Richard North, 04/01/2018  

The UK's EEA membership got some interesting coverage from two separate sources yesterday, firstly with an article from Stephen Kinnock and then in an essay from George Yarrow.

Kinnock has, perhaps, produced his best arguments yet for the UK adopting the Efta/EEA option as the basis for Brexit while Yarrow is essentially repeating his argument that the UK can remain in the EEA after leaving the EU without necessarily having to rejoin Efta.

Both efforts have their merits and Kinnock is perhaps the only politician who has displayed any real understanding of the Article 112 process and how it can be harnessed to produce a longer-term solution to the freedom of movement issue.

Despite this, though, I feel the efforts are largely wasted – as are the efforts of latter-day converts whose new-found enthusiasm is not matched by any deeply-rooted understanding of how continued EEA participation could fit into a rational Brexit.

The biggest problem, if not entirely of my own making, is one to which I have certainly added: the characterisation of the EEA Agreement as an off-the-shelf solution, making it that much simpler to fit into an exit plan within the limitations imposed by the Article 50 process.

If I had my time over again, from the very start of my writing about this issue, I would have made two crucial changes. Firstly, I would never have used the term "Norway option" and would have instead called it the Efta/EEA option.

Secondly, I would have stressed that, for Efta states, the EEA Agreement is very much a bespoke option. The settlement for Norway is different from that of Iceland which is different in material aspects from the way the treaty applies to Liechtenstein.

It took me a long time to realise this and to begin to understand its unique structure, with the core agreement, the 49 Protocols, the 22 Annexes and the 39 Declarations, the combination of which made for a remarkably flexible instrument.

This great advantage, however, is also an important handicap. To tailor the Agreement to UK requirements - and thus to make it suitable as a short- to medium-term interim solution – would take an amount of time, and almost certainly more than we have left at the moment.

How we would go about securing a bespoke agreement within the framework of the EEA I set out in August 2016, pointing to the EEA Joint Committee as the main body with which we would have to work.

But, before that, we would have to get agreement in principle from Efta members that we would be able to rejoin the association the moment we left the EU, our new membership coinciding precisely with Brexit, to ensure continuity with the EEA and thereby to avoid problems of the sort that might arise if there was a break.

As current members of the EEA and therefore with the rights and obligations that go with the status, we would have needed to approach the Joint Committee and set out a schedule for informal negotiations which, once we had left the EU, could be translated into formal (EEA) treaty changes, via the Protocols and Annexes, which would then determine our trading relationship with the Single Market.

Such is the flexibility of the EEA Agreement that this could include provisions on agriculture and commercial fishing, which would give us some sort of continuity on the CFP and the CAP. In effect, we could build in versions of these policies within EEA Protocols.

Then, also, there would have been the Article 112 arrangements, which Stephen Kinnock so ably describes, and other matters such as MRAs on conformity assessment, and a comprehensive customs cooperation agreement. Special arrangements for the Irish border could also be defined within the framework of the EEA Agreement.

Ideally, the bulk of the discussions dealing with such issues should have been completed before making the Article 50 notification, thus to enable us to present the EU negotiators with a clear roadmap which would in turn define the scope of the Article 50 negotiations.

Although we are nine months into the Article 50 negotiations, clearly nothing of this has been done. And it takes little imagination to realise that to bring the current proceedings to a halt, to commence talks with Efta and then to define discussion parameters for the Joint Committee, would take considerably longer than the notional nine months we have left to conclude an Article 50 agreement.

The even greater hurdle, though, is our own government. Within the Cabinet, there is neither the political will nor the understanding of the EEA systems and procedures for a successful deployment of the Efta/EEA option. For Mrs May do go down that route would require a major policy change which, itself, would take time to secure.

The bottom line is that, if the Efta/EEA option was to work, it had to be adopted within days of the referendum and put into action within weeks, leaving the Article 50 notification for as long as possible, to give us a head start on modifications to the EEA agreement.

Moreover, it was always the case that the option would require the unanimous agreement of the Efta states, any one of which could veto our rejoining Efta. For us now to approach Efta, seeking membership as an obvious second choice, is hardly to engender enthusiasm in the members. A refusal could be a very real possibility.

Thus, while the case of the Efta/EEA option is every bit as good as it was when it was first floated, it is no longer a practical option. The only way it could be made so is for Mrs May to apply for a time extension under Article 50. There is no sign of her doing this and there is probably even less likelihood of the EU members agreeing to it.

Sadly, the option isn't even Labour Party policy. While Mr Kinnock has been resolute in pursuit of the idea, Corbyn and Starmer are all over the place and have never committed to continued EEA membership. And then, of course, if Labour did adopt the policy, the Tories might reject it on those very grounds.

And while Professor Yarrow maintains his position that we could stay in the EEA without having to go through the uncertainty of applying to rejoin Efta, the UK government is adamant that we will be leaving the EEA, even if its presumption of automatic termination of the treaty, to coincide with us leaving the EU, is more than a little suspect.

Nevertheless, I do stand by my earlier piece, which argued that the Efta/EEA option was an opportunity lost. The EU is more or less committed to its "vassal state" transition and, unless the political temperature increases significantly, it looks as if Mrs May will "swallow it whole".

That then leaves us 21 months from the end of March next year, when the nation might start to get to grips with the implications of dropping out of the Single Market to assume third country status.

Once it is realised that the limited market access gained through a free trade agreement is only marginally better than the WTO option, there may be renewed interest in the EEA. But, by then, it will be too late. We will have left and rejoining is much harder than staying in.

We had an inkling then that we were in dire trouble. But the further we get from the Lancaster House Speech the more apparent it becomes that it was a disaster in waiting.

The Single Market was the first and most obvious casualty, but there was always hope that the situation could be reversed. But, as Brexit in name only beckons, no longer do I see this as a sensible expectation. It was good while it lasted.

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