 percent undecided.

For decades, Norway has enjoyed easy access to the EU market: since the 1970s through a free trade agreement, ensuring tariff-free trade for all goods except agricultural and fish products, and since 1994, through the more comprehensive European Economic Area (EEA) agreement, making Norway part of the Single Market.

Norway also participates in EU programmes on research and education, giving universities and students access equal to EU countries. Of all EU legislation adopted in the period 2000–2013, less than 10 percent was incorporated into the EEA agreement. If we compare all legal acts in force, the EEA agreement amounts to 26 percent of current EU legislation. Norway does not contribute financially to the EU budget but has established, together with Iceland and Liechtenstein, the EEA Grants which aim to reduce social and economic disparities in the EU.

But even the EEA is too much of the European Union for us at Nei til EU. The EEA is one-sided, in that all new legislation comes from Brussels. The Surveillance Authority (the ESA) and the EFTA Court are challenging national sovereignty, enforcing Norway’s EEA obligations on areas covered by the free movement of goods, capital, services and persons.

The EEA, which was established on 1st January 1994, has proved to have a far broader scope and more serious consequences than described by our government when the agreement was approved by our National Assembly. The EEA is founded on the same market principles as the EU: the free movement of goods, services, investments and labour. EU legislation applies to all areas covered by the agreement, including competition and public funding. Legally, regulations implemented according to the EEA override Norwegian legislation. The EEA also includes some less controversial issues, including research, education, environment, culture and tourism.

Some claim Norway’s prosperity is due to the EEA. But we at Nei til EU do not share this point of view, even though our opposition to the EEA is more based on issues such as democracy, consumer interests, labour conditions and welfare. A study conducted by Norway’s official statistics bureau (SSB) states that total revenue from the trade rules of EEA and WTO is 0.77 %. That is equivalent to only a few months’ average economic growth in Norway.

Other positive effects of the EEA are few and limited: we formally get influence in the development of new EU legislation and we are more quickly and easily involved when the EU launches new programmes for culture, education and research but we do, of course, have to pay for our participation. And we were also involved in similar programmes prior to the establishment of the EEA and would most probably be more than welcome to participate in these programmes in the future, even without the EEA.

The main headache of the EEA, however, is the lack of democracy. Even our Prime Minister, Erna Solberg, sounded a warning about this before the UK referendum, stating that “you’ll hate it”. She elaborated: “That type of connection is going to be difficult for Britain, because then Brussels will decide without the Brits being able to participate in the decision-making.” At home, however, Solberg is still making a case for the same EEA agreement – a double standard, if you ever saw one.

EEA legislation and its enactment, supervised by the ever-eager Surveillance Authority in Brussels, is interfering with and limiting the policies of national, regional and local authorities. We see three major democratic deficits of the agreement:

  • The EEA’s so-called dynamic system, which means that the substance of the agreement is constantly expanding
  • The EEA is very one-sided. It is changed through decisions and legislation in the EU, while similar new decisions in Norway or any other EFTA state do not affect the agreement.
  • The EFTA Court does apparently not value in any significant way the considerations and premises of the EFTA parties. In an important Norwegian case on reversion of the rights to waterfalls, ensuring national long-term ownership, both Norway and Iceland had the same understanding that this issue was outside the scope of the agreement. This did not impress the Court, which decided in favour of the ESA’s complaint. This case, and many others, shows that the EEA has transferred political power from national authorities to the ESA and the Court.

The Brexit referendum has already had an impact on Norway’s debate on the EU and the EEA. Recently our Centre Party (Senterpartiet) claimed that it will not join a new coalition government after the 2017 election without changes to the EEA agreement (having been a member of the “red-green” government between 2005 and 2013). Also, the opposition to the EEA is substantial in the current junior partner in the current coalition government, the Progress Party (Fremskrittspartiet).

Since we expect the UK to leave the Single Market and conclude one or more trade and co-operation agreements with the EU, this would be the final nail in the coffin to the claims we often hear in Norway that there is no alternative to the current EEA agreement.

Nei til EU wants Norway to leave the EEA, and instead negotiate a new trade agreement with the EU. Norway and the EU have mutual interests in fair trade relations, Norway being its fifth largest trading partner. Norway has more than 70 bilateral agreements with the EU on different areas, such as the association to Europol. These agreements are separate from the EEA.

For this purpose, Nei til EU joined forces with several other organisations to produce a report on various alternatives to the EEA, which can be read in English here. A new trade agreement would be without any supranational surveillance institution or court. The WTO agreements would of course also be a foundation for trade relations, independent from the results of future Norway-EU negotiations.

Prior to EEC membership in 1973, the United Kingdom was of course a member of the European Free Trade Association (EFTA), which now consists of Norway, Switzerland, Iceland and Liechtenstein. EFTA is an inter-governmental collaboration, and nowadays the vast majority of Norway’s international trade agreements are negotiated through EFTA. An EFTA+ that included the UK would be a significant economic alliance. Switzerland and Norway are the EU’s fourth and fifth largest trading partners. Britain is the second biggest national economy in the EU.

Straight after your referendum, various Norwegian ministers dismissed the possibility of inviting the UK to join EFTA. It has since become evident that such a dismissal is unfounded, and the government’s official position is now to be open to it.

We at Nei til EU think that the prospects of UK joining EFTA should be closely examined. Moreover, the Norwegian government should initiate talks with the UK regarding bilateral trade, the UK being the largest export market for Norwegian goods.

So as Brexit unfolds and you enter new trading arrangements, so too should we in Norway be entertaining new options.