ONCE THE UK leaves the European Union on 29 March, it’s only then that discussions can begin on what kind of trading relationship there will be post-Brexit.
There have been a few options floated around over the past few months: ‘Canada plus plus plus’, and ‘Norway plus’ being the most common of the two.
But the Norway Plus option has been referenced repeatedly since a Brexit deal was struck: why, when we’re not even at the trade part of talks yet? The short answer is: politics.
Ahead of the House of Commons vote, it looks like Prime Minister Theresa May’s plan doesn’t have the support to gain the 320 votes needed to pass.
So Tory backbencher Nick Boles has been suggesting that instead of the transition period between 29 March 2019 and 31 December 2020 (which could be extended under the Brexit deal), that the UK should take the Norway model route.
This would mean joining the European Free Trade Association (EFTA) and then the European Economic Area (EEA) – more on these later, as it’s a bit complex (you need to be either in the EU or the EFTA to be in the EEA).
The Norway Plus option is being considered because it’s seen as a way of sweetening the current Brexit deal, which both Remainers and Brexiteers are unhappy with.
Note: There’s been a lot of confusion that the Norway Plus deal would be an alternative to the Brexit Withdrawal Agreement that parliament will vote on 11 December, but this isn’t the case. The Withdrawal Agreement needs to be approved, and only then could they could progress to implementing a Norway-style relationship. Norway’s model is mostly about trade – the EU-UK’s future trading relationship can only be discussed after the UK leaves on 29 March.
In an unlikely Cabinet alliance, Remainer Amber Rudd and Brexiteer Michael Gove are looking at the plan, and crucially, DUP leader Arlene Foster also said her party would consider the Norway option.
But it’s been met with skepticism from most quarters, and added to that scepticism is the put down from Theresa May herself on the Norway option:
“What you see in the political declaration is what would be a deal for the United Kingdom that is not Norway, it is not Canada, it is a more ambitious free trade agreement than Canada, and it ends free movement – which Norway doesn’t do,” she told reporters on her way to the G20 summit in Argentina.
You talk about if a Norway-style strategy would bring Labour along with it – if you look at the Labour party amendment that they’ve put down to the motion on the 11 December, actually what they are doing is advocating rejecting the deal we’ve negotiated with the European Union without having any proper alternative to it.
Norway’s Prime Minister Erna Solberg also said that they would support Britain’s bid to rejoin the EFTA “if that’s what they really want”.
In February, Norway’s ambassador to Ireland Else Berit Eikeland told The Irish Times that the Norway plus deal would amount to EU membership.
Norway and the EU
In short, the Norway model means:
Energy-rich Norway opted against joining the EU in 1994, choosing instead to enter the EEA which binds Norway, Iceland and Liechtenstein with the EU’s member states.
EFTA (the European Free Trade Association) is made up of those three countries, plus Switzerland. EEA membership is only available to either EU or EFTA member states. So, under a Norway-style Brexit, Britain would leave the EU, join EFTA, and only then be able to rejoin the EEA as its 31st full member.
This would mean they would get full access to the Single Market and avoid tariff barriers.
But it has no say in the rules and must adhere to the EU’s four freedoms: free movement of goods, capital, services and persons with its fellow members.
That first option is going to pose a problem for staunch Brexiteers: limiting free movement is seen as May’s number one priority in Brexit talks, and she’s used that feature of the current Brexit deal as its main selling point.
The big advantage for Britain if it became a member of the EEA would be that its financial hub in London remains undisturbed, it would be outside the Common Fisheries Policy which it has pledged to leave, and would also be outside the Common Agricultural Policy.
Although Norway is outside the Common Fisheries Policy, it has a separate symbiotic fishing agreement with the EU that allows EU trawlers to fish in Norwegian waters in order to avoid tariffs on its fish exports to the EU.
The UK government’s own impact assessment found the Norway option would be the least damaging option in terms of economic harm.
What’s the ‘plus’ part then?
The Norway deal in itself isn’t enough to solve all Brexit solutions – it’s hard to find one that would do that, to be fair.
Mainly, the Norway option doesn’t deal with the problem of the backstop and the Northern Ireland border, as Norway isn’t in the customs union. So the solution that’s being talked about is the Norway option and a customs arrangement, hence the ‘plus’.
The customs union means taxes, or tariffs on trading goods is fixed if you’re an EU member. This means that goods can be transported from between EU member states without additional costs or delays.
Although the customs union and the single market are closely linked – with the former being described as “a foundation” for the latter – they are not integral to one another.
Theresa May has promised that they would leave the Customs Union in order to strike up new trade deals around the world, and instead agree to a “customs arrangement” or deal with the EU that would avoid customs checks along the Northern Ireland border.
What about the garlic?
A UK Brexit committee were told earlier this year that the number one trading problem between Norway and Sweden was garlic, as a way of illustrating how problematic and intricate trading between two jurisdictions can be.
You might have heard about Dublin man Paul Begley, aged 46, who in March 2012 was jailed for six years over a €1.4 million scam involving the importation of garlic.
Begley avoided paying customs duty on more than 1,000 tonnes of garlic from China by having the shipment labelled as apples.
The import duties on apples are just 9%, while corresponding taxes on foreign garlic that’s imported into the EU can be as high as 232%.
Around 300,000 tonnes of garlic are produced each year in the EU, compared to roughly 23 million tonnes worldwide. Spain produces 200,000 tonnes of the EU total, followed by Italy and France; EU imports garlic mainly from China and Argentina.
The EU’s longest land border with a different jurisdiction is between Norway and Sweden and is a thousand-mile frontier.
The garlic was legitimately shipped to Norway, where there is no garlic import tax, and then smuggled into Sweden and the rest of the EU by lorry.
Kristen Hoiberget, who runs the customs operation at Svinesund, told the BBC that the average wait time at a customs check in Norway is eight minutes: ”I don’t think there’s any border in the world that’s so smooth.”
- with reporting from AFP
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