tag:theconversation.com,2011:/id/topics/eea-26822/articlesEEA – The Conversation2019-01-17T14:20:42Ztag:theconversation.com,2011:article/1099812019-01-17T14:20:42Z2019-01-17T14:20:42ZBrexit: a Norwegian view on the Norway-plus model and why it wouldn’t be easy for the UK<figure><img src="https://images.theconversation.com/files/254336/original/file-20190117-32822-1yu598j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/norway-great-britain-business-chairs-internationl-1263871225?src=KbKmupIB8GKM0ogncc98ZA-1-8">Ink Drop/Shutterstock</a></span></figcaption></figure><p>The UK parliament’s <a href="https://theconversation.com/brexit-deal-flops-theresa-may-survives-so-what-happens-now-109975">rejection of the government’s Brexit deal</a> has put the idea of a “Norway-plus” model back on the table as a possible outcome of the UK’s long march towards Brexit. Norway is not a member of the EU, but it is associated with the bloc through more than 130 agreements, including the comprehensive <a href="http://www.efta.int/eea/eea-agreement">European Economic Area (EEA) agreement</a>. Through these agreements, Norway has incorporated roughly three quarters of EU legislation, but is not involved in making these laws. </p>
<p>The EEA agreement is based on a structure that mirrors the governance and legal institutions, with <a href="http://www.efta.int/About-EFTA/Frequently-asked-questions-EFTA-EEA-EFTA-membership-and-Brexit-328676">bridging arrangements</a> between the countries in both the European Free Trade Association (EFTA) and the EU. The institutional arrangement reflects the fact that Iceland, Liechtenstein and Norway were not willing to rescind sovereignty to a set of international institutions. Switzerland is the only EFTA member that is not in the EEA and it has its own separate arrangement with the EU. This includes free movement of persons and goods, but only to a limited extent the free movement of services. But all these countries have access to the EU’s single market.</p>
<p>To adopt the Norway model, the UK and EU would have to include the EFTA states in their negotiations. The UK would also have to seek membership of EFTA, or reach a separate agreement with the EU and the EFTA states. </p>
<p>The EEA agreement is not designed for the participation of countries that aren’t a member of either the EU or EFTA. Such a party to the agreement would not be subject to the jurisdiction of any of the courts or surveillance mechanisms that are central to the main characteristics of the EEA agreement. The UK would therefore either have to negotiate an arrangement with the EFTA states to be subject to the jurisdiction of the <a href="http://www.eftasurv.int/">EFTA Surveillance Authority</a> and the <a href="http://www.eftacourt.int/">EFTA Court</a>, or an arrangement with the EU to be subject to the jurisdiction of the European Commission and the Court of Justice of the European Union.</p>
<p>For reasons of reciprocity, the other parties to the EEA agreement would have to give their approval to such an arrangement within the EEA. It would also require the agreement of Switzerland, since Switzerland is party to the EFTA treaty. </p>
<h2>Not tailored to UK interests</h2>
<p>It’s not clear that such negotiations with the EFTA states, and with Norway in particular, would be straightforward. Although the Norwegian prime minister, <a href="https://uk.reuters.com/article/uk-britain-eu-norway/norway-may-help-find-solutions-if-britain-seeks-to-join-efta-pm-idUKKCN1NX16V">Erna Solberg</a>, and influential <a href="https://www.politico.eu/article/icelandic-foreign-minister-to-uk-please-join-efta/">Icelandic politicians</a> have indicated they would welcome the UK into EFTA, there have also been <a href="https://www.theguardian.com/politics/2018/dec/07/norwegian-politicians-reject-uks-norway-plus-brexit-plan">some more reserved voices</a>. </p>
<p>Norway has many interests in common with the EU’s Nordic and continental member states. It is a strong defender of a social market economy and defends a significant role for the public sector in shaping society. It is well-known for its progressive policies on gender equality and sustainable development. The UK and Norway, on the other hand, have different interests in many areas such as in fish, agriculture, and labour market standards, among others.</p>
<p>But Norway also has strong historical and contemporary bonds with the UK, from trade to defence. The two states share a restricted vision of the EU’s political development in the sense that neither want the EU to become a fully-fledged federal state. The UK is also one of Norway’s largest single state <a href="https://www.regjeringen.no/no/aktuelt/business-as-usual-norway-and-the-uk/id2610407/">markets for goods and services</a>. </p>
<p>If the UK joins the EEA, the UK’s significantly greater size and global influence will likely unsettle the balance within the EFTA-part of the EEA. The UK’s and Norway’s differences in interests and priorities will become apparent, as the EEA is not tailored to the UK’s interests. Crucially, non-EU EEA countries have to agree unanimously to adopt a EU law into the EEA. This has worked well up until now, but will probably be much harder should the UK be part of this arrangement.</p>
<p>The UK is unlikely to end up balancing state sovereignty, national democracy and market access in a way similar to Norway. Norway’s handling of its many types of EU association relies on a range of factors, not least the ability to de-politicise the situation and to disassociate the deeply politicised issue of EU membership from the rapid and dynamic process of adopting new EU legislation. The UK’s political system is prone to confrontation, and stands in marked contrast to Norway’s where consensus is usually sought.</p>
<h2>Norway unsettled</h2>
<p>The UK is likely to politicise the EEA agreement and in doing so may render more starkly apparent the fact that EEA countries are not EU members, but must accept EU law. Today, Norway enjoys a status as an awkward special “member” of the EU because it is so tightly included within the single market. The process of Brexit will symbolically and substantively underline that Norway is not actually a member – and this will clearly rub off on the EEA if the UK is included within it. </p>
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<a href="https://theconversation.com/after-brexit-norwegians-face-dilemma-over-future-of-norway-model-with-the-eu-96164">After Brexit, Norwegians face dilemma over future of 'Norway model' with the EU</a>
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<p>Even though there has been a lot of consensus over the Norway model within Norway, the country is deeply divided over the question of whether Norway should actually join the EU. The strongest opponents to membership also oppose the tight affiliation to the EU through the EEA agreement, and their view has been gaining support recently.</p>
<p>From this point of view, accession of the UK to the EEA agreement could be welcome, as it could contribute to a politicisation of the way EU law is adopted into the EEA agreement. On the other hand, the Norwegian employers’ association <a href="https://www.nationen.no/kronikk/en-tredje-eos-vei-for-storbritannia/">has noted</a> that the UK may weaken the EEA if it joins as a member.</p>
<p>The approach in Norway to the possibility of the UK joining the EEA can’t be separated from the larger EU membership debate in Norway. Many fear, or hope, that Brexit will lead to the sidelining of the EEA if the UK adopts the Norway model.</p>
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<header>Hans Petter Graver is the author of:</header>
<p><a href="https://images.theconversation.com/files/249586/original/file-20181210-76983-1azl8ax.png?h=128">Squaring the Circle on Brexit: Could the Norway Model Work?</a></p>
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<p class="fine-print"><em><span>Hans Petter Graver does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Norway is deeply divided over the question of its relationship with the EU.Hans Petter Graver, Professor, Department of Private Law, University of OsloLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1070672018-11-16T12:54:08Z2018-11-16T12:54:08ZMay government’s Brexit aims were never achievable – we’ve been hunting a fantastical beast all along<figure><img src="https://images.theconversation.com/files/245965/original/file-20181116-194519-67tlr3.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Snark – the beastly figment of imagination created by Lewis Carroll.</span> <span class="attribution"><a class="source" href="http://snrk.de/snark-assemblage">Lewis Carroll</a></span></figcaption></figure><p>The Brexit process started in March 2017 with the <a href="https://www.bbc.co.uk/news/uk-politics-39431428">triggering</a> of Article 50, allowing two years to complete the process. The main story since then has been of postponing difficult decisions in the hope that something would turn up. Ministers have insisted they have a mandate from the people but have struggled to agree on what it entails in practice. Negotiations within the UK government have been as difficult as those with the EU. </p>
<p>It might have been expected that, before March 2019, we would have a clear idea of what Brexit would look like. Instead, <a href="https://theconversation.com/brexit-draft-withdrawal-agreement-experts-react-107027">we have</a> a 20-month “transition period”, which the UK government has been calling an “implementation” period. It is neither a transition nor an implementation phase, but the period in which the real negotiation of what Brexit means will take place; it can be extended once by agreement of both parties. </p>
