Comment: Cameron’s staff explored ‘Norway’ option for ‘Brexit’ (update*)

Author: Matthew Newman
8 Mar 16 | 16:59 GMT

IN BRIEF
A member of David Cameron’s staff met with officials from a trade association of four non-EU states to discuss the legal implications of membership of the group that would give Britain access to the European single market after leaving the bloc, MLex has learned. The UK prime minister has since suggested that the “Norway option” — outside of the EU but inside the European Free Trade Association — wouldn’t work for Britain.

A member of David Cameron’s staff met with officials from a trade association of four non-EU states to discuss the legal implications of membership of the group that would give Britain access to the European single market after leaving the bloc, MLex has learned.

The UK prime minister has since suggested that the “Norway option” — outside of the EU but inside the European Free Trade Association — wouldn’t work for Britain.
 
Mats Persson, a special adviser to Cameron on European affairs, sought details on how the UK could join Norway, Switzerland, Iceland and Liechtenstein in the EFTA bloc. The meeting was held at the prime minister’s residence at 10 Downing Street, it is understood.

The briefing took place as Cameron was weighing different options on what could happen if British voters decide in a referendum to leave the EU. Following an agreement with the 27 other EU members last month on certain curbs on welfare rights and an exemption from the EU’s goal of “ever closer union,” Cameron called an in-out referendum for June 23.

During the November gathering, legal staff from EFTA didn’t express an opinion on whether Britain should leave the EU or remain. The gathering was meant to answer legal questions about membership.

“We don’t comment on private conversations, but the government clearly believes that membership of a reformed EU is in our national interest and is not looking to join EFTA,” a Downing Street spokesperson said.
 
“As our analysis showed last week, none of the alternatives to EU membership come close to providing the same balance of advantages and influence that we get from the UK’s current status inside the EU.”

— Access but constraints —

Although joining EFTA would give the UK access to the EU’s single market of some 500 million consumers, it would involve serious constraints, notably on having a say in shaping EU rules.

To join EFTA, the UK would also have to join the European Economic Area, an agreement between three of the EFTA countries — excluding Switzerland — and today’s 28 EU member states. The UK would enjoy the benefits of the EU free-movement rules covering goods and services, and wouldn’t be bound to other legislation covering agricultural, fisheries, judicial affairs and foreign policy.

But membership in the EEA has a major downside. Norway, Iceland and Liechtenstein are obliged to adopt EU rules, but they have no say in the legislative process. The UK would be in the same position.

In a November speech, Cameron recognized this problem.

“Norway is part of the single market but has no say in setting its rules. It just has to implement its directives,” he said. “The irony is that if we followed the model of Norway, Europe’s political interference in our country could actually grow, rather than shrink.”

— Veto powers? —

Officials from the EFTA Surveillance Authority — which oversees its members’ compliance with the EEA agreement — also met with members of the UK’s House of Commons, it is understood. British politicians asked the officials about the three countries’ veto powers over adopting EU legislation, it is understood.

While the power theoretically exists, it has never been used. The countries have very little margin of maneuver when the European Commission insists that they toe the legislative line and adopt EU rules word for word.

EFTA members can ask for special “adaptations,” such as a deadline extension for adopting new EU legislation. These requests don’t touch on the substance of the rules.

This democratic deficit may have convinced Cameron that the Norway option isn’t viable. UK officials were aware of a 2012 assessment by Norway on its membership in the EEA Agreement. The report, called “Outside and Inside: Norway’s Agreements with the EU,” discussed the lack of democracy.

“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,” the report said.

A major hurdle in joining EFTA is that the existing members of the trade association — as well as the remaining EU countries — would have to accept Britain into the club. It’s unclear whether four relatively small countries would want to have a much larger and influential member join the group.

The irony of the UK considering joining EFTA is that the country was the driving force behind the creation of the association in 1960. It then immediately applied to join what was then the six-member European Economic Community.

France vetoed UK membership twice in the 1960s. The UK then successfully negotiated membership to EEC and left EFTA in 1973.


*Updated on March 8, 2016, at GMT 17:15: Adds Downing Street statement