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Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.

In 2003, in her book Statecraft, Margeret Thatcher set out the case for EFTA. Her comments follow a long line of British tradition and strong Conservative support going back to Macmillan in 1959. It’s worth reminding ourselves of what Margaret Thatcher said:

“In 1992, Norway, Iceland and Liechtenstein – that is the remaining EFTA countries, bar Switzerland – concluded negotiations with the EU which established a European Economic Area (EEA). These countries now enjoy free trade with the European Union…

“…They also enjoy the unhindered access guaranteed by the operation of the European Single Market. But they remain outside the customs union, the CAP, the CFP, the common foreign and security policy and the rest of the legal/bureaucratic tangle of EU institutions”.

So far from being alien to the British tradition, EFTA is very much a Conservative construct. That’s why, it is important to set the record straight.

Myth No. 1: There is no control on Freedom of Movement

As an EFTA member, we would have significantly more control over immigration. Article 112 of the EEA Agreement sets out important safeguards that would allow Britain to “unilaterally take appropriate measures” in the event of “serious economic, societal or environmental difficulties”. More generally, Article 28(3) says that limitations can be applied “on grounds of public policy, security or health”.

These are precisely the powers David Cameron tried and failed to obtain from the EU in his renegotiation in 2016. They would allow us to restrict freedom of movement if numbers were to reach unacceptably high levels.

Myth No. 2: We would be rule-takers, not rule-makers

The fact is that, yes, EFTA states have access to the Single Market; however, they enjoy the option to delay, adapt or derogate from any Single Market law or Directive, sitting on the EEA Joint Committee. Moreover, any decision to incorporate law must be unanimous.

Norway and Iceland, alone, have derogated from EU law on more than 400 occasions between them. And it’s worth noting that less than a third of EU Directives affect the EEA in the first place.

The much more collaborative role we would have in the law-making process “has value for the City” too, as Bim Afolami wrote for the Financial Times. An end to the Direct Effect of EU law means we would have a genuine right of refusal to implement EEA law. In 2011, for example, Norway declined to implement the ‘Third Postal Service’ Directive.

Common Market 2.0 is good for our economy, as George Trefgarne states:  “For those who care about economic growth, the EEA is the best way out of the Brexit impasse. Not only would it deliver certainty and sovereign legislative flexibility, it would allow business investment and market activity to recover”.

Myth No. 3: The EFTA court “shadows” the ECJ

Closely linked to the assumption that we would become rule-takers, is the idea that the EFTA Court is “shadowing” the ECJ, as one Brexiteer recently Tweeted.

But, the EFTA court is a wholly separate and independent court with separate and independent jurisdiction. Adrian Yalland explains: “Importantly, the EFTA court is only obliged to “have regard to” ECJ case law and is not in any way obliged to “follow” those decisions, thus maintaining absolutely its independence in the same way as Scottish courts are independent of English courts even when considering UK-wide legislation (such as human rights law).”

In fact, the EFTA court regularly departs from EU decisions (for example, Gunnarsson v Iceland). That means we escape the “ever closer union” and the EU’s core principle of Direct Effect.

Moreover, as a guidance court, its decisions are non-binding on our domestic courts. No longer would we be forced to follow the convoluted, and often contradictory, case law of the ECJ. What’s more, the UK would have far better representation in the judiciary, with 1 of 4 of the EFTA court judges, as opposed to 1 of 28 ECJ judges.

Myth No. 4: We will be in a permanent Customs Union

As we make clear in our pamphlet, a customs arrangement is temporary until alternative arrangements can be agreed:

“The UK will negotiate its entry into a comprehensive customs arrangement, with the EU, including the common external tariff unless and until alternative arrangements to secure frictionless trade and avoid a hard border in Ireland can be agreed.”

According to Michel Barnier, a Norway-style deal is “the only frictionless model” for UK-EU trade because it is founded in institutions and procedures which already exist. The EEA has already created the legal structures to make this work in its Protocols. The same point – the institutions, procedures and structures already exist – means also that Common Market 2.0 is likely to be the fastest route to Brexit.

We would be mistaken to believe that a permanent customs union is necessary for a border without infrastructure in Ireland. Borders without infrastructure exist all across the EU. Norway and Sweden, for example, share the EU’s longest land border and their away-from-the-border, hi-tech enforcement arrangements have resulted in smooth, cross-border customs operations.

Common Market 2.0 is actually preferable for the backstop because the EEA Agreement states clearly that any country can exit the EEA at 12 months’ notice. This is important because the vast majority of the Irish border issues are Single Market alignment issues, whereas only a small minority are customs related.

Therefore, whatever is agreed between the UK and the EU around Customs, the UK would have the ability to create a hard border if the EU was not fulfilling its promises to help us find technological solutions. This would change the dynamics in future negotiations by increasing our leverage, restoring the balance between the UK and the EU.

Myth No. 5: There would be no trade deals

EFTA states have the power to do their own trade deals, outside of the EU. They have 27 deals with 43 other countries.

Once we are out