<p>What has <a href="https://www.politico.eu/pro/10-things-you-need-to-know-about-the-theresa-may-eu-brexit-deal/">been achieved</a> now is the minimum required for the formalities of withdrawal: the financial settlement; an agreement on citizens’ rights; and an ambiguous commitment on the Irish border question. The talk in recent months has suggested that the Irish border is the last remaining obstacle to a deal. This is misleading, as the Irish border stands in for a much larger set of issues on which discussions have barely begun – from the single market to trade to regulations. </p>
<h2>Red, red lines …</h2>
<p>At the beginning of the process, the UK government laid down a series of <a href="https://news.sky.com/story/brexit-picking-apart-theresa-mays-red-lines-on-leaving-the-european-union-10732511">red lines</a>. These included withdrawal from the single market, the customs union and the jurisdiction of the Court of Justice of the European Union, and no differentiated Brexit for the different parts of the United Kingdom. These have all been breached.</p>
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<a href="https://images.theconversation.com/files/245834/original/file-20181115-194491-1ofs44o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/245834/original/file-20181115-194491-1ofs44o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/245834/original/file-20181115-194491-1ofs44o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=806&fit=crop&dpr=1 600w, https://images.theconversation.com/files/245834/original/file-20181115-194491-1ofs44o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=806&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/245834/original/file-20181115-194491-1ofs44o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=806&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/245834/original/file-20181115-194491-1ofs44o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1013&fit=crop&dpr=1 754w, https://images.theconversation.com/files/245834/original/file-20181115-194491-1ofs44o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1013&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/245834/original/file-20181115-194491-1ofs44o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1013&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Dead red.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/broken-red-pencil-on-focus-close-1165467184?src=5NHLmV1iNBiXOz-oLgGh7w-1-20">Benedek Alpar</a></span>
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<p>The <a href="https://www.bbc.co.uk/news/uk-politics-44749993">Chequers agreement</a> in July 2018, which formed the basis of the UK negotiating position, conceded that the UK would align with EU standards in manufactured and agricultural goods, a central principle of the single market. The new agreement concedes the customs union in the form of a “single customs territory”. </p>
<p>This is purportedly to deal with the Irish border, but extending the customs union to the whole UK also serves a wider purpose. British manufacturers have been telling the government that they need a customs union to secure frictionless trade and their just-in-time production chains. </p>
<p>The Irish government wants to maintain access to markets in Great Britain. The idea is that the customs agreement is a backstop, to be superseded by an overall trade agreement with the EU. Yet, unless that agreement also includes customs union, it is difficult to see how it could serve the purpose – since you need customs union to prevent the hard border. The UK can also withdraw from it only with the agreement of the EU. And differential treatment for Northern Ireland is certain to spark demands for a special deal for Scotland, as the Scottish government <a href="https://www.bbc.co.uk/news/uk-scotland-scotland-politics-41682581">proposed</a> in December 2017. </p>
<p>During the transition, meanwhile, the UK will be subject to the Court of Justice of the European Union. Thereafter, disputes about agreements will be subject to binding arbitration, another form of supranational jurisdiction. Arbitration panels will have to follow the Court of Justice’s interpretation of EU law. </p>
<h2>Like Oslo, but different</h2>
<p>The UK will therefore remain tied to the EU and have to accept many of its policies. This bears comparison with the <a href="https://theconversation.com/we-asked-the-british-public-what-kind-of-brexit-they-want-and-the-norway-model-is-the-clear-winner-104705">Norwegian model</a> (the European Economic Area) that was explicitly rejected at the outset – though with some differences. The UK will be tied to the EU customs union, which Norway is not. It will not enjoy all the single market benefits, which Norway has (except in agriculture and fisheries). </p>
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<a href="https://images.theconversation.com/files/245836/original/file-20181115-194509-1iq9mxh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/245836/original/file-20181115-194509-1iq9mxh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/245836/original/file-20181115-194509-1iq9mxh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=723&fit=crop&dpr=1 600w, https://images.theconversation.com/files/245836/original/file-20181115-194509-1iq9mxh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=723&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/245836/original/file-20181115-194509-1iq9mxh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=723&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/245836/original/file-20181115-194509-1iq9mxh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=909&fit=crop&dpr=1 754w, https://images.theconversation.com/files/245836/original/file-20181115-194509-1iq9mxh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=909&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/245836/original/file-20181115-194509-1iq9mxh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=909&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Cake? Eat it.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cupcake-norwegian-flag-vanilla-cream-fresh-378973636?src=snpAn8U7043DE9jXapgIkQ-2-1">goodmoments</a></span>
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<p>It will not, like Norway, have a consultative voice in the making of EU policies. The UK will not be bound to accept free movement of workers, but this question might come back in return for access to EU markets, especially in services. </p>
<p>Finally, there is to be a differentiated Brexit for Northern Ireland, which will be more closely tied into the customs union and product regulation. There is to be a special designation of products as UK (NI), and a need to meet both UK and EU regulations. </p>
<p>Brexit was never going to be easy, especially after the UK government <a href="https://news.sky.com/story/eu-withdrawal-bill-mps-reject-eea-membership-after-brexit-in-key-vote-11404084">rejected</a> off-the-shelf solutions such as the European Economic Area. What it has ended up with – customs union and bits of regulatory alignment – looks rather like the model at which the Labour Party, after its tortuous internal arguments has arrived, <a href="https://www.theguardian.com/politics/2018/may/14/norway-style-option-after-brexit-cant-be-considered-corbyn-tells-mps">not that</a> Labour will agree. </p>
<p>Had both parties started off with the Norway model, they might have found common ground and a clearer and more comprehensible arrangement. Instead, to cite Lewis Carroll, they have been <a href="https://www.poetryfoundation.org/poems/43909/the-hunting-of-the-snark">hunting a Snark</a>.</p><img src="https://counter.theconversation.com/content/107067/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Keating does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Like Lewis Carroll’s nonsense poem, the Brexit target was a figment of everyone’s imagination.Michael Keating, Chair in Scottish Politics, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/961642018-05-15T10:49:14Z2018-05-15T10:49:14ZAfter Brexit, Norwegians face dilemma over future of ‘Norway model’ with the EU<figure><img src="https://images.theconversation.com/files/218967/original/file-20180515-122906-154641o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Follow our lead. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/home">via shutterstock.com</a></span></figcaption></figure><p>As the UK searches for a new kind of relationship with the European Union after Brexit, comparisons continue to be made with Norway to see whether it could act as a useful model. MPs will now <a href="https://euobserver.com/news/141777">get to vote</a> on whether to follow the “Norway model” and remain in the European Economic Area (EEA) post-Brexit, after the House of Lords passed an amendment on the issue in early May. </p>
<p>Norway has sought as close an affiliation as possible to the EU without becoming an EU member. As <a href="https://policypress.co.uk/squaring-the-circle-on-brexit">our new research has chronicled</a>, the “Norway model” consists of around 120 agreements, with the EEA agreement as the <a href="http://www.nomos-shop.de/_assets/downloads/9783848732197_lese01.pdf">centerpiece</a>. The EU membership issue was blocked in two referenda in 1972 and 1994, and is still blocked by a substantial popular majority against EU membership. </p>
<p>Opinion polls in the country <a href="https://e24.no/makro-og-politikk/eoes-avtalen/fortsatt-flertall-for-eoes/24197666">show</a> that Norway’s current EU affiliation still has broad popular support, and that there is no significant change in overall popular sentiment since the UK voted to leave the EU. But with much more uncertainty about the future, there is a risk that sentiments could become more volatile. </p>
