BEFTA – The Future of EFTA and the UK

In the run up to the EU referendum on Thursday 23rd June we are constantly hearing from the mainstream media what is the alternative if the UK votes to leave the EU? What comes next? What are the fiscal and diplomatic plans when dealing with the EU afterwards? Examples the media are currently trotting out for the UK to follow range from those ineffective models from European countries like Norway or Iceland, or cumbersome and complex bilateral talks with the EU similar in ways to which Switzerland and Canada have or, do you wait and see and go with the current status-quo?

None of these models are particularly appealing that’s for sure. But for many in the UK remaining in the EU is simply not an option. Since the Maastricht Treaty of 1992 the EU has become an entirely different entity to which the UK and many other nations entered in to. With an unelected European Commission having the sole power to propose, repeal or amend EU legislation; with an EU demanding payments of vast sums of monies from members and non-members at will, combined with the ever present desire to eventually form a one nation federal Europe leaves many nations on the fringes of the EU feeling disenchanted and disenfranchised. The handling of some nations tied up within the Eurozone by the European Central Bank only adds further weight to many nations to reconsider or regret the option of choosing the Euro.

As often happens in most areas of life, organisations which become too large, too bureaucratic fall in to the trap of either believing they are so powerful that they no longer need to account for themselves or, they become slothful and no longer care any more about paying regard to the wants, needs and requirements of others. The EU is not a recumbent behemoth that’s going to slow down any time soon. It seems the only way to ensure the EU listens to the requirements of the disenchanted nations of Europe is to ensure that there is another organisation within Europe capable of enacting checks and balances upon the EU and the European Commission. Ultimately, this will even prove to be beneficial to the EU and those who desire a one nation federal Europe.

French President Charles de Gaulle always accused Britain of being a Trojan horse. At every opportunity he vetoed the UK’s entry into the Common Market. Charles de Gaulle envisaged a day when Britain would bring about the demise of what has gone on to become the EU. This is the EU’s bête noire, the EU desires, demands even, closer ties and closer unity with all member states fiscally, legislatively, economically, politically and socially but it faces one big stumbling block, the electorate of certain nations. Not including the UK in recent years legislation has been vetoed in referendums held by the Swiss, Danish and several others. They are all becoming a thorn in the side of the EU, all are becoming Trojan horses. The concerns of the citizens of these nations cannot simply be swept aside. These nations shall forever feel aggrieved and disgruntled with the current model for the EU and trying to keep them within the fold is nonsensical. Once the desire for ever closer ties was sealed and decided upon during the Maastricht Treaty, those nations which could be predicted to wobble at the mere thought of this should have been presented with a sensible alternative rather than dragging these nations along under foot. This shows a large organisation incapable of alternative thought and inflexible with its decision making. Why include someone in an event who doesn’t even wish to be present?

The sensible resolution for all of this rests with the European Free Trade Association (EFTA). This is where matters may become a little complicated but please bear with me. Firstly, let’s look at the inception of the original EFTA. In 1960, unable to become a member of the European Economic Community (EEC) thanks to the vetoes from France, the UK became a founding member of EFTA. The other nations who joined EFTA in 1960 with the UK included Austria, Denmark, Norway, Portugal, Sweden and Switzerland. When the UK, along with Denmark entered the EEC in 1973 they both ceased to be members of EFTA. In those intervening years as members of EFTA, the UK and the other EFTA members known as the “outer seven” proved to be a very effective and successful trade bloc when “handling” the EEC for trade deals. With EFTA being a trade agreement agreed upon within Europe, this allowed EFTA members to hold their own free trade agreements with other non European nations. In fact during the UK’s tenure in EFTA, the organisation proved to be so successful that it validates the reasoning that the UK does not need to be a member of the EU to prove itself successful.

In 1970 Iceland joined EFTA while the UK was still a member and EFTA became the “outer eight”. When the UK and Denmark joined the EEC in 1973 the EFTA members became the “outer six”, only to be joined in 1986 by Finland, but the status quo was maintained with Portugal joining the EEC. In 1991 Liechtenstein joined EFTA and became one of the “outer seven”. This proved to be short lived as in 1995 Austria, Finland and Sweden became members of the EU, reducing EFTA to the “outer four” of the current members which are Iceland, Liechtenstein, Norway, and Switzerland.

