LeaveHQ, 02/09/2016  
 




Much of the speculation around what Britain should attempt to negotiate centres around what Britain shouldn't do rather than what it should. On the one hand we have John Mills of Labour Leave, absolutely adamant that the suicidal WTO option is a possibility and on the other we have Andrew Tyrie in an Open Europe report ruling out all of the options including the EEA.

"The UK need not replicate the arrangements of other countries" he asserts. It "will want more market access than Canada, whose trade deal with the EU contains only limited provisions on services, and more control and influence than Norway, which is a passive recipient of single market regulation."

This is cake and eat it stuff. Tyrie recognises the failings of the WTO option and that it should be avoided at all costs. The basis for this is that the WTO option says nothing of recognition of standards along with all the other issues surrounding non-tariff barriers. He recognises that a Canada deal is insufficient and so he leans toward a comprehensive and close relationship with the EU.

It appears he wants the same level of participation as Norway but a direct say over the rules. Some might say that is EU membership. However this blog would challenge the assertion that Norway is "a passive recipient of single market regulation". It isn't. As much as there is direct consultation and a veto mechanism within the agreement, Norway gets an enhanced say in the rules by way of being full participants in the global bodies where the rules are made. Tyrie make no real mention of this. He is merely repeating empty mantras.

This though is a common view and an enraged Tweeter informs us that "Britain does not need or want prior agreements. We can make our own agreement, not cobble together someone else's". Indeed we can make our own agreement but if we want to negotiate something as comprehensive as the EEA then we are looking at six to eight years of negotiation. Tyrie remarks that his fantasy scenario will indeed take more than two years and believes that some unspecified "transitional arrangement" will fill the void. There are no details as to what this looks like.

What critics of the EEA miss is that the EEA agreement is not just an agreement on single market participation. It is an interface mechanism with its own infrastructure for constant review and reform for the purposes of entering special conditions, exemptions and reservations. And so though we may be adopting an agreement that someone else has, there are mechanisms to tailor the agreement to the needs of the UK, be that enhanced controls over freedom of movement or better consultation on regulations.

Because it is a system of continuous development, including efforts to extend financial services access it is not set in stone. Far from cobbling together a copy of the Norway agreement we would simply be using the same conduits into the EU. The purpose of joining it is that as an agreement to which we are already a party, we would simply be switching sides, the groundwork for which we could do before even triggering Article 50 which means part of the process can be under way without having to negotiate and extension. We can have concurrent negotiations.

Once we have transitioned into EEA status we then use the mechanisms and processes to further negotiate our exit issue by issue, leaving things that work untouched. We then have no need of bespoke transitional agreements because the EEA very much is a bespoke transitional agreement with a view to eventually leaving the single market to participate in the global rules based system as it develops.

Opponents of the EEA really need to explain what the point of reinventing the wheel is. Why should we create unnecessary uncertainty to achieve much the same as what already exists? Moreover, the EU is not especially keen on a patchwork of agreements like Switzerland which need constant unstructured attention where neither side is happy with it. If it doesn't want that then why would it want to replicate an EEA style agreement solely for the benefit of the UK when it already has an interface mechanism for non-EU market participants?

More to the point, why add the complication to something which need not be complex? Effectively the EEA serves as a Brexit safe space with no cliff edges where the process of exit happens at a pace that doesn't disturb business.

What Tyrie is doing is closing down the debate, rubbishing entirely viable options in favour of a lengthy and risky process for no real advantage. You could point out the numerous deficiencies in the EEA agreement where Norway suffers, but the obvious point is that we are not Norway. We have market clout and we have world leading industries which means we have a strong hand when we seek new annexes to the agreement.

Moreover there is a structured means of reviewing the EEA agreement. Entering some custom final agreement means we have to persuade the EU to open it up for review in the future. The EEA already has review systems in place so we can revisit things we get wrong.

As to immigration, the EEA does have safeguard measures on freedom of movement and we can leverage them into a more formal quota system within the EEA framework. That would be a strong start to immigration reform. This would be sufficient if we use the opportunity to also tackle non-EU immigration issues. We will still need a fairly high turnover of EU people and we do not want to close down opportunities for UK citizens living in the EU. One thing the UK does not want to do is cut its nose off to spite its face. Full control is neither necessary or desirable and the advantages are slender.

There is every reason to believe the EU would be amenable to EEA membership. Firstly a messy Brexit is damaging to the EU economy as a whole. Secondly, as discussed, a bespoke system is time consuming and will require ongoing use of diplomatic runtime for the next decade. Using that which is already in place requires only a marginal increase in resource. The alternatives to the EU require a gargantuan commitment of intellectual resources right about the time the EU needs to be directing its trade expertise elsewhere. Not least with the alleged imminent failure of TTIP and CETA.

The EU can either concede on Freedom of Movement for the sake of a cost effective Brexit or we can create risks and complications that serve nobody. There is no reason why we should accept freedom of movement as an EU red line since every other member wants similar concessions and at some point in the future the EU, if it wants to survive, it will have to bend to this dynamic. Nobody is happy with freedom of movement as it stands and a refusal to reform it is more likely to see others moving toward exit than any special concession for the UK.

When looking at the available options it would appear that the EEA is the instrument most people can live with. Scotland will want full single market participation and so will the forty eight per cent of the UK who voted to remain. There simply isn't a large enough majority for the hardline Brexit proposed by eurosceptic Tories. It would not bring the benefits they believe it does and a hard Brexit would be considered one of the greatest unforced political errors of all time. By the same token, attempting a bespoke agreement would be considered a curiously pointless waste of energy.

From the beginning The Leave Alliance has maintained that Brexit is a process, not an event. The EEA is far from ideal but in the very first instance it does return control over some crucial areas of policy which gives us enough to be getting on with. The structure of the agreement means that we can revisit the process at our leisure and provides the least disruption for the EU and the UK which is ultimately what the markets want too. There is no value in attempting to appease the unappeasable by pursuing a hard Brexit because it will not deliver in its promises. Tory fantasies of "free trade" are for the birds. Nowhere in the real world does this exist.

It is to our great bemusement that there is such an irrational phobia of the EEA. It is is the most pragmatic, most flexible means of leaving the EU and it is not set in stone even after the fact. The often repeated canard that Norway has no influence is demonstrably untrue, as is the assertion that the EEA means accepting full EU freedom of movement. It is our view that those who persist in repeating these mantras do so for less than honest reasons.




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