<p>Norway’s political parties are divided on the issue of EU membership, but the country has a proportional electoral system that essentially compels parties to form ruling coalitions. This means every governing coalition usually includes a eurosceptic party that will either want to abolish or renegotiate the EEA agreement – and it results in the inclusion of a provision in any coalition agreement bent on <a href="https://www.cambridge.org/core/journals/european-review/article/norways-european-gag-rules/620571406FE86C7C73103B0E75531B59">retaining the status quo</a> of close EU affiliation without EU membership. </p>
<p>The effect has been to effectively depoliticise Norway’s relationship with the EU.</p>
<h2>What Brexit means for Norway</h2>
<p>Since the UK’s vote to leave the EU in June 2016, questions have emerged on what the consequences might be for Norway if the UK ends up in the EEA, if there is no deal, or if the UK gets a better deal with the EU than the one Norway has currently. </p>
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<p>In an effort to contain potential conflict, the Norwegian government is committed to retain the EEA agreement and Norway’s other EU affiliations. But the bonds between Norway and the UK are strong, and if a conflict were to ensue between the EU and the UK Norway would have to make hard choices. </p>
<p>Norway is in a more precarious position than EU member states. It’s not involved in the Brexit negotiations and so is a decision-taker. It has very limited ability to influence what the EU and UK decide between themselves, and it cannot automatically assume that any future agreements that the EU strikes with the UK will apply to it. The fact that Norway is not involved in the negotiations means that it must basically sort out its relationship to the UK once the terms of the divorce have been settled. </p>
<p>One example regards the rights of Norwegians living in the UK after Brexit. They are currently subject to the same free movement rights as EU citizens in the UK, but the <a href="https://ec.europa.eu/commission/sites/beta-political/files/draft_agreement_coloured.pdf">draft EU-UK Withdrawal Agreement</a> does not include provision for Norwegian citizens. The UK government has, however, <a href="https://www.politico.eu/article/brexit-eu-citizens-offer-extended-to-norway-iceland-and-liechtenstein/">promised</a> that the terms of the agreement will include Norway and the other EEA members, Iceland and Lichtenstein. </p>
<p>Some politicians, notably from one of the opposition parties, the Centre Party, which has a strong rural base and has always opposed the EEA Agreement, have seen Brexit as a window of opportunity to abolish the agreement. Meanwhile, the Norwegian Progress party, a right-wing populist party and member of the minority ruling coalition, is committed to it. However, its leaders do want to renegotiate parts of the deal and the Schengen free movement arrangements in order to protect Norwegian sovereignty, prevent export of welfare benefits and strengthen immigration controls. </p>
<p>The main employers’ association is very concerned with the need for maintaining Norway’s current EU affiliations. But the country’s trade unions are divided: while most of the leadership supports the current arrangement, some of the branch organisations oppose it or want to renegotiate it. </p>
<p>One issue that recently sparked great controversy in Norway is whether Norway should join the EU’s <a href="https://ec.europa.eu/energy/en/topics/markets-and-consumers/market-legislation">Third Energy Package</a>, which governs the bloc’s energy market. It would make the Norwegian regulator directly subject to the EU Agency for the Cooperation of Energy Regulators. This raises constitutional issues in Norway since the EEA arrangement does not provide for administrative agencies at the EU level to make decisions that are binding in Norwegian law. Nevertheless, despite strong opposition from many MPs, in late March the parliament <a href="https://www.reuters.com/article/us-norway-eu-energy/norway-adopts-eu-energy-rules-averting-break-with-bloc-idUSKBN1GY2OY">voted to approve it</a>. </p>
<h2>Lessons for Britain from the ‘Norway model’</h2>
<p>Norway now faces several dilemmas. The fewer changes there are to the UK’s present relationship to the EU, the fewer problems there will be for Norway. At the same time, the more closely affiliated the UK becomes to Norway once it leaves the EU, the more likely it is that the UK will politicise and alter Norway’s current EU affiliation. </p>
<p>Another dilemma that Brexit raises is a wider question about what role Norway should play in what kind of Europe. The government is afraid to open this debate because it fears undermining the present arrangement. But continuing to shirk the issue could also cause questions of legitimacy.</p>
<p>Norway’s experience shows that retaining access to the EU single market is complicated but possible. A major force that keeps Norway in line, is that once a deal with the EU is struck – whether the EEA or the Schengen deal for example – it is an “all or nothing” solution. Refusal to take on board new legislation – such as the energy package – could unravel whole areas of co-operation. </p>
<p>There is political will from both the EU and the Norwegians to maintain close relations, something which allows for a certain measure of flexibility. The traditional Norwegian political climate of consensus also contributes to maintaining the status quo by keeping most controversial issues outside the scope of active politics. Since every coalition government has an agreement on leaving the EU membership issue aside, the broader constitutional and democratic questions about the cumulative impact of Norway’s current EU affiliation are not really addressed. </p>
<p>But the UK’s political system is far more confrontational. The EU issue has sparked profound controversy and in contrast to Norway, even rather mundane issues may be politicised and linked to matters of high principle. Under such circumstances political leadership is very difficult because leaders have limited ability to regulate the level of conflict and how the issues link in with each other.</p><img src="https://counter.theconversation.com/content/96164/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Norway’s relationship with the EU is carefully managed – what lessons does it have for Britain after Brexit?John Erik Fossum, Professor, ARENA Centre for European Studies, University of OsloHans Petter Graver, Professor, Department of Private Law, University of OsloLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/887492018-01-22T11:46:46Z2018-01-22T11:46:46ZIrish border after Brexit: an expert on Norway-Sweden explains how to keep things smooth<figure><img src="https://images.theconversation.com/files/202593/original/file-20180119-80197-1gdxle4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/border-between-sweden-norway-713674480?src=EiT9sddDuBkzibfsbYlwtQ-1-0">shutterstock.com</a></span></figcaption></figure><p>In the north-western corner of Europe, cross-border mobility and trade is flourishing between Norway and Sweden. More than 25,000 people commute to work over the border, and the countries are among each other’s most important trade partners. One is an EU member; the other is not.</p>
<p>The efficiency and smooth running of the border may therefore seem surprising. The explanation lies in a combination of cultural preconditions and legal arrangements between the two countries. The question then arises: could these Norwegian-Swedish border arrangements serve as a model for other parts of Europe, such as post-Brexit <a href="https://theconversation.com/uk/topics/ireland-62">Ireland</a>?</p>
<p>Norway and Sweden have large cultural similarities, including each being able to understand the other’s language. The countries were even united <a href="http://www.historytoday.com/stuart-burch/norway-and-1905">between 1814 and 1905</a>. Even though this union was dissolved, the countries continued to cooperate and have shared laws. In the 1950s, they entered a passport union together with the other Nordic states Denmark, Finland and Iceland, which allowed ID-free travel between these countries.</p>
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<a href="https://theconversation.com/ireland-a-century-of-trade-relations-shows-why-a-soft-border-is-so-important-88498">Ireland: a century of trade relations shows why a soft border is so important</a>
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<p>Norway and Sweden thus have close ties, characterised by a high degree of trust. This is indicated by the fact that several of the border crossings in the sparsely populated areas along the 1,630km long border are unattended.</p>
<p>This tradition of cooperation forms the base for the work of the <a href="http://www.norden.org/en/nordic-council-of-ministers?set_language=da">Nordic Council of Ministers</a>, where Sweden, Norway, Denmark, Iceland and Finland work together on a wide range of policies. Within this framework, the countries have agreed on how to simplify matters for people moving across their borders. All Nordic citizens can freely live, study or work in any of the countries – you just have to register upon arrival. You will then get a civil registration number, which gives you access to the many social services available in the these highly regulated welfare states.</p>
<p>The accession to the EU by some of the countries, including Sweden, has somewhat limited the scope for formal Nordic agreements. Still, this form of cooperation is an arena for identifying and solving problems. Importantly, the Nordic cooperation includes not only the level of governments and ministers, but also working groups and expert panels on lower levels. This means that Norwegian and Swedish civil servants may establish contacts and simple ways of communication to solve problems, and thus establish a certain level of mutual confidence.</p>
<h2>The EU connection</h2>
