Whatever happened to the Norway option?

Polls show, given another referendum, more people would opt to remain than to leave the European Union (EU). But we have left the EU and cannot undo Brexit for the moment. Nevertheless, we have not left the single market and could have the option to stay – the Norway option. The Vote Leave government does not like this option, yet the people do not like this Vote Leave government and Cummings has gone.

The European Free Trade Association (EFTA) was founded by the UK and six other states in 1960 partly for free trade amongst member states but also to trade with the six countries of the European Economic Community (which would later become the European Union (EU)).

Original members Norway and Switzerland, along with new members Iceland and Lichtenstein are now the only EFTA members. The others joined the EEC / EU.  

When the UK left the EU in January 2020, it did not revert or plan to revert to the previously existing situation (status quo ante) in 1972. This would have meant re-joining EFTA. Instead it reverted to 1960.

Often called the Norway option for Brexit, EFTA is only a part of it as Norway is also a member of the European Economic Area (EEA). All EU member states and EFTA members other than Switzerland, which has its own agreement, are EEA members. The EEA extends the EU’s internal market, but not the customs union, to EFTA members that sign up.

During the 2016 Brexit referendum there was much talk of the Norway option, though little understanding by the general public of what this (or anything else) meant, due to lack of information.

At the current point in time (November 2020) the UK has not signed a deal with the EU but in October the UK and the EFTA states signed a temporary trade deal beginning 1 January 2021. But should EFTA membership and EEA membership be considered by the UK as an alternative to the UK-EU deal being negotiated?  

Various studies have shown that from the EU’s perspective, ‘the EEA is the most preferred model’ of association for third countries.

However: “The most problematic aspect of Norway’s form of association with the EU is the fact that Norway is in practice bound to adopt EU policies and rules on a broad range of issues without being a member and without voting rights … This raises democratic problems.”

The EFTA countries might not want a much larger country joining them, but it would give EFTA more power to alter any democratic problems by gaining a bigger say and more economic weight. It might also protect us to some extent from the democratic rights erosion by Boris Johnson’s government. Cummings might be going but Johnson is the person responsible for the current political situation no matter how hard he might look for scapegoats.

And EFTA would keep our trade flowing more easily with the EU whilst allowing us to keep our own trade deals made with other countries. We would also be out of the Common Fisheries Policy of the EU, which seems to matter so much to some.

On Saturday Hilary Benn, Chair of the Committee on the Future Relationship with the European Union tweeted that:

“This is the first trade negotiation in British history in which the Government has gone into the talks knowing that it will come out with worse terms than what we have at the moment.

“Firms know this. Week after week our select committee has heard how business will be made more costly.”

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Below is a section from the EFTA website’s Q and A page on Brexit:

If the UK were to apply to join EFTA, how would the EFTA States respond?

The UK government has clearly indicated that it does not intend to apply for membership of EFTA. However, if the UK were to seek to re-join EFTA, EFTA Member States would carefully examine the application. A request for membership of EFTA would be considered by the EFTA Council,  where decisions are taken by consensus. It is not timely to prejudge what the outcome would be as EFTA remains open to examining all options to safeguard the interests of its Member States.

If the United Kingdom were to re-join EFTA, would it automatically become party to the EEA Agreement?

Not automatically, as each EFTA State decides on its own whether it applies to be party to the EEA Agreement or not. According to Article 128 of the EEA Agreement, “any European State becoming a member of the Community shall, and the Swiss Confederation or any European State becoming a member of EFTA may, apply to become a party to this Agreement. It shall address its application to the EEA Council.” The EEA Council takes political decisions leading to the amendment of the EEA Agreement, including the possible enlargement of the EEA. Decisions by the EEA Council are taken by consensus between all EU Member States on the one hand and the three EEA EFTA States – Iceland, Liechtenstein and Norway – on the other.

If the United Kingdom were to re-join EFTA, would it also become party to EFTA’s worldwide free trade agreements?

Any State that becomes a member of EFTA has an obligation to apply to become a party to EFTA’s existing free trade agreements according to Article 56 of the EFTA Convention. The accession of a new Member State to our FTAs can only be negotiated with the consent of the other Party or Parties to the agreement. All of our FTAs include provisions that regulate the accession to the FTA in question, stipulating that terms and conditions have to be agreed upon by the acceding Party and all existing Parties to the FTA.

If the United Kingdom were to re-join EFTA, how would it affect:

Fisheries –The EFTA Convention guarantees free trade in fish and other maritime products between the Member States. A UK membership would therefore mean better market access in the UK for these products than the current EFTA States have today.

Agriculture – When it comes to agriculture, the EFTA Convention has specific commitments for market access in agriculture for each Member State. These would have to be negotiated for any new member state as part of the accession process.

Migration –The EFTA Convention guarantees the free movement of people between the Member States. This would also apply between the UK and the current EFTA States in the event of a UK membership in EFTA.