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Brexit: What is the ‘Norway model’?

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Theresa MayGetty

LONDON — Theresa May will visit Norway on Tuesday to hold talks
with Norwegian Prime Minister Erna Solberg.

The two prime ministers are set to discuss a number of issues,
including the United Kingdom’s imminent departure from the
European Union, and the current state of Brexit
negotiations. 

In recent weeks, the suggestion that Britain should replicate
Norway’s relationship with the EU has resurfaced, with
Conservative MP Nick Boles calling for May to use the so-called
Norway model for Britain’s transition period.

Under Boles’ plan — which has been endorsed by MPs like ex-Home
Secretary Amber Rudd and influential Tory George Freeman — the UK
would copy Norway’s relationship with the EU for a few years
after Brexit before entering a new free trade agreement with
Brussels. Boles calls it “Norway for now.”

Boles believes that something like the Norway model will unlock
Brexit talks which have been at an impasse over the thorny issue
of the Northern Irish border for weeks. 

Here’s what the Norway model would actually mean in
practice. 

What is the Norway model?

So, the Norway model includes two key European organisations: The
European Free Trade Association (EFTA) and European Economic Area
(EEA). Norway, along with Lichtenstein and Iceland, is a member
of both.

EFTA is made up of the aforementioned three countries, plus
Switzerland. They trade between themselves while the group as a
whole has free trade deals with numerous non-EU countries,
Canada, Mexico and others.

The EEA, on the other hand, is a collaboration of all EU member
states plus three EFTA states: Norway, Lichtenstein, and Iceland.
All EEA members — including the EFTA countries — enjoy full
access to the European single market.

EEA membership is only available to either EU or EFTA member
states. So, under a Norway-style Brexit, Britain would leave
the EU, join EFTA, and then become the 31st full member of the
EEA.


David Davis Michel Barnier
Brexit Secretary David
Davis and the EU’s chief Brexit negotiator Michel
Barnier.

REUTERS/Francois
Lenoir


What are the pros of the Norway-style Brexit?

Being in EFTA-EEA would allow to the UK maintain full access to
the single market. This would mean no new non-tariff barriers,
and continued single market treatment for services, which account
for around 80% of the UK economy.

Most research suggests this would be the least damaging form of
Brexit. The government’s own impact
assessment found
 the Norway option would be the least
damaging option in terms of economic harm.

And although Britain would retain full single market access, it
wouldn’t be forced to sign up to some of the EU’s more
contentious policies. It wouldn’t be required to join the EU’s
Common Fisheries Policy, for example, which has long been a
bugbear for many Brexiteers. It would also be exempt from the
Common Agricultural Policy. The European Court of Justice,
reviled by most pro-Leave MPs, would have no jurisdiction over
Britain.

What about the cons?

Although Britain would finally be free of the ECJ, it would have
to answer to the EFTA court, which for most Brexiteers would
merely represent another set of unaccountable, interfering
foreign judges.

Then there’s the issue of Britain’s influence as an EFTA/EEA
country. Under the Norway model, Britain would have full access
to the single market but have much less say in shaping its rules
than it does now as an EU member.

“Pay with no say” is how critics of the Norway model describe
this. Norway does not formally participate in Brussels
decision-making but has incorporated around 75% of
EU law into its national legislation


Nick Boles
Nick Boles MP.
Grantham
Conservatives


What about immigration?

The elephant in the room here is immigration. The public’s desire
to control immigration was arguably the biggest driving force for
Brexit, and the UK government has vowed to end the free movement
of EU citizens. 

EEA members are required to accept the four freedoms, including
the free movement of people. Clearly, this would be politically
dangerous for any government, and for that reason is probably a
non-starter.

There is one way around that. It’s unrealistic — but
theoretically possible.

Article 112 of the EEA Agreement allows non-EU member states to
opt out of the four freedoms if they are facing serious economic,
societal or environmental strain. For example, Lichtenstein used
Article 112 to impose controls on the free movement of people,
due to concerns over whether a landlocked country of such modest
size and resources could cope with big influxes of people.
Obviously, Britain is very different from Lichtenstein, and would
likely have a much tougher time arguing for an immigration
opt-out. 


Brexit protestREUTERS/Russell Cheyne

What would it mean for the Irish border?

Perhaps the strongest case for a Norway-style Brexit is that it
would go some way to resolving the Irish border dilemma. Boles
argues that Britain could remain in a Norway-like state until a
new UK-EU free trade agreement which covers the Irish border is
ready, making it a replacement for the controversial
backstop. 

By remaining fully aligned with EU market rules, Britain would
avoid a plethora of non-tariff barriers which would otherwise
emerge between Northern Ireland and the Republic. 

However, a Norway-style relationship wouldn’t provide the whole
solution avoiding physical infrastructure on the island of
Ireland. In order to also eliminate tariff barriers, Britain
would need to be in either the current or a new customs union
with the EU after Brexit. Norway is not in a customs union with
the EU. 


Michel Barnier Leo Varadkar
Michel Barnier, the
European Union’s chief Brexit negotiator, and Ireland’s Taoiseach
Leo Varadkar attend an all All-Island Civic Dialogue on Brexit in
Dundalk, Ireland, April 30, 2018.

REUTERS/Clodagh Kilcoyne

So how likely is a Norway-style Brexit?

Earlier this year, the Brexit committee led by Labour’s Hilary
Benn published a
report
 calling for May to use the Norway option has her
official backup if she fails to meet key negotiating goals in
Brexit talks with the EU. 

The idea has gathered momentum in recent weeks as MPs look for
ways of unlocking Brexit talks and avoiding a dreaded no deal
scenario. The EU has always said the Norway option is available
to the UK. 

However, there are some practical problems. 

Firstly, although EFTA/EEA countries are generally open to the idea
of Britain becoming a permanent member of the club, whether
they’d accept temporary membership is a different question. Even
if they were, it could take up to twelve months for Britain to
complete the joining process, while exit day is just five months
away at the time of writing.

On top of that is the issue of customs. For a Norway-style model
to solve the Irish border problem, it would need to come with a
customs union add-on. However, EFTA countries have together
signed trade deals with other countries which include customs
arrangements. The UK would need to sign up to those, making a
customs arrangement with the EU very difficult if not impossible.

Then we have the question of Westminster politics. Would May be
able to sell continued acceptance of EU rules and the free
movement of MPs to pro-Brexit MPs? Right now, it’s highly
unlikely. 

 

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