Norway and EU

Is the UK ready for a Norway-style deal?

Published: 13 July 2018

Because of leaks coming out of the UK Government, we have known for some time what the broad lines of their negotiating offer to the EU would be. Yet the White Paper is still striking for the depth, breadth and detail about the UK’s future dependence on the European Union. It covers almost everything, from customs, to regulations in industrial and agricultural products, competition policy, regulatory institutions, security, broadcasting, justice, social and environmental protection, health insurance, research, energy, refugees, data exchange and overseas development.

Almost all the government’s red lines have been breached. There was a commitment to leave the single market, the customs union and the jurisdiction of the Court of Justice of the EU. Now the single market in goods is retained. There be no customs between the UK and the EU but with a untried arrangement whereby the UK would collect EU customs duties on goods passing through; but the EU would not collect British ones. The UK would effectively be subject to the Court, since its interpretation of the rules would prevail. The UK will adopt European rules on product standards and other regulations and be subject to European regulatory agencies, but will lose its ability to influence those regulations. It claims that it can at any time opt out of common rules but if it were to make a habit of doing so the rules, which are meant to guarantee stability, predictability and consistency across sectors, could become useless. The White Paper talks about the UK Government making ‘sovereign decisions’ to adopt European rules but, as we know from the experience of Norway and Switzerland, this can be an illusory sovereignty when the costs of deviating from the rules is exclusion from the single market or European programmes.

In contrast to the proposal for free movement of goods, there is no provision for free trade in services, including financial services. At the outset of the Brexit process, this was considered one of the most critical issues since services account for some 80 per cent of the economy. The White Paper merely commits to try and cooperate with the EU in providing equivalent rules.  The Government has abandoned as unworkable its earlier hopes that mutual recognition could continue, while still allowing the UK to make its own rules outside the EU framework.           

There is a promise to end freedom of movement of people, as currently exists within the EU as well as with Norway and Switzerland. Instead, the UK’s policy on work permits and migration (which are not quite the same thing) will be directed at foreign countries as a whole. Yet, if policy on mobility of workers is aimed at addressing current needs, the outcome is unlikely to be very different from what exists at present. Contrary to widespread belief, EU citizens can settle here only to work and are only likely to get work where there are needed. 

 A new element in the White Paper is the elaborate institutional mechanism to govern the new arrangement. There will be an Overarching Institutional Framework and a Governing Body, under which will be an Economic Partnership, a Security Partnership and Cross-Cutting Cooperation. In addition, there will be numerous sectoral bodies and agencies. There will be parliamentary cooperation and extensive opportunities for the UK to be consulted before rules are adopted. It is almost as if we were trying to reinvent the European Union but on a bilateral basis. With so much policy being made in these complex intergovernmental bodies and agencies, there could be serious issues of transparency and accountability to Westminster and the devolved legislatures. There appears to be no mechanism for the devolved bodies to participate in these structures, as opposed to being consulted. 

The White Paper does reserve the right of the UK to make its own trade deals with third countries, although those countries would probably prioritize trade deals with the EU, with the UK riding on those. Any deal with third countries would also have to be compatible with the maintenance of EU product standards – so no chlorine-washed American chickens. It is difficult to see what real scope would remain for a separate trade policy in these conditions.

These proposals are too much for the hard Brexiters in the Conservative Party, who see that they do not effectively allow for taking back control. Yet it is by no means clear that they will be acceptable to the EU, which has made it clear that it will not accept ‘cherry-picking’ and that the elements of the single market are inseparable. Certainly the EU is not going to share its own rule-making capacity with a third country, so the UK will have to be rule-taker. The EU will also want to ensure that any common arrangements are subject to its own Court of Justice.

This is the first time that the UK Government has given details on its negotiating position with the EU, but it remains just that. In any negotiation, concessions are necessary and, to get a deal, the UK may have to go even further in accepting the obligations of membership without having a vote.

The proposal puts the UK in a similar position to Norway or Switzerland but with even more obligations as neither of those is in a customs union or single market for agriculture. The UK does propose to opt out of the free movement provisions but, when Switzerland tried to do this, it was told in no uncertain terms that the rest of the deal would be imperilled. In Norway, which has been in this position for over twenty years, there is a broad acceptance that neither the pro nor the anti-EU forces can prevail and that the compromise, however illogical, is the only way to reach consensus.  It is far from clear that political opinion in the United Kingdom has arrived at that point.


Michael Keating is Professor of Politics at the University of Aberdeen and Director of the Centre on Constitutional Change.