Norway, EFTA and Brexit

 

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Is there a brighter future for Norway with the UK in EFTA?

Poor Norway. What has Norway ever done to anyone? To be the one country which is constantly drawn from the hat to be used as the canary in a coal mine for any country which dares to raise the proposition of leaving the EU? The greatest irony from all this is, Norway never has been a member of the European Economic Community (EEC), nor a member of the European Commission (EC), let alone ever having been a member of the European Union (EU)!

When someone mentions Brexit they immediately face the backlash of claims that the UK could not manage alone and it would end up in this imaginary European limbo. The example always offered is that of poor voiceless Norway, bereft of any MEP’s, a nation which has to endear to all of the demands from Brussels without any recourse. Therefore an independent UK will surely end up with these same constraints?  Right?

Poor little Norway. Well not so little geographically. Norway has an area size of 148,718 square miles*. The UK is 93,628 sq mi*. You do the math. That’s a disparity of 55,090 sq mi. In 2016 Norway has a population of 5,214,900* compared to the UK’s 2015 population of 64,716,000* giving a disparity of 59,501,100 citizens (with 55,090 fewer square miles).

Norway is also very different to the UK where the three-sector theory of economics is concerned. In the three-sector theory there is the primary sector which includes agriculture along with fishing, forestry and the extraction of raw materials. The secondary sector includes all forms of manufacturing and the tertiary sector includes those businesses that provide services.

The similarities are that both Norway and the UK have a strong primary sector. Norway’s could be said to be even stronger, rich in oil and petroleum, along with valuable mineral resources. Norway’s primary sector has a healthy productivity from agriculture, forestry, fishing and mining. In 1969 the Americans (Phillips Petroleum Company) struck oil and the Norwegians haven’t looked back since. Both Norway and the UK similarly have expanding tertiary sectors.

When we come to the secondary sector a far different picture appears. Even though the UK manufacturing sector has had its great share of problems and might be claimed to be past its peak, compared to Norway’s manufacturing sector it is a Colossus. It is this weak sector which hurts Norway and places it at such a disadvantage when dealing with the EU.

Norway, like the UK, in 1960 was a founding member of the European Free Trade Association (EFTA). The UK left EFTA in 1973 to join the European Economic Community (EEC). But Norway does not even deal with the EU under the terms of EFTA. Despite being an EFTA member Norway has to deal with the EU via the European Economic Area (EEA), established on 1st January 1994. Despite not being a member of the EU this has placed Norway in an unfortunate situation, effectively allowing itself to be bullied by the EU. By not having a strong enough manufacturing infrastructure and needing to import so many products from the EU, they can effectively dictate their terms upon Norway. Under the EEA, to gain access to the single market, Norway is required on the EU’s terms to accept all EU legislation, along with freedom of movement for people, goods, services and capital which effectively makes Norway a silent, ghost member of the EU and the Schengen Agreement without any redress or voice within the EU.

Even though Norway has to obey and accept all of this EU legislation, there are two sectors of the EU in which they have a marked advantage, even over the UK. Norway are neither a member of the Common Agricultural Policy (CAP) nor the Common Fisheries Policy (CFP) so, they are neither reliant upon meeting the requirements of the EU to receive CAP subsidies nor do they have to adhere to EU legislation for the CFP. This means that Norway, unlike the UK still hold sovereignty over their own waters and fish stocks. With Norway being so reliant upon the primary sector, even in the weakened state of being EEA members it could be claimed they are in a better position than which the UK now finds itself in.

Switzerland is hardly much better off than Norway where EEA rulings and EU legislation are concerned. The Swiss, like the Norwegians took part in negotiations on becoming members of the EEA in 1992. By the end of 1992 the Swiss had held a referendum and chose to reject EEA membership. Instead Switzerland chose to defend their rights and in 1994 the EU accepted terms to begin negotiations with the Swiss under bilateral agreement. For the Swiss this has been a slow, often painful and at many times disagreeable affair, constantly tackling bureaucratic red tape as the EU have tried to impose and implement their legislation upon the Swiss.

Is this the potential future for the UK if it chooses Brexit? So it would seem. If you listen to the EUrophiles, the UK only has two options. One is to be like Norway, leave the EU but still remain a part of the EEA, thereby electing to lose all MEP’s along with any say within the EU and Brussels, while at the same time being worse off having to accept the same EU legislation and terms as Norway. The second option is go down the long winded route which the Swiss have been forced to take. To try and take on the EU alone, in bilateral talks over many years hoping that we can acquire as many legislative concessions as the Swiss have done, while still having favourable access to the single market.

Whisper it quietly (the EUrophiles are going to hate this) but there is a third option. If the UK votes to leave the EU, it still has the safety in numbers route. If the UK rejoined EFTA it would embolden, bolster and strengthen the positions of the other members; Iceland, Liechtenstein, Norway and Switzerland. With the UK as a prominent member in EFTA this would ensure the EU had to enter into real bilateral negotiations with all the members. A reinvigorated and united EFTA would be able to renegotiate with the EU and gain far better terms with the single market, while still ensuring all EFTA members left the EEA without any recourse from the EU. A newly strengthened EFTA may give cause for other EU nations to reconsider their position within the EU. Denmark only joined the single market because the UK entered into it. If the UK left the EU for EFTA there is every chance the Danish themselves would be tempted into holding a referendum on leaving the EU.

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Is EFTA the UK’s future?

For those nations disenchanted and disenfranchised with the current model of the EU they have a third option if they so chose. The future for Norway, along with the UK’s and Switzerland’s future (including current and future members) is to hold bilateral talks as one, as EFTA with the EU. That way, EFTA members shall regain their voice in the world. If this is to happen, first of all on Thursday 23rd June the UK electorate will need to vote leave, they will need to vote for Brexit.

 

 

References

* Population and area figures obtained from Wikipedia.

 

 

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