<p>Even though cooperation within the Nordic framework is important, the decisive factor for the success of Norwegian-Swedish cross-border movement is undoubtedly the <a href="http://www.efta.int/eea">European Economic Area (EEA) treaty</a>. This agreement between the EU and Norway (as well as Iceland and Liechtenstein) means that Norway is connected to the EU common market. </p>
<p>Norway can trade most goods with its EU neighbours, without customs duties being levied. There are, however, some exceptions, such as agricultural products and food. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/202814/original/file-20180122-46235-1p5sqq0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/202814/original/file-20180122-46235-1p5sqq0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/202814/original/file-20180122-46235-1p5sqq0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=727&fit=crop&dpr=1 600w, https://images.theconversation.com/files/202814/original/file-20180122-46235-1p5sqq0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=727&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/202814/original/file-20180122-46235-1p5sqq0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=727&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/202814/original/file-20180122-46235-1p5sqq0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=913&fit=crop&dpr=1 754w, https://images.theconversation.com/files/202814/original/file-20180122-46235-1p5sqq0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=913&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/202814/original/file-20180122-46235-1p5sqq0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=913&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Norway and Sweden share a 1,630km long border.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-vector/norway-political-map-capital-oslo-national-272005061?src=kKqO6R9pZC8onc3_6GBd2Q-1-36">shutterstock.com</a></span>
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<p>Norway has also adopted EU legislation on coordination of social security, so that that people who move or commute between it and the EU qualify for benefits in case of unemployment or illness. In spite of not being an EU country, Norway has even joined the <a href="https://ec.europa.eu/home-affairs/what-we-do/policies/borders-and-visas/schengen_en">Schengen Agreement</a> on abolishing border controls. In this way, the free movement between Norway and Sweden that has existed since the 1950s has been retained and reinforced by European cooperation.</p>
<p>Of course, there are occasional problems for cross-border mobility between the countries. For example, people who move between Norway and Sweden may not always know which country to turn to when it comes to taxation or social security. </p>
<p>People and businesses that move across the border may also occasionally experience disadvantages. Examples include delayed decisions on unemployment benefits for former cross-border commuters. However, the Nordic cooperation on various levels provides a forum for discussing and solving problems relating to administrative practices or national legislation. </p>
<p>To help citizens and companies, Norwegian and Swedish authorities have set up a cross-border service, which provides information and advice on what to consider when working or doing business in the other country. In this way, many problems may be solved by informal and pragmatic low-level cooperation between Swedish and Norwegian authorities.</p>
<p>The success of Norwegian-Swedish cross-border mobility may thus be explained by a combination of cultural features, including a high degree of mutual trust – and legal arrangements. The importance of the EEA treaty <a href="https://www.regjeringen.no/contentassets/5d3982d042a2472eb1b20639cd8b2341/en-gb/pdfs/nou201220120002000en_pdfs.pdf">cannot be overlooked</a>. Without an overarching arrangement of this kind, cross-border movement would probably be much more difficult. As a complement, the Nordic cooperation plays an important role, as it provides mechanisms for discussing and solving problems in a pragmatic way.</p>
<p>Given the historical differences, the relation between Norway and Sweden cannot, of course, be directly transferred to Ireland or other parts of Europe. It does indicate, however, that extensive legal cooperation, problem solving mechanisms on different levels and mutual trust are key features of successful cross-border mobility. This could be applied in other parts of Europe on the EU border.</p><img src="https://counter.theconversation.com/content/88749/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Henrik Wenander worked for the Nordic Council of Ministers in 2009 and 2010, investigating border barriers between the Nordic states.</span></em></p>The DUP should take note: free travel and trade between Northern Ireland and the Republic may hinge on legal arrangements.Henrik Wenander, Associate Professor in Public Law, Lund UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/799382017-06-28T13:07:49Z2017-06-28T13:07:49ZAfter Brexit, should the UK just join the EEA?<p>As Brexit negotiations get underway, it is becoming increasingly difficult to see how the UK can pursue its former “have your cake and eat it” strategy, particularly when it comes to a trade deal.</p>
<p>Some of the most ardent Brexiteers want a totally clean break from the EU. Under this model, the UK would leave both the customs union and the single market. But after the general election, this “hard Brexit” now seems highly unlikely.</p>
<p>One alternative option is to secure continued participation in the <a href="https://theconversation.com/uk/topics/european-economic-area-26823">European Economic Area</a> (EEA). This is the arrangement that was originally established in 1994 to extend the single market to Austria, Finland, Iceland, Liechtenstein, Norway and Sweden. Today the EEA encompasses the EU and Iceland, Liechtenstein and Norway. Sweden, Austria, and Finland became members of the EU instead.</p>
<h2>How would it work?</h2>
<p>The UK would withdraw from the EU and join the European Free Trade Association (EFTA). It could then participate in the <a href="http://www.efta.int/eea/eea-agreement">EEA agreement</a>, a dynamic arrangement bringing together the EFTA member states with the EU in a single market. Non-EU countries are expected to adhere to EU laws covering the free movement of goods, services, persons and capital, but legal disputes go to the EFTA court, not the EU’s Court of Justice.</p>
<p>An important attraction of the EEA option is that it is a known quantity. The EEA is well established and the obligations and benefits are clear. It would offer valuable certainty and clarity about the future. Such clarity is not available under any other Brexit deal at the moment, at least until trade negotiations are complete, which may take a very long time.</p>
<p>With the EEA, the economic situation and trading environment that EU membership has delivered would remain substantially unchanged, allowing much of the status quo regarding the EU single market to be maintained as far as the UK is concerned. The legal framework, however, would change fundamentally.</p>
<p>Before the election, the UK government <a href="http://uk.businessinsider.com/theresa-may-eea-britain-disastrous-brexit-deal-2017-1">rejected</a> the EEA option. So why has this idea suddenly become a more tempting? The EEA agreement meets several of Theresa May’s apparent negotiating red lines – no part of the UK would remain in the EU; no part of the UK would be subject to <a href="https://fullfact.org/europe/explaining-eu-deal-ever-closer-union/?gclid=CPDKrs2q0dQCFZGp7Qod5oUA4w">ever-closer union</a>; no part of the UK would be subject to the jurisdiction of the Court of Justice. Although inside the EEA single market, the UK would be outside the customs union.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/176046/original/file-20170628-7309-7ntgv2.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/176046/original/file-20170628-7309-7ntgv2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/176046/original/file-20170628-7309-7ntgv2.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=451&fit=crop&dpr=1 600w, https://images.theconversation.com/files/176046/original/file-20170628-7309-7ntgv2.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=451&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/176046/original/file-20170628-7309-7ntgv2.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=451&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/176046/original/file-20170628-7309-7ntgv2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=567&fit=crop&dpr=1 754w, https://images.theconversation.com/files/176046/original/file-20170628-7309-7ntgv2.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=567&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/176046/original/file-20170628-7309-7ntgv2.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=567&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Europe’s borderless areas mapped.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<p>EEA membership would also address important aspects of one of the trickier dilemmas for the UK: how to deal with the Irish border after Brexit. The EU-27’s position is that dealing with the Irish problem is one of three “divorce” issues on which substantial progress must be made before future relations between the UK and the EU can be addressed, including any free trade agreement. Membership of the EEA addresses important aspects of this, allowing the EU-27 to move to the free trade agreement that is the UK’s real aim. </p>
<p>It’s very possible that the EU member states would be on board with this option – the arrangement has worked well with Norway. It’s less clear whether Norway, Iceland, and Lichtenstein would be happy to let the UK into the EEA – why let the cuckoo into the nest a second time? But it’s not out of the question.</p>