It was only once the UK had left EFTA in 1973 that the organisation itself began to lose its political and economic clout, allowing the member nations within EFTA and finally the organisation itself to falter and weaken as the EU strengthened. Ultimately, when the UK chose to leave EFTA for the EU, this proved to be catastrophic not only for the organisation but also for those nations who chose to remain within EFTA. The current EFTA members which are Iceland, Liechtenstein, Norway, and Switzerland can now be separated into two groups. The one group consists of Iceland, Liechtenstein and Norway while the other group consists of a singular Switzerland.

In 1992 after the Maastricht Treaty the EU reconvened at Porto where the then seven members of EFTA and the members of the European Community (EC) within the Single Market signed the European Economic Area (EEA) Treaty which grants all EEA members the freedom of movement for people, goods, services and capital throughout the EEA, while accepting all legislation from the EU. The EEA was established in 1994. The EEA Treaty appears to be an incongruous and disingenuous act on two counts. Firstly, EFTA members were not members of the EC, the soon to be renamed EU, but even though these countries were not members of the EC, nor members of the Common Market they were expected without redress to accept and adopt a Treaty drawn up by countries they were not affiliated to and implemented by an organisation to which they did not belong and to also willingly accept the laws of these other countries without any form of redress. Secondly, the EC were able to gain the signatories of the EFTA members as Austria, Finland and Sweden were in the process of becoming members of the EU and at the time Switzerland was also seeking membership of the EU. This left Iceland, Liechtenstein and Norway literally out in the cold and in a weakened position of having to sign the treaty. Being such small populated countries they held little sway. If the UK had remained a member of EFTA the EC would never have dreamed to dare to impose the EEA Treaty upon EFTA. There is one obvious absence from the EEA and that is Switzerland. At the end of 1992 the Swiss held a referendum and their electorate sensibly voted to reject signing the EEA Treaty. Since then the Swiss have continued to hold negotiations with the EU 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. Switzerland, though a small nation with a population of just over 8 million punches well above its weight for economic wealth. It must be assumed for this reason alone, for fear of some form of economic retribution that the EU sets Switzerland apart allowing it special status to remain outside of the EEA.

Furthermore, to add to the disingenuous act of coercing EFTA members into being EEA signatories, the treatment of the EU (discounting Switzerland) upon the three remaining countries of Iceland, Liechtenstein and Norway has been nothing short of despicable. Despite not being members of the EU, solely for the purpose of trading within the single market these three nations have been forced under an EU controlled EFTA to accept the “European Free Trade Association Surveillance Authority” whereby a “Surveillance Authority” based in Brussels monitors these three small nations to ensure they abide by the EEA and obey the legislations set out by the EU. Not only satisfied with that, the European Court of Justice (ECJ) based in Luxembourg has its own EFTA Court solely to preside over those three nations and to pass judgement.

All those of you eager and happy to remain within the EU, contemplate and digest that information. The EU making, passing, policing and upholding laws upon nations to which it is not affiliated and should have no jurisdiction over. If this occurred in South America or Asia you would soon accuse the organisation of acting immorally. That it is the EU you blithely accept these conditions. Imagine the future, with the UK being reduced to a State within a single European federal nation, with laws made, enforced and policed by those from outside what was once your own country. Are you still clambering to remain in the EU?

It is a terrible affront that the EU via the EEA have taken over EFTA and changed it into something completely different. EFTA did not belong to the EU. EFTA worked in unison with the EU. EFTA was envisaged by the UK and EFTA was founded by the UK when the UK had no affiliation whatsoever with the then EEC.

So is that it then? Is it all over before it has even begun? Does this mean that if the UK votes to leave the EU they shall have to adopt the Swiss plan of dealing painstakingly with the EU, holding negotiations with the EU under bilateral agreement? Perhaps. Does this mean EFTA isn’t a solution for the UK upon exiting the EU? Possibly.

There is one nation that has to be taken into account with all of this. Switzerland. Even the thought of tiny Switzerland turning its economic wealth and banking system against the EU proved too much of a potential threat for the EU to face head on and force the Swiss to accept the EEA Treaty. Now after 24 years of waiting to join the EU, even with all the confines of being in an EU owned EFTA, Switzerland is finally withdrawing its application to join the EU. Unfortunately for the Swiss in 2005 the electorate in a referendum voted to sign the Schengen Treaty and become a member of the agreement even though Switzerland was not a member of the EU.

