Amongst those who want the UK to leave the EU there are those who say “Look at Norway, we can have the same arrangement with the EU as they do, a simple free trading agreement”. This is profoundly wrong. The European Economic Area (EEA) countries of which Norway is one have to take on most of the more obnoxious burdens of the EU whilst being excluded from EU decision making . This is unsurprising because the EEA was born of a desire of the European Free Trade Area (EFTA) to integrate with the EU.

EFTA was founded in 1960. The founding members were Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom, with Iceland and Lichtenstein joining later. The United Kingdom and Denmark left to join the European Economic Community in 1973, Portugal joined in 1986., Austria, Sweden and Finland joined the EU in 1995. This left only Switzerland, Norway, Iceland and Liechtenstein.

Negotiations between the EFTA nations and what was then the European Community (EC) for a closer relationship came to fruition in 1992 when the EEA Agreement was agreed by negotiators of EFTA states and the EC members. Switzerland rejected the agreement in a referendum, but later signed bilateral treaties with the EU which have much the same effect as the EEA Agreement. The rest of the EFTA members signed. The EEA Agreement came into force in 1994.

EEA membership requires that subscribing states have to accept the “four freedoms” of the EU: the free movement of goods, persons, services, and capital among the EEA countries as well as those comprising the EU. This the prime reason for not joining the EEA or having a bilateral relationship with the EU similar to that of Switzerland. These “four freedoms” mean amongst other things that EEA members cannot meaningfully control immigration, protect their economy, prevent foreign takeovers or freely engage in any new taxpayer funded subsidy for which is judged to interfere with the market (article 61).

The forced adoption of the “four freedoms” is reason enough not to join the EEA or anything like it. However, there are further sovereignty removal horrors. EEA members have to adopt EU law in the areas of social policy, consumer protection, environment, company law and statistics and surveillance. In addition, article 78 state:

“The Contracting Parties shall strengthen and broaden cooperation in the framework of the Community’s activities in the fields of:
– research and technological development,
– information services,
– the environment,
– education, training and youth,
– social policy,
– consumer protection,
– small and medium-sized enterprises,
– tourism,
– the audiovisual sector, and
– civil protection”

EEA states are not required to make the type of contribution required of EU members to Brussels nor do they receive any funds from the EU. However, they are forced to follow the judgements of the European Court of Justice, they have to pay a membership fee towards “community cohesion, that is, they are required to subsidise the poorer EU states.

The EEA states have no formal position within EU institutions such as the Council of Ministers, the EU Commission or the European Parliament. Hence, EU decisions are made without their official involvement. In addition, the EEA states are required in practice to abide by the European Court of Justice’s rulings. However, there is a joint committee comprised of EU and EEA representatives.

If the UK joined the EEA, in theory they would not have to participate in these areas of EU policy:

“-Common Agriculture and Fisheries Policies;
-Customs Union;
-Common Trade Policy;
-Common Foreign and Security Policy;
-Justice and Home Affairs (even though the EFTA countries are part of the Schengen area); or
-Monetary Union (EMU).”

If the UK is to regain its sovereignty it needs to withdraw completely from the EU for two reasons. First, if we accepted EEA membership or something like it, we should still be so heavily linked into the EU (and would almost certainly become more heavily involved as the EU expanded its remit), that the British political elite would always be able to argue that we were so much part of the EU we might as well go the whole hog and become full members. That argument would have resonance with Europhiles, the resigned and those who have no strong opinion either way about the EU.

The second reason is that even as it stands EEA membership would deprive the UK of massive amounts of sovereignty including the most important of all sovereign powers, the ability to control who lives in a country. If we are to leave, the UK should deal with the EU and EEA countries as we do with any country outside the EU and EEA territories.

How easy would it be for the UK to leave? Legally it would be difficult because the Lisbon Treaty requires the agreement of the other member states of the EU for a member to withdraw. Article 50 of the Treaty runs:

1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it. A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.
5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.

The reality is that if a state as large and wealthy as the UK announced its withdrawal without conditions, the EU would accept it because they could do nothing to prevent it and imposing sanctions against the UK would be counter-productive because the UK runs a large trade deficit with the EU. Moreover, any sanctions against the UK would ruin the Republic of Ireland, another EU member.

Membership of the European Economic Area is a poisoned chalice. Resist the temptation to drink from it.


This article originally appeared on Robert Henderson’s blog Living in a Madhouse.

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