<h2>Drawbacks</h2>
<p>The obvious question for many is if the UK were to join the EEA, what exactly was the point of the referendum? Membership would mean in effect being a member of the single market, free movement, and being bound by substantial parts of EU law, indirectly, with a reduced capacity to actually influence that law. So much for “taking back control”.</p>
<p>This points to a fundamental political difficulty with the EEA option. Even with DUP support, May still only has a two-vote majority. This means, of course, that if even a small group of hard-line Brexiters revolt, she will be defeated when she presents her Brexit deal to parliament. Could she bring all her backbenchers along with her in support of UK membership in the EEA? Doubtful.</p>
<p>So, May seems on the horns of several very painful dilemmas. Even assuming that the UK is able to formulate a coherent negotiating position, will it long survive, or will the government’s internal contradictions lead to a breakdown of the negotiations with the EU-27? But perhaps the sheer impossibility of achieving the UK government’s contradictory wish list will result in a decision to adopt the most sensible option of all: remaining in the EU.</p>
<p>The EU-27 should hang tough and offer no concessions to the UK at the present time. A hardline approach in Brussels is perhaps the only way now of bringing British public opinion to its senses. Bring them to the cliff edge, and perhaps they will see the logic of not jumping off.</p><img src="https://counter.theconversation.com/content/79938/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher McCrudden is Professor of Law Queen's University Belfast. He is a practising barrister and represented Northern Ireland parties in the Agnew Brexit case before the Supreme Court. He is also a member of the European Commission's expert network on equality directives.</span></em></p>To some it seems like the most sensible option, but it would antagonise the hard Brexiteers.Christopher McCrudden, Professor of Human Rights and Equality Law, Queen's University BelfastLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/687002016-11-14T23:56:13Z2016-11-14T23:56:13ZA Brexit strategy that could unite UK’s parliaments – and keep Britain in the single market<figure><img src="https://images.theconversation.com/files/145809/original/image-20161114-5084-1te5z5f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Which way forward?</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-443766001/stock-photo-dilemma-which-way-to-go-brexit-or-europe.html?src=sfBXGKUFTAjgyxatHqZAdA-1-30">safriibrahim</a></span></figcaption></figure><p>Nearly six months after the <a href="http://www.bbc.co.uk/news/uk-politics-32810887">UK’s vote</a> to leave the EU, the path to Brexit is still uncharted. All we know is that because the UK government wants to maximise single market access without accepting the free movement of people, it is looking for a different arrangement to any that currently exists. </p>
<p>Representatives of the EU institutions and the other 27 member states <a href="http://www.ibtimes.co.uk/only-real-alternative-hard-brexit-no-brexit-eu-chief-warns-1586295">have rejected</a> the idea of a bespoke free-trade agreement with the UK. They argue that the single market is defined by the four freedoms – free movement of goods, capital, services and people – and that they cannot be unpicked. </p>
<p>They also argue, quite correctly, that no country can have full unfettered access to the EU single market without also agreeing to abide by a single set of rules governing that market. With multiple red lines on both sides, the margins for negotiation seem very limited. </p>
<h2>What the UK should do</h2>
<p>I <a href="http://www.telegraph.co.uk/news/2016/10/16/here-is-a-quick-fix-for-our-brexit-dilemmas/">have argued</a> elsewhere that the UK should seek to remain in the single market by joining the European Economic Area (EEA) and European Free Trade Association (EFTA), which <a href="https://www.slaughterandmay.com/media/2535258/brexit-essentials-alternatives-to-eu-membership.pdf">incorporate</a> Norway, Switzerland, Liechenstein and Iceland. This would be subject to agreement by EFTA and the EU. </p>
<p>My reasoning is that the costs of leaving the EU will be <a href="http://www.gov.scot/Resource/0050/00504615.pdf">considerable</a> – cutting 1.8% to 7.8% from annual GDP by 2030 depending on the trade deal, according to independent analysts. Some <a href="https://www.theguardian.com/business/2016/oct/27/uk-economy-defies-brexit-slowdown-fears">counter that</a> there is no evidence of such economic dislocation in the British economy but they are missing the point. We will only experience lower trade, investment and GDP growth after we leave the EU. </p>
<p>The current <a href="https://theconversation.com/brexit-shock-has-caused-a-sterling-crash-of-historic-proportions-heres-just-how-bad-it-is-for-the-pound-62191">sterling depreciation</a> is the financial markets’ closest estimate of the damage to come. Remaining in the single market through the EEA/EFTA while negotiating free-trade deals with non-EU countries is the UK’s second best option. And in an era where isolationism in trade looks set to be increasing following the victory of Donald Trump in the US presidential election, the last thing you want is to be outside a major trade bloc. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/145811/original/image-20161114-5078-1u3xfl3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/145811/original/image-20161114-5078-1u3xfl3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/145811/original/image-20161114-5078-1u3xfl3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=902&fit=crop&dpr=1 600w, https://images.theconversation.com/files/145811/original/image-20161114-5078-1u3xfl3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=902&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/145811/original/image-20161114-5078-1u3xfl3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=902&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/145811/original/image-20161114-5078-1u3xfl3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1134&fit=crop&dpr=1 754w, https://images.theconversation.com/files/145811/original/image-20161114-5078-1u3xfl3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1134&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/145811/original/image-20161114-5078-1u3xfl3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1134&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Time of the essence.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/download/confirm/103191722?src=wP2hlDbLwgNp3M2p3akNNw-1-51&id=103191722&size=medium_jpg">Vasabil</a></span>
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<p>The UK government may prefer a better deal than EEA/EFTA membership, for example by remaining in the EU’s customs union, since it imposes single EU tariffs on all outside countries and would therefore keep UK trade much simpler. But it is difficult to see how the UK can achieve what it wishes within the two-year time limit for negotiations after <a href="http://openeurope.org.uk/today/blog/the-mechanics-of-leaving-the-eu-explaining-article-50/">Article 50</a> of the Lisbon Treaty is triggered – <a href="http://www.bbc.co.uk/news/uk-politics-37532364">due by</a> the end of March. </p>
<p>With the UK in a very weak bargaining position, EEA/EFTA membership would be a “truce position” that would ensure an arrangement was in place within the two years. Remaining in the single market through EEA/EFTA but outside the customs union would also increase its margin for negotiation with non-EU countries – as Norway has done. </p>
<h2>Alternatives</h2>
<p>There have been <a href="http://www.independent.co.uk/news/uk/politics/theresa-may-hard-brexit-soft-article-free-movement-deal-single-market-access-a7341886.html">indications</a> that the UK is trying to chart an alternative Brexit course. It may want to reach an agreement with the EU on tariff-free trade as a transitional arrangement while leaving the single market, for example. The obvious problem is this would not allow the UK to overcome potential non-tariff barriers to the EU, such as the “<a href="https://theconversation.com/london-banking-will-struggle-to-escape-brexit-trap-61929">passporting rights</a>” that allow financial services companies to operate across the union from a single country. </p>
<p>Such an arrangement also runs the risk of falling <a href="https://www.wto.org/english/res_e/booksp_e/analytic_index_e/gatt1994_09_e.htm">foul of</a> World Trade Organisation (WTO) <a href="https://www.wto.org/english/docs_e/legal_e/26-gats_01_e.htm">rules</a> on free-trade deals, unless it were seen as an interim agreement leading to a more comprehensive deal within <a href="https://www.wto.org/english/tratop_e/region_e/regatt_e.htm">ten years</a>. This would require an agreement to that effect with the EU, which adds a level of complication. </p>
<p>A variation is that the UK could pursue a “sector-by-sector” deal that goes beyond tariffs to retain full trading privileges for priority sectors – financial services and motor manufacture for example. The problem is that the EU would want concessions in return, for example in agriculture and fisheries. The UK would have to favour some sectors at the expense of others, which wouldn’t be popular, particularly as the vote to leave was particularly <a href="http://www.fwi.co.uk/news/exclusive-survey-reveals-farmers-back-eu-exit.htm">strong</a> in <a href="http://stv.tv/news/politics/1356963-nine-in-ten-fishermen-will-back-brexit-survey-suggests/">the sectors</a> the EU would want to protect. </p>