So where does this leave the UK exactly? Well, never in a million years did the EU expect the British public to be granted a vote in an EU referendum. That was never a part of the plan. If the electorate were to overwhelmingly vote to leave the EU? I believe the shockwaves in Brussels would be seismic. If the EU backs off terrified at the mere hint of seeing the Swiss as a potential threat to them, imagine how they shall perceive the UK, a colossus economically, politically and population wise in comparison to the Swiss. Quaking and boots spring to mind. In the past where the three tiny EFTA nations of Iceland, Liechtenstein and Norway have had to ask, plead and beg on bended knee, the EU would discover a very different reaction from the UK if it were negotiating its exit from the EU. Those politicians nominated on behalf of Westminster to negotiate for the UK would not ask of the EU, they would demand of the EU. Something very different and something I’m sure that would make the EU feel very uncomfortable. The EU never envisaged being in this position and that is to the benefit of the UK.

EFTA never belonged to the EU in the first place for them to subjugate it. The first act the UK could do is, with immediate effect is to remove itself forthwith from the EEA without any fear of economic retribution from the EU. The next step would be for UK delegates (without any referral or communication with the EU) to convene with delegates of those countries, Iceland, Liechtenstein, Norway and Switzerland. The UK could inform them that they were setting up a new trade bloc and cordially invite them to join. As the EU had “taken” EFTA, this new organisation could be called the British & European Free Trade Association (BEFTA). By agreeing to become co-signatory members of BEFTA this would rescind any and all previous deals those nations have with the EU, effectively moving them from EFTA to BEFTA making all EFTA contracts null and void. Once the wheels were set in motion and the BEFTA regulations were being finalised, only then would BEFTA recognise the presence of the EU. By becoming a new trade bloc within Europe the EU would have to understand and comply with the formal regulations set up by BEFTA. BEFTA would refuse to recognise the EEA, with their nations having transferred from one trade organisation to another the EEA becomes moribund. BEFTA should then refuse to acknowledge the presence of the “European Free Trade Association Surveillance Authority” and the EFTA Court with immediate effect, not only claiming it was irrelevant to BEFTA, but that it should also remove itself from sovereign soil and sovereign affairs. BEFTA can then painstakingly go through the processes of removing all insidious and pernicious articles, clauses and sub-clauses which affected the nations of BEFTA members. BEFTA acting on behalf of Switzerland can then withdraw the nation from the Schengen Agreement. Only then, once all of the foundations of BEFTA are complete would they even consider sitting down at the table with the EU to begin bilateral negotiations between one trade bloc to another. I would assume this would come as a huge blow to the EU.

This new trade bloc would certainly prove alluring to those held captive within the red tape bureaucracy of the EU. For several nations within the EU the sight of a prosperous and successful brand new BEFTA may prove so alluring that they would defect, swapping their allegiances and memberships from the EU, to escape the EEA. The two prime examples at present for this would appear to be Denmark and Sweden. Neither country is in the Eurozone and the thought of joining a new friendlier trade bloc based solely upon trade would be far too appealing to turn down.

Earlier, I mentioned that the UK and these other disgruntled nations leaving the EU would actually prove to be beneficial to the EU. How so? Firstly, I stated that every over large, slothful organisation requires a form of checks and balances to keep it in control. For the EU this could be a new UK led trade bloc in direct competition which would be a healthy adversary to deal with the EU and keep it in check. Secondly, there is every possibility that the EU would be forced to consolidate and contract all plans of a Pan-European federal nation. It would also seem plausible that the EU would officially form a two-tier EU. Germany, France and the Benelux countries would form the top-tier and in the future they may absolve their sovereignty to form a united federal nation. If those within this bloc are so eager and keen to lose their sovereignty to form a new Germania, then by all means let them feel free to do so at their own behest. The bottom-tier would be formed of those nations remaining within the EU and EEA, answerable to the edicts and whims of the newly formed federal nation. Again, it would seem plausible that some of these countries discontented with their position within this tier of the EU may choose to seek extrication from the EU and membership within the brand new BEFTA trade bloc. All new members would be welcome so long as they agreed to sign a covenant agreeing to abide to the edict that this brand new BEFTA would always remain a trade organisation, allowing free trade agreements by the BEFTA nations with other non European nations, nor would BEFTA members ever be allowed to have future plans to incorporate any EU edicts of joint fiscal policies.

If all of this seems too complicated and the UK doesn’t find the idea of forming and setting up BEFTA a new trade bloc within Europe attractive, yet the electorate vote to leave the EU, what are the options then? Well, the UK could just wash its hands of the EEA and the EU completely. The UK would have immediate access to global markets outside of Europe and immediate access to expand trade deals with the Commonwealth of Nations. So the UK could still quite easily lay out its demands to the EU before making a complete extraction from the EU. There are always options. There is always a choice.

 

 

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