NEVER in the field of political combat have two words meant so much, but been defined so little. Soft Brexit.
“Doves” within the main Westminster parties are pursuing it after the electorate snubbed Theresa May’s previous plan (whatever that was). But what does soft Brexit actually mean?
According to The Independent: “A soft Brexit would likely see the UK have a Norway-style membership of the European Economic Area (EEA). This would allow the UK almost full access to the single market while also letting it make deals without the rest of the EU.
“Goods and services would be traded with the remaining EU states on a tariff-free basis and financial firms would keep their ‘passporting’ rights to sell services and operate branches in the EU. This would mean that British firms could do cross-border business in any part of the bloc.”
Well that’s fine then – a classic British fudge that lets everyone feel they’ve won.
Except it’s very unlikely to come off.
Norway is one of three European Free Trade Association (EFTA) members who pay (a lot) for single market access via the EEA. This effectively extends the benefits of the single market and most obligations of EU membership to EFTA – a rival EU trade body set up in 1960. But whilst EFTA/EEA members are in the internal market they are out of the Common Fisheries and Agriculture Policies, Maastricht, the customs union and the euro. They are not governed by the EU in areas like justice or home affairs but they do have free movement in Europe and access to educational and research funds in exchange for a financial contribution.
An attractive-sounding “halfway house”.
But to avail yourself of EEA membership you must first be in EFTA or spend years negotiating a separate bilateral deal (nine years in the case of the Swiss deal which could soon founder over Swiss migration controls which limit freedom of movement). Indeed it took the original seven EFTA-countries five years (1989-94) to negotiate the establishment of the EEA (whose founding agreement extends to 30 thousand pages and 26 volumes). Does Britain have time for that?
Meanwhile, one of the four EFTA members has already said it doesn’t want Britain as a member. Norway’s European affairs minister, Elisabeth Vik Aspaker, said after the Brexit vote: “It’s not certain it would be a good idea to let a big country into this organisation. It would shift the balance, not necessarily in Norway’s interests.”
She also confirmed the UK could only join if there was unanimous agreement in EFTA. That’s a hardball position adopted by a fellow Conservative government. Norway has elections in September which look likely to return the Social Democrats as the largest party. So Norway’s frosty response to EFTA membership for Britain doesn’t look likely to thaw anytime soon.
Iceland’s position is more ambivalent.
The previous president of Iceland Ólafur Ragnar Grimsson called for a new alliance in the wake of Brexit: “It is now obvious that here in the North Atlantic will be a triangle of nations that all stand outside of the European Union: Greenland, Iceland, Great Britain, Faroe Islands and Norway.”
His successor Gudni Jóhannesson has been non-committal over the issue but his conservative foreign minister Gudlaugur Thór Thórdarson supports EFTA membership for Britain.
Still, it's less than a decade since UK Chancellor, Gordon Brown placed Icelandic banks, the Icelandic Central Bank and the government of Iceland on a list of terrorist organisations alongside al-Qaeda after Iceland's banks were bankrupted during the financial crash, so it might be hard for Icelandic politicians to cosy up too close to Britain as a dependable trade ally today.
That action infuriated Icelandic voters then and still hasn’t been entirely forgotten.
Still, even if Britain did charm Iceland and Norway into accepting their EFTA membership application, there’s another hurdle before Theresa May can use that springboard to bounce into the EEA.
The agreement of all EEA members (three EFTA plus 27 EU) is needed to let Britain join and, according to veteran Icelandic politician Jón Baldvin Hannibalsson, that just ain’t going to happen. The former leader of the Social Democrats, who negotiated Iceland’s entry to EFTA and the original EEA deal, told a Nordic Horizons conference last October: “One, Britain is too big for the EEA; two, its government isn’t keen and three, EU members would have to approve Britain joining the EEA and they’re not best pleased with Britain right now.”
Just by the by, writing in the new book McSmorgasbord, Hannibalsson suggests EFTA/EEA membership would be a lot simpler for an independent Scotland and more desirable for Scotland than full EU membership. Opting out of the Common Fisheries Policy would not just please Scotland’s fishing communities, it could ensure Scotland’s portion of the North Sea becomes as well stocked and protected as Norway’s portion of the North Atlantic.
So EFTA and EEA membership might be attractive – but is it politically possible for a Brexiting UK? Probably not.
Firstly, why go through all the upheaval needed to leave the EU, then apply to rejoin its single market through EFTA and the EEA only to reach an expensive halfway house in which the UK has no control over laws and regulations it must nonetheless observe? The Norwegians apparently call their EU agreement a Nike deal: “Just do it.” Will such powerlessness suit Britain -- a country with major delusions of imperial grandeur where a majority of citizens voted Leave precisely to avoid being told what to do?
Secondly, there’s no indication EFTA would welcome the UK – a single nation’s veto would stop an application for EFTA membership in its tracks – making a complete laughing stock of the UK (if we haven’t reached that state already).
Finally, as Hanibalsson puts it: “A decision by the UK to join EFTA and accept the conditions of the EEA is a total reversal of policy. It means accepting severe infringement of sovereignty. It means accepting free movement of people. It means accepting payment into the budget and structural funds of the EU. And it means accepting the judicial role of the EFTA court. The question is: is no deal better than such a deal?”
Good question – one broadcasters might usefully start asking once Theresa May feels brave enough to face the cameras again.
But if EFTA/EEA membership isn’t a goer, and a separate deal could take a decade to negotiate, then the British Government has no option but to conduct a hard Brexit – withdrawing without any kind of deal. Of course EU heads of government are wily folk and the EU/EEC has survived for 60 years because of flexibility towards nations who don’t quite tick all the boxes of membership. Sweden for example, joined when adopting the euro was compulsory for all new members – but 22 years later still hasn’t got round to it. Freedom of movement though -- however problematic – is also integral to the functioning of the single market. It is simply not going to get traded – no matter how many times affronted-sounding British journalists harangue EU leaders over what they clearly perceive as a mere detail.
No wonder the Tory party is reluctant to define soft Brexit. It looks increasingly likely to have slipped from their grasp.
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