<p>The EU might also demand other concessions such as requiring the UK to contribute to the EU budget, as Switzerland has to, or to compromise on freedom of movement. A sector-by-sector deal also seems to flout <a href="https://www.wto.org/english/res_e/booksp_e/analytic_index_e/gatt1994_09_e.htm">WTO rules</a> that in free-trade agreements, the two sides’ duties and restrictive regulations have to be eliminated on “substantially all the trade” between them. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/145815/original/image-20161114-5067-9ex36l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/145815/original/image-20161114-5067-9ex36l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/145815/original/image-20161114-5067-9ex36l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/145815/original/image-20161114-5067-9ex36l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/145815/original/image-20161114-5067-9ex36l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/145815/original/image-20161114-5067-9ex36l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/145815/original/image-20161114-5067-9ex36l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/145815/original/image-20161114-5067-9ex36l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Decisions, decisions.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-219102193/stock-photo-the-way-forward-railway.html?src=FiTlSzkfKSyKIoC6Ot66fg-1-7">hxdyl</a></span>
</figcaption>
</figure>
<h2>The devolved dimension</h2>
<p>The Brexit negotiations also involve an important intra-UK dimension. Two of the UK’s constituent nations, <a href="http://www.bbc.co.uk/news/uk-scotland-scotland-politics-36599102">Scotland</a> and <a href="http://www.bbc.co.uk/news/uk-northern-ireland-36614443">Northern Ireland</a>, voted to Remain, as did London, whose economy depends critically on financial and other services exports to the EU. Scotland’s first minister, Nicola Sturgeon, has <a href="http://www.snp.org/nicola_sturgeon_opening_address_2016">argued</a> forcefully that in the absence of a commitment to keep the whole of the UK in the single market her government will seek to explore ways of implementing an alternative plan for Scotland to protect its interests: what has been <a href="http://www.heraldscotland.com/news/14825041.Nicola_Sturgeon_urges_UK_Government_to_consider__flexible_Brexit_/">dubbed</a> a “flexible Brexit”. </p>
<p>The EU and EEA certainly already display a number of legal models which have been developed over time to deal with different territories’ specific needs. The situation of Northern Ireland will also require the exploration of a bespoke solution as it seeks to maintain free movement across the Irish border as per the <a href="https://www.gov.uk/government/publications/the-belfast-agreement">Good Friday agreement</a>. </p>
<p>The question remains whether the UK as the member state will choose to agree to build in these intra-UK dimensions to the Brexit negotiations. The UK has so far provided little insight as to its strategy, albeit Theresa May, the UK prime minister, has <a href="http://www.telegraph.co.uk/news/2016/10/02/theresa-may-no-scotland-opt-out-or-veto-from-brexit/">said publicly</a> there will be no Brexit opt-outs. </p>
<p>One irony is that if early next year the UK Supreme Court upholds the recent <a href="https://www.theguardian.com/politics/blog/live/2016/nov/03/article-50-high-court-ruling-high-court-set-to-rule-on-whether-mps-should-vote-on-triggering-article-50-politics-live">High Court decision</a> that there must be a parliamentary vote ahead of triggering Article 50, it might actually strengthen the government’s hand. Suppose parliament stipulated it would only authorise triggering Article 50 if the government didn’t negotiate anything which imperilled full unfettered access to the single market, for example. </p>
<p>By imposing this limit on the Brexit negotiations, parliament may remove a key red line on the government’s side and widen its room for negotiation. This would also bring the UK government closer to the positions of the devolved administrations in their pursuit of single market participation and freedom of movement. </p>
<p><em>Anton Muscatelli will be speaking at <a href="https://theconversation.com/the-conversation-live-in-glasgow-countdown-to-brexit-where-next-for-the-uk-and-europe-68371">Countdown to Brexit: where next for UK and Europe?</a> – a Conversation Live panel discussion on November 18 in association with Policy Scotland at the University of Glasgow.</em></p><img src="https://counter.theconversation.com/content/68700/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anton Muscatelli is chair of the Scottish government's Standing Council on Europe.</span></em></p>Nearly six months on from the UK’s shock vote, there looks very little room for manoeuvre in negotiations.Anton Muscatelli, Principal and Vice Chancellor, University of GlasgowLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/644042016-08-25T11:17:01Z2016-08-25T11:17:01ZWhy the Norway model is a flawed blueprint for Brexit<figure><img src="https://images.theconversation.com/files/135383/original/image-20160824-30246-ov9e8f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>The aftermath of the Brexit referendum has intensified the debate on alternative templates for the UK’s relationship with the European Union. The “Norway option”, an arrangement which allows Norway access to the single market without being a member of the EU, is <a href="http://static1.squarespace.com/static/56eddde762cd9413e151ac92/t/5795e913725e254c7c8afa30/1469442330090/The+Case+for+the+%2528interim%2529+EEA+option+5.pdf">often proposed as a transitional station</a> on the journey towards Brexit’s final destination. If this is the case, and given that transitions often outlast their intended life-span, it is worth examining the context in which Norway operates with the EU.</p>
<p>Norway is a member of the <a href="http://www.efta.int/">European Free Trade Association (EFTA)</a>, a free trade group, along with Iceland, Switzerland and Liechtenstein. It is also a member of the <a href="http://www.efta.int/eea/eea-agreement/eea-basic-features">European Economic Area (EEA)</a>, which gives it access to the EU’s single market.</p>
<h2>The question of ‘control’</h2>
<p>The Norway option <a href="http://eulawanalysis.blogspot.co.uk/2016/06/what-next-after-uk-vote-to-leave-eu.html">contradicts</a> most claims of “taking back control” made during the referendum campaign. This is because, in order to benefit from membership of the single market, Norway has to accept the free movement of persons, along with goods, services and capital. Free movement within the EEA is a <a href="https://theconversation.com/what-the-eus-rules-on-free-movement-allow-all-its-citizens-to-do-62186">package deal</a>.</p>
<p>Even if the UK was able to secure an agreement to join the EEA and introduce limits on free movement of persons (which seems unlikely), the Norway option would still betray the <a href="http://www.voteleavetakecontrol.org/briefing_control.html">“control over our laws” promise</a>, as the UK would, <a href="https://theconversation.com/brexit-britain-sovereignty-is-not-a-licence-to-disregard-international-law-63373">in practice</a>, continue to be bound by a large proportion of EU law.</p>
<p>Leave voters’ key concern that <a href="http://lordashcroftpolls.com/2016/06/how-the-united-kingdom-voted-and-why/">“decisions about the UK should be made in the UK”</a> would also not be addressed. Decisions on competition and state aid, which affect businesses and public bodies in the UK, would continue to be taken in Brussels by a supranational body, the <a href="http://www.eftasurv.int/">EFTA surveillance authority</a> which applies (the equivalent of) EU competition law. </p>
<p>During the referendum campaign, the Leave campaign promoted the (<a href="http://www.europeanfutures.ed.ac.uk/article-2847">misguided</a>) view that the EU rules on state aid <a href="http://www.express.co.uk/news/politics/657124/Tata-steel-crisis-Nigel-Farage-Brexit-EU-referendum-David-Cameron">prevented</a> the UK government from intervening in support of the steel industry. The Norway option would not bring about any change in this regard, as those same rules would continue to apply to the UK and would still represent a hurdle for any government that wished to save, say, British steel.</p>
<h2>Trade with the rest of the world?</h2>
<p>Some will object that the Norway model’s <a href="http://www.sv.uio.no/arena/english/people/aca/erikoer/blog/norway-democratic-deficit.html">democratic deficit</a> is a small price to pay for allowing the UK to, once again, <a href="http://www.theguardian.com/politics/2016/jul/14/global-bilateral-trade-deals-bigger-eu-single-market-david-davis">“trade with the rest of the world”</a>, as opposed to being constrained by the EU’s existing trade agreements. And it is true that Norway is not a member of the <a href="https://theconversation.com/should-the-uk-remain-in-the-eu-customs-union-after-brexit-63179">customs union</a> and is free to sign agreements with whoever it chooses. </p>
<p>But trade patterns suggest that Norway is less engaged than the UK (as an EU member state) in trading with the rest of the world. Its trade is remarkably Eurocentric: 80% of Norway’s exports are to the EU, <a href="http://eeas.europa.eu/delegations/norway/eu_norway/trade_relation/index_en.htm">while 65% of its imports come from the EU</a>. As for its freedom to enter into agreements with countries outside the EU, this comes in two guises: it may enter into free trade agreements with third countries together with the other EFTA states (Iceland, Liechtenstein and Switzerland); but it can also sign separate bilateral agreements. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/135389/original/image-20160824-30249-1vvw9e0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/135389/original/image-20160824-30249-1vvw9e0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/135389/original/image-20160824-30249-1vvw9e0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/135389/original/image-20160824-30249-1vvw9e0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/135389/original/image-20160824-30249-1vvw9e0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/135389/original/image-20160824-30249-1vvw9e0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/135389/original/image-20160824-30249-1vvw9e0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The UK’s trade relationships are very different to Norway’s.</span>
<span class="attribution"><span class="source">shutterstock.com</span></span>
</figcaption>
</figure>
<p>A <a href="http://bit.ly/2bDw4cc">comparison</a> between EFTA’s and the EU’s trade agreements shows that EFTA’s are fewer and less comprehensive than the EU’s. What is more, Norway seems in no hurry to sign its own bilateral trade agreements with non-EU countries. So far it has signed only two: one with Greenland, the other with the Faroe Islands. Norway <a href="https://www.regjeringen.no/no/tema/naringsliv/handel/nfd---innsiktsartikler/frihandelsavtaler/handelsavtaler/id438842/">prefers</a> to negotiate agreements through EFTA, rather than separately, in order to take advantage of its larger negotiating resources and to offer third parties access to a wider market than its own.</p>
<p>There is also a <a href="https://theconversation.com/the-unforeseen-cost-of-brexit-customs-62864">downside to not being in the customs union</a>. Exports to the EU are subject to burdensome controls and, in the case of products or inputs from certain non-EU countries, customs duties. This is not so problematic for Norway, since the bulk of its exports are primary (as opposed to manufactured) products, such as oil and gas. These are unaffected by the “<a href="http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/introduction/index_en.htm">rules of origin</a>”, the intricate customs rules used to prove the origin of products. But most of the goods exported from the UK are manufactured products, often made with inputs from non-EU countries.</p>
<h2>Farming and fishing</h2>
<p>Norway retains significant control over agriculture and fisheries. But these economic sectors operate in a very different context from that of the UK. Norway uses its freedom from the Common Agricultural Policy to <a href="http://www.oecd.org/tad/agricultural-policies/producerandconsumersupportestimatesdatabase.htm">subsidise</a> agriculture at a far higher level than the EU currently does, and to erect hefty tariff barriers on agricultural imports. There is a good reason for this: the country’s climate and geography make farming and agriculture extremely challenging.</p>
<p>Norway is also outside of the EU’s Common Fisheries Policy. Yet, as the <a href="http://www.fao.org/fishery/facp/NOR/en">second largest exporter of fish and fish products in the world</a>, it can punch above its weight in international negotiations and in negotiations with the EU (where most of its fish exports end up). Some will see this Norwegian success as a beacon for Brexit. Others may doubt whether leaving the UK’s fishing industry alone to compete against, and negotiate <a href="http://www.fisheries.no/resource_management/setting_quotas/The-regulatory-chain-/#.V6RfFLiU02w">quotas</a> with, formidable rivals such as Norway and the EU was a good idea after all.</p>
<h2>Enduring appeal</h2>
<p>Given that the Norway option seems to make nearly every category worse off than before, why could this solution remain on the table? The answer lies in the structure of the UK’s economy, which is dominated by the services sector. The success of this part of the economy, and its trade surplus, largely <a href="https://www.ifs.org.uk/publications/8411">depends on the single market</a>. What is more, the EU is the largest export market for UK services. </p>
<p>If the UK was to leave the single market, it would wreak significant damage on its most successful exports. Alternative arrangements, such as a network of trade agreements for different sectors, would take years to negotiate and would have limited coverage. By contrast, EEA membership would offer the chance to contain the damage. Yet, at the same time, it would contradict the stated purpose of Brexit. Herein lies the dilemma.</p><img src="https://counter.theconversation.com/content/64404/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Francesco De-Cecco does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Brexiteers keen to follow Norway’s example face an awkward dilemma.Francesco De-Cecco, Lecturer in Law, Newcastle UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/633732016-08-03T15:13:34Z2016-08-03T15:13:34ZBrexit Britain: sovereignty is not a licence to disregard international law<p>The language of sovereignty and supremacy was rife in the EU referendum debates. According to leading Brexiter Boris Johnson, it was the deciding factor in the vote to leave the EU. He said that the <a href="http://www.telegraph.co.uk/news/2016/06/26/i-cannot-stress-too-much-that-britain-is-part-of-europe--and-alw/">“only change”</a> in Brexit will be that “the UK will extricate itself from the EU’s extraordinary and opaque system of legislation: <a href="http://www.telegraph.co.uk/opinion/2016/03/16/boris-johnson-exclusive-there-is-only-one-way-to-get-the-change/">the vast and growing corpus of law enacted by a European Court of Justice</a> from which there can be no appeal”.</p>
<p>In the run up to the big day, British voters were invited to denounce the supremacy of the European Court of Justice (ECJ) in Luxembourg over their <a href="http://www.telegraph.co.uk/news/2016/06/20/britain-needs-brexit-so-it-can-decide-its-own-fate-without-askin/">“fate”</a>.</p>
<p>Misleading statements were made about an <a href="http://blogs.spectator.co.uk/2016/02/michael-gove-why-im-backing-leave/">unaccountable</a> court seeking to <a href="http://www.voteleavetakecontrol.org/european_court_still_in_charge_of_our_social_security_and_borders">extend its power</a> into member states against the wishes of democratically elected governments. </p>
<p>Now Brexit is happening and many expect a blissful renewal of sovereignty to be just around the corner. But the truth is, what many see as the <a href="https://next.ft.com/content/eb8dbe8c-3d0c-11e6-9f2c-36b487ebd80a">most beneficial deal</a> for Brexit Britain – membership of the European Economic Area – comes with many of the same legal rules as EU membership, and much of the same influence from the ECJ.</p>
<p>Days after the referendum, the pro-Leave Telegraph argued that the Norway model would be the only way to <a href="http://www.telegraph.co.uk/news/2016/06/27/after-brexit-only-one-thing-can-keep-britain-together-the-norway/">“keep Britain together”</a>. It seems to be the only clear way to retain access to the single market (though we don’t yet know how important that is to the British government and whether it is willing to accept some kind of free movement of people to keep that access).</p>
<h2>Difficult partner</h2>
<p>Johnson has been <a href="http://www.mirror.co.uk/news/uk-news/boris-johnson-defends-european-convention-8033527">particularly critical</a> of the ECJ, which has challenged the UK several times about breaching EU law.</p>
<p>It did so over a dispute as to whether the UK could require fishing vessels to be <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1470226631967&uri=CELEX:61989CJ0246">75% British owned</a> in order to be registered, and when the UK resisted extending protection from <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1470226017649&uri=CELEX:62006CJ0303">disability discrimination</a> to carers, for example.</p>
<p>The EFTA Court, the EEA’s court, is not constitutionally supreme, so in that respect might seem more like the European Court of Human Rights and more acceptable to those concerned with sovereignty. But the whole system relies on EEA countries choosing to implement the court’s rulings – in other words acting as though it were supreme.</p>
<p>The three judges that preside over this <a href="http://www.eftacourt.int/the-court/jurisdiction-organisation/introduction/">little court</a> (also in Luxembourg) are unlikely to produce different rulings to those of the Court of Justice.</p>
<p>The EFTA Court issues a ruling when a state stands accused of infringing the EEA agreement, just as the Court of Justice deals with complaints about countries breaking EU law. It also gives “advisory opinions” where members ask questions about the interpretation of the <a href="http://www.efta.int/media/documents/legal-texts/eea/the-eea-agreement/Main%2520Text%2520of%2520the%2520Agreement/EEAagreement.pdf">EEA agreement</a>. Disregarding its infringement rulings or advisory opinions would <a href="http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1958&context=ilj">breach</a> the EEA Agreement, and could lead to a break down of the EEA as a meaningful legal order. These <a href="http://www.eftacourt.int/cases/">judgments</a> can cover any aspect of the EEA agreement – from the free movement of workers and goods to intellectual property to state aid and company law. </p>
<h2>Give and take</h2>
<p>A <a href="http://www.europautredningen.no/wp-content/uploads/2011/04/Rap16-E%C3%98S-sett-fra-EU.pdf">study</a> on EU relations with Norway shows a “very good and close” relationship, partly explained by Norway having “faithfully implemented its obligations” to the EEA. </p>
<p>These obligations include implementing a lot of judgments of the ECJ – the court from which many Brexiters wish to escape. Although EEA countries cannot themselves be reviewed by this court, the EFTA Court has a strong tendency to interpret EEA law to conform with the findings of the ECJ (this is the “homogeneity principle”). </p>
<p>And while the UK might be hoping to negotiate some kind of exemption from free movement, it looks as though the free movement rights of people inside the EEA are <a href="https://www.udi.no/globalassets/global/forskning-fou_i/annet/norways-obligations-eu-citizenship-directive.pdf">the same</a> as those in the EU - based on <a href="http://www.tandfonline.com/doi/full/10.1080/09649069.2015.1005997">worker status</a>, not citizenship. </p>
<p>For the EEA to continue to function well, its members must abide by EEA law, which means implementing EFTA Court rulings. This in turn means abiding by the applicable bits of EU law. And this all has to be done voluntarily – which begs the question as to whether the UK, apparently a reluctant rule-taker, is constitutionally well suited to such an obedient role.</p>
<p>Being a member of the EEA would, at the least, stop the British government from blaming Europe for unpopular laws. In the EEA, it would have to explain why it was choosing to follow supranational rulings, without being able to claim that its hands were tied.</p>
<p>This problem is not limited to EEA membership – it is just an especially pronounced example of how sovereignty cannot mean making our own decisions untrammelled by anyone else’s interests.</p>
<p>The EEA option reminds us that all international agreements involve mutual obligations. No agreement can be conducted just on one party’s terms, and Britain cannot expect other parties to be bound if it refuses to do its bit. That is not a loss of sovereignty. That is social existence.</p><img src="https://counter.theconversation.com/content/63373/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charlotte O'Brien receives funding from the Economic and Social Research Council. She is a member of the Labour Party. </span></em></p>The best option for future relations seems to be EEA membership, but that puts paid to the ideal of ‘taking back control’.Charlotte O'Brien, Senior Lecturer in Law, University of YorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/580862016-04-20T10:48:02Z2016-04-20T10:48:02ZFact Check: do the Treasury’s Brexit numbers add up?<p><em>If we take as a central assumption that the UK would seek a negotiated bilateral agreement, like Canada has, the costs to Britain are clear. Based on the Treasury’s estimates, our GDP would be 6.2% lower, families would be £4,300 worse off and our tax receipts would face an annual £36 billion black hole. This is more than a third of the NHS budget and equivalent to 8p on the basic rate of income tax.</em></p>
<p><strong>EU referendum: <a href="https://www.gov.uk/government/news/eu-referendum-treasury-analysis-key-facts">HM Treasury analysis</a></strong></p>
<p>The UK Treasury has published a <a href="https://www.gov.uk/government/news/eu-referendum-treasury-analysis-key-facts">much anticipated analysis</a> of the long-term impact of EU membership on the economy. My guiding questions were: how reliable are these estimates? How much can one trust the headline figure that households will be £4,300 worse off each year if we choose Brexit? Is the methodology appropriate, are the assumptions fair, and are the results credible? And above all, if the answer to all of these is positive, why are the Treasury’s figures so much bigger than the <a href="https://www.iwkoeln.de/en/_storage/asset/277416/storage/master/file/9171406/download/Brexit_meta_study_IW_report.pdf">current consensus</a>, which puts the decline at between 1% and 3% of GDP? </p>
<p>Overall, the Treasury report contains serious analytical work. It is comprehensive, clear and rigorous. The first and second sections lay down the facts about UK membership in the EU and the alternatives. The three alternatives it presents are joining the <a href="http://www.efta.int/eea">European Economic Area</a> (like Norway); reaching a bilateral agreement with the EU (like Switzerland); and relying purely on the trading arrangements within the World Trade Organisation (WTO) (like Russia or Brazil). There are reasoned discussions on regulation, migration and future changes in the EU with and without Brexit; though ultimately the report argues that the economic effects of these are small in comparison to those from trade and foreign investment. </p>
<p>The three main scenarios are estimated using appropriate and sophisticated econometric techniques (in section three and the annexes). The report does a very careful job at comparing and relating each of its main findings to the existing empirical evidence. The message the alternative scenarios deliver is clear: in all three cases, Brexit will entail significant and substantial economic losses. </p>
<p>The smallest losses are for the EEA model and amount to a reduction in annual GDP by 2030 of 3.8%. The intermediary case corresponds to the “Swiss” model and amounts to a reduction of 6.2%, while the WTO option is estimated at a 7.5% drop. These figures are also presented per person and per household, as well as in losses of tax receipts. With the Swiss route, for example, the estimated range is between -4.6% and -7.8%. This corresponds to a loss of about £1,800 per person – about £4,300 per household. This is the also the source of the headline figure given by the Treasury and equates to a loss of UK tax receipts of £36 billion. </p>
<h2>Why the more negative figures?</h2>
<p>This report may not be the last word we hear on the matter, but it will surely set the bar higher for the economic argument. Yet why are these estimates so much higher than the majority of the previous estimates? I think there are at least two reasons.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=633&fit=crop&dpr=1 600w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=633&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=633&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=795&fit=crop&dpr=1 754w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=795&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/119435/original/image-20160420-25592-1fyzopp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=795&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">In or out?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/s/Brexit/search.html?page=2&thumb_size=mosaic&inline=382701964">Aaz Zys</a></span>
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<p>The first is that when the Treasury considers how the change in trade and foreign investment will affect the UK’s productivity, it combines the annual effect over a number of years (the so-called “dynamic” or “rate” effects). The rest of the literature has tended to estimate a one-off step change in productivity (“static” or “level” effect) rather than this cumulative impact. The Treasury’s broader, more encompassing (and more realistic if you are studying the long-term) approach makes its estimates of the losses from Brexit to be bigger than the rest.</p>
<p>But there may be another reason that makes all those other estimates so much smaller. It has <a href="https://www.cer.org.uk/sites/default/files/pb_js_regulation_3feb16.pdf">to do with regulation</a>. Regulation may be burdensome and “imposed by Brussels”, yet providing serious and reliable estimates of its costs and benefits is no easy task. The larger your estimate, the better Brexit looks. The Treasury numbers include them but treat them as smaller than the other estimates do. One major problem is that the econometric evidence for very large regulation costs is non-existent. </p>
<h2>Verdict</h2>
<p>In short, the Treasury estimates are credible. Yet they are conservative: there are at least two ways in which the estimated losses from Brexit could increase. The report could have factored in the <a href="https://www.gov.uk/government/speeches/pm-commons-statement-on-eu-reform-and-referendum-22-february-2016">EU reforms</a> being pushed by the UK government into the main numbers. It could also have used a definition of productivity that didn’t flatter the UK (like GDP per hour worked rather than GDP per capita). These are both included in section three, part three of the report, if anyone wanted to look at them. But I think the decision was correct to downplay these, given the uncertainty.</p>
<h2>Review</h2>
<p>*<em>Jonathan Perraton, Senior Lecturer in Economics, University of Sheffield
*</em></p>
<p>This piece notes that a key reason the Treasury study estimates a larger impact is that it models the impact of Brexit over the medium to long run. If the effect of Brexit leads to lower productivity <a href="https://theconversation.com/how-brexit-would-reduce-foreign-investment-in-the-uk-and-why-that-matters-57909">through</a> lower trade and foreign direct investment, this will lead to a cumulative relative loss of income. As the author notes, all such estimates are subject to major uncertainties, but the Treasury results are based on solid econometric analysis from standard approaches. </p>
<p>Another possible reason for the Treasury results is that they model both a larger impact of Brexit on trade and foreign investment and a larger negative from this impact on UK productivity growth. Overall, though, the author rightly notes that the Treasury has provided a systematic assessment of the possible effects.</p><img src="https://counter.theconversation.com/content/58086/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nauro Campos has several papers that are referenced in the Treasury report.</span></em></p><p class="fine-print"><em><span>Jonathan Perraton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New report says households will be £4,300 worse off if we leave the EU. Here’s the verdict.Nauro F. Campos, Professor of Economics and Finance, Brunel University LondonLicensed as Creative Commons – attribution, no derivatives.