Norway-style soft Brexit?

Keir Starmer: it will not prevent hard Irish border

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Brexit: Norway or no-way?

By Daniel J. McLaughlin

There is no precedent to follow for a nation leaving the European Union. Over the course of the bloc's history, no one has left. Come March 29 next year, however, Britain will be the first to depart from the EU. And two years after the referendum vote, and over a year after triggering Article 50, it appears that they do not know how to exit as smoothly as possible.

There are no case studies on which Theresa May can base Brexit. The closest the prime minister can use are from nations that have a trade relationship with the EU, but are not fully-fledged members.

One of those nations is Norway. Their trade relationship with the EU offers a "Scandinavian solution", the Economist argues. Norway, along with Iceland and Liechtenstein, is a member of the European Economic Area (EEA). This group consists of nations that are also in the European Free Trade Association (EFTA), but not the EU, and still wanted single market access. This option "keeps the economic benefits of single-market membership, but dumps the political baggage of ever-closer union and a would-be superstate".

EFTA also includes Switzerland, who rejected both membership of the EU and the EEA. "The group trades between itself and has signed free trade deals with a number of non-EU countries, Canada, Mexico and others," the Business Insider reports. If Britain were to follow the Norway model, they would need to be a member of either the EU or EFTA to be part of the EEA; since EU membership is obviously out of the question, they would need to join Norway, Iceland, Liechtenstein and Switzerland in NAFTA to become the 31st full member of the EEA.

Membership in EFTA and the EEA would allow Britain to maintain full, tariff-free access to the single market. This would be good news to many of the services offered by Britain which face a massive disruption with Brexit on the horizon. While the fixation with financial services may be an error - they are already highly globalised - services "ranging from professional and scientific to administrative and technical", and industries including fishing, chemicals and car manufacturing, could see a loss of as much as 36 per cent of activity. According to Bloomberg, services account for 80 per cent of the UK economy. The trade balance in those sectors - £28.2 billion surplus in November last year - helped towards the £34.4 billion deficit in goods.

As part of the single market, in the EEA, Norway accepts the EU's four freedoms: labour, services, good, and capital. While it is part of the single market, and pays into the EU budget (£740 million in 2016), it does not have any representation or any significant say over the many rules that affects it. It does not have any MEPS and no EU Commissioner, as well as no representation in the Council of Ministers.

There are very few nations that Theresa May can turn to as a way to deliver a smooth and frictionless Brexit. Leaving the European Union has never been done before. The prime minister will need to look at countries that have a relationship with the bloc, but are not fully fledged members. She wants a bespoke deal for Britain, but no one knows what that looks like yet.

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Business Insider

These Conservative rebels believe support for a Norway-style soft Brexit is at a tipping point

  • Conservative rebel MPs claim more and more Tories are ready to join them and back a soft Brexit.

  • 13 Tory MPs signed an amendment calling on Theresa May to pursue a Norway-style Brexit which effectively keep Britain in the single market via the European Economic Area.

  • A leading rebel has told Business Insider that more Conservative MPs will get on board before the vote next week.

  • **A fight is underway within the Labour Party over whether Corbyn should embrace the EEA.

Conservative rebels believe that support among the party's MPs for a Norway-style soft Brexit could be at a tipping point as moderates grow increasingly alarmed at the state of Brexit negotiations.

On Tuesday MPs will vote on an amendment to the Withdrawal Bill which, if passed, would instruct Theresa May to pursue a soft form of Brexit known as the Norway model, plus 14 other amendments.

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