LeaveHQ,
24/08/2017
It's not often you come across a fair minded evaluation of the Norway option. This post
by Nick Sitter and Ulf Sverdrup is one of the better efforts we've
seen. Read it! It points to how the EEA agreement is more of a system
than a trade deal and is configurable. As a basis for a new relationship
with the EU, it's a no-brainer.
The authors have it that the EEA deal allowed Norway to maintain formal
sovereignty while delegating actual
sovereignty. We think that is perhaps a clumsy assessment in that they
outline the many mechanisms by which the institutions of the agreement
serve as a firewall where the adoption of rules is a matter of process
and negotiation. But they are broadly correct in that the emphasis on
formal sovereignty is there - which is exactly what we want from Brexit -
the end of political union, while maintaining a framework for ongoing
cooperation.
What is refreshing about their assessment is that it recognises the
limitations of the arrangement without making a fuss about it. They
argue that there is a need for a non-EU state to establish clear
priorities and to pick
its fights intelligently. "A non-member can have an impact in a
policy area if it prioritizes, and explains its domestic constraints.
But going for the ‘select all’ option on the conflict menu is not wise.
Norway has managed to keep fisheries, agriculture as well as oil and gas
out of the EEA. The UK government is well advised to decide – and to
signal clearly and openly – what its real red lines are".
Quite! What piques our interest, though, is the final
lesson offered.
The final lesson concerns life outside the EU. Non-members are in effect
relegated to the role of a lobbyist – albeit sometimes very important
lobbyists. This is a new role, in which expertise, policy competence and
the wisdom to gather information, advocate solutions, and intervene at
the right time counts for more than formal power. As a lobbyist on the
outside, the UK will compete with many governments, organizations and
firms. Norway’s experience shows that outsiders can have influence on
the EU system, particularly in policy sectors where it is a ‘super
power’ – such as oil and gas, but most often such influence depends on
successfully aligning with the interests of key member states, and
arguing in line with what is best for Europe and the EU, not on the need
for special exceptions.
This is absolutely critical to the whole Brexit argument. We are
repeatedly told that Norway has no say in the rules. A tiresome canard
we are so very tired of debunking. The Norway experience shows that when
they pick their battles well, enlisting support from other non-EU
members it is able to obtain substantial concessions and pressure the EU
to revise its policy even internally.
To say that the UK would be a "lobbyist" is a fair assessment but we would go one further and say that the UK would be an active and powerful
one. Assuming we can successfully conclude Brexit with an EEA
agreement, or something of its type, then the UK does not become a
down-and-out charity case. It has a means of coordinating a high level
of cooperation while being a free agent on all of the many global forums,
capable of acting in the direct national interest without subordination
to Brussels. We would still enjoy more economic clout than most EU
members, and we should not forget that even as a member of the EU we are
a lobbyist and we don't call the shots.
A key thing to note however, is that the authors state that as a
lobbyist "the UK will compete with many governments, organizations and
firms". The latter is a seriously important observation because it gives
us an insight into the bigger games in play. The nexus of power in
world and regulatory affairs is a multifaceted, multi-forum exchange
where coalitions of big business, unions, NGOs and nation states broker
agreements, regulations and standards. The EU is far from being the "top
table".
Ditching the parochialism of EU politics, we must turn to the more interesting news
from last year, regarding the formation of a new international
public-private sector coalition, the Global Alliance for Trade, an
alliance designed to streamline border management in developing
countries associated with implementation of the new WTO Trade
Facilitation Agreement (TFA).
The new alliance was announced at the 10th WTO Ministerial Conference in
Nairobi, Kenya and consists of governments, international companies
such as Maersk Group, DHL and Wal-Mart, and the International Chamber of
Commerce and the World Economic Forum. The objective of the Global
Alliance for Trade is to accelerate trade facilitation reforms by
supporting swift and wide implementation of the WTO Trade Facilitation Agreement (TFA).
Today, customs processes can involve large amounts of documentation that
typically are not digitalised. This and lack of coordination between
private and government actors adds unnecessary waiting time and delays
to traded goods, resulting in added inventory costs and the risks of
penalties for importers and exporters. Reforms aiming at reducing
transit time of goods across borders can increase trade flows
significantly and thus drive growth and job creation in low- and
middle-income countries. The WTO estimates that a full implementation of
the TFA can add $1 trillion to the global GDP annually and 21 million
new jobs globally.
A successful implementation will therefore benefit all countries
involved, as well as importers and exporters. The first step for the
Global Alliance for Trade Facilitation is to diagnose the largest trade
barriers in specific countries. A new player on the scale of the Global
Alliance for Trade should actually be major news. News of it came to us
not via the BBC but from Maersk's own Twitter feed. That speaks to the
irrelevance of the media.
It is not yet clear just how influential this alliance will be but in
the past, WTO alliances have helped shape global regulations that even
the EU has adopted. It will likely have a much greater consultative
input than the EU in opening up new markets - and when it comes to the
defining international agreements, it will sit alongside the EU as a
power in it's own right.
This is another marker in the timeline of global trade whereby the big
deals are no longer between nations and blocs but between non state
actors and regulatory agencies. This is very much the birth of a global
single market.
In addition to Myanmar, Norway, Vietnam, Brunei, Zambia and Ukraine, the
following WTO members have also accepted the TFA: Hong Kong China,
Singapore, the United States, Mauritius, Malaysia, Japan, Australia,
Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger,
Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New
Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia and Kenya.
This is a forum where nation can speak unto nation in bringing down
barriers to trade. Unless of course you happen to be an EU member, where
instead we have to go off to Brussels and ask nicely if they would
consider raising our concerns on our behalf.
Just imagine that - a global forum on trade where little old Norway can
have an independent vote, yet the UK, the fifth largest economy cannot.
This is the real top table - this is the real engine of global trade.
This is real global engagement. From this will flow new agreements to
adopt new regulations.
The notion that we would be isolated outside the EU ignores the fact
that nobody is isolated - and nations are free to pick and choose
alliances and coalitions according to what suits their most pressing
trade concerns. There are any number of configurations that can rival
the EU as a power - and even the threat of voting against the EU (when we
have our own vote) would be leverage we do not presently have as members.
As members we can be summarily overruled - and we are forced to adopt
the common EU position.
Very often that common position is less to do with doing what is best
for global trade than it is protecting the EU's internal economy. Far
from engaging with the world, the EU is putting up more barriers and
acting on the global stage with a view to asserting its own presence
rather than working in the spirit of cooperation.
In fact, the EU is often criticised by global regulatory agencies and
trade alliances for gold plating regulations specifically to create
further barriers and tilt the playing field in its own favour. It stands
in the way of better regulation and creates administrative burdens
where none previously existed. As it seeks to usurp its own member
states, critical regional expertise is muscled out, depriving the global
community of valued input.
As we continuously point out, there is a whole universe of trade
and governance over and above the EU and the myopic fixation we have
with little Europe is damaging our global standing as well as holding
back global progress. It's time to cut the apron strings and step out
into the new world. The EU will still be our ally and friend, but we
cannot allow it to be our master. The world has moved on and the future
is different to the one they imagined.
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