LeaveHQ, 31/03/2016  
 


A relationship with the EU based on membership of EFTA and the EEA is referred to as the “Norway Option” because it forms the foundation of Norway’s European policy. It is however misleading in many ways to call it the “Norway option” as we are not actually looking to emulate Norway per se (an impossibility anyway given our very different circumstances), but to use it as an “off the shelf” model to create our own relationship and protect our Single Market access.

Regarding the EEA Agreement, Britain is already a contracting party, so the technical measures are already in place. But, as the EEA Agreement is an agreement between EU and EFTA members, outside the EU, membership of the European Free Trade Association (EFTA) will be necessary.

There is then the unresolved question of whether Britain, on leaving the EU would automatically cease to become party to the Agreement and would have to re-apply. This is not clear as the text of the Agreement does not specifically exclude continued membership, possibly because, prior to the Lisbon Treaty, there was no provision for any member to leave the EU. When we asked the EFTA secretariat for their views on this, they told us there was no definitive answer. They suggested that political discussions with all parties concerned would be needed to resolve the issue.

There is a possibility also that an EFTA member could veto British accession, blocking the direct participation in the EEA. So despite positive sounds from some quarters, this cannot be taken fro granted, which is why we discuss alternatives in our plan.

Membership of EFTA would be beneficial as the UK would gain access to established Free Trade Agreements and ready-made consultative arrangements. An EFTA with the UK would be a significant global player; as a trading group it would be fourth in the world league:

EEA Costs

EEA membership includes a range of financial contributions. Included within these are the “Norway Grants”, paid by Norway as a form of aid for the economic rehabilitation of post-Communist countries, these voluntary grants amounted to around €804 million in the period 2009 -2014. This money is not paid to the EU.

Norway also provides 95% of the funding to the EEA Grants, which alongside the Norway Grants brings the total to €1.8 billion from 2009-2014. The total spend for EU programmes with EFTA/EEA participation over the 2007-2013 period amounted to €70 billion, with the contribution of EFTA amounting to €1.7 billion (approximately €250 million a year, of which Norway accounted for 95.77% of the cost.

As of 2014 Norway participates in twelve EU programmes, including Horizon 2020 Erasmus+ and the Copernicus Programme. It also takes part in 26 EU agencies. It is highly likely that the UK would wish to continue its participation in many of the same programmes and agencies beyond the length of its current obligations (which would continue after secession).

Funding is not however one way. Over the last financial period Norwegian beneficiaries were paid €1.01 billion from EU funds, making the net contribution over the seven-year period €620 million, approximately a €90 million net contribution per year. If this was applied to the UK on a pro-rata basis as part of the EFTA/EEA arrangement, it would contribute approximately €2.5 billion annually, 70% of which is accounted for by the EU’s research programme.

According to the latest figures, EFTA budgetary costs in 2016 will run to 21 677 000 Swiss Francs (approximately £15.5 million). Norway’s 54.68% share of that contribution amounts to approximately £7 million. This could be said to be, in-effect, the cost of access to the Single Market, which would cost (on a pro-rata basis) the UK less than €200 million per annum if we left the EU, joined EFTA and traded with the EU via the EEA.

So yes, membership of the European Economic Area does involve costs, we would “still pay”, but the Remain campaign is disengenous when they say this, because we would pay significantly less than we do now. 

Why opt for an “off the shelf solution”?

So why should we opt for this “off the shelf” market solution? Despite the popular myth, there is no requirement for the EU to conclude a free trade agreement with seceding members by the end of the two year stipulated negotiating period. Any attempt to negotiate a “bespoke” trade agreement with the EU would be a slow and painstaking process which would likely take a minimum of four years to five years.

Once you start to quibble and unpick arrangements, they unravel, Pandora’s box opens and it takes years of negotiations to deal with it in a manner that satisfies both sides. Those who assert that Britain can conclude her own unique trade agreement with the EU in two years, before treaties are void and we drop out of the EU like a rock plunging into deep water, are, quite frankly, talking nonsense based on myth, over simplification and a total overstatement of the cards we hold at the table.  Switzerland is often cited as a model to follow, yet it is not taken into consideration that it took 16 years in all to negotiate the current relationship.

The market solution protects the British economy and de-risks Brexit, thereby neutralising the main arguments of the Remain side and giving us the best chance of winning the referendum. Although we believe that membership of EFTA/EEA is preferable to being a provincial EU state, we acknowledge it is sub-optimal compared to the great potential for reform that Brexit gives us and thus is merely the foundation on which we build our future relationship with the EU.

To win the referendum we must express a positive vision and have the ability to promote the high ideals of self-determination and the restoration of democracy without such arguments being smeared with the Europhile fear, uncertainty and doubt. If we do not neutralise the fearmongering, which Remain will build their campaign on in order to avoid engaging on issues of principle, we will not win.

This is because of the unavoidable fact that their fear mongering is not entirely baseless. The economic consequences of a badly executed secession are potentially calamitous. Export of goods and services is about 32 percent of the UK economy (GDP) with imports accounting for 34%, of which the 27 other EU member states account for approximately half.  Trade with Europe is hugely important to the British economy, thus unnecessary disruption is a serious risk and risks causing a recession.

It is most encouraging that the EFTA/EEA option is attractive to the public. The Bruges Group carried a Survation poll which showed a clear majority of 71% expressing their preference for membership of EFTA. There are significant benefits to our continued participation in the Single Market; it would give the UK tariff free access to the marketplace.

 

 







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