Common Market 2.0: The worst of all worlds

Following the crushing defeat of Theresa May’s Brexit deal in Parliament, the beleaguered prime minister has invited MPs from all parties to discuss their proposals for moving forward with Brexit. One compromise option being advanced is membership of the European Economic Area. Green MEP Molly Scott Cato explains why this could leave the UK stuck between a rock and a hard place.

Flags of EU countries in a line
Flags of EU countries in a line
Molly Scott Cato
Fri 18 Jan 2019

As the Brexit cliff edge comes ever clearer into view, a return to the British art of compromise seems to be popping up in the rear-view mirror. This is definitely appealing, and I certainly appreciate the yearning to end the deep and painful divisions Brexit has created in our society. One of the pragmatic approaches gaining currency is one along the lines being touted by Nick Boles for the Conservatives and Stephen Kinnock for Labour. But this ‘Norway model’ could guarantee that we end up with the worst of all worlds.

In spite of the media focus on the ‘divorce bill’ and the Irish backstop, it is our future relationship with the EU that really matters. There have only been two possible directions this could take: a distant relationship based around a free trade deal, leaving us free to move closer to the US and cut environmental and social protections to make trade deals with other countries; or remaining close to the EU single market and trade systems.

The latter is the model being pushed by Nick Boles and a small group of MPs and is being reframed as Common Market 2.0, because comparing the UK with Norway has not proved popular. This would in essence see the UK join the European Economic Area (EEA) which comprises Norway, Iceland and Liechtenstein. It would be like throwing an elephant in with “a minnow and two tadpoles”, as one Eurocrat wryly put it.

At first glance this appears to be a compromise; meeting the vague desire felt by older generations of Brits to ‘go back’ to an economic relationship. Leaving aside that the European Union began as a political and peace project, it’s important to understand the consequences of such a future and why it flies in the face of what was promised to those who voted for Brexit.

While May’s ‘taking back control of our laws, borders, and money’ is a gross simplification of what Brexit might mean, we can be pretty sure that offering less control in these areas would not be greeted with acclaim. But that is exactly what a Norway-style deal would really mean.

Norway is frequently referred to as a ‘fax democracy’ because, despite the various fig-leaves that allows that country to maintain its self-respect, it is effectively bound by decisions made by myself and my colleagues in the European Parliament and by heads of state of other countries in the European Council. Whether on tax transparency or the energy efficiency of domestic appliances, EEA members accept laws made by others.

Norway’s reliance on EU laws is so complete that it has been called a country ‘both outside and inside the EU’. A report reviewing Norway’s EEA membership concluded that the country is ‘not represented in decision-making processes that have direct consequences for Norway, and neither do we have any significant influence on them.’

An EEA arrangement would also mean accepting freedom of movement of people. Proponents of this model point to an ‘emergency brake’ on free movement that can be applied where there are ‘serious economic, societal or environmental difficulties of a sectorial or regional nature’. This is another fig-leaf and has only been used by the EEA member and micro-state Liechtenstein. In addition, Norway is required to pay for the benefit of access to EU laws and the single market. Estimates are complex but vary from around 75 per cent to about the same amount as the UK currently pays.

EEA members find their arrangement with the EU congenial, providing economic advantages without political entanglements. However, there is dissatisfaction amongst many groups in Norway about the country’s relationship with the EU and an on-going debate as to whether full EU membership would be a better alternative. Indeed, the Norwegian prime minister has questioned why the UK would want a relationship with the EU that's similar to the one her country has with the bloc.

What is certain is they are not keen about inviting an elephant to jump in and create political waves in their peaceful backwater. Just as we were originally blocked from joining the EEC because De Gaulle thought we were not committed Europeans, we might be blocked from joining the EEA.

Brexit was always about trade-offs and would always have to involve a pragmatic way forward. But in the process our elected representatives are forcing themselves to accept an outcome that is far from ideal and far from what the country was promised in June 2016. But the best option is still available: it is continued membership of the EU. And this is an option which the people should be free to choose in a fresh referendum.

Molly Scott Cato is Green MEP for the South West of England and Green Party spokesperson on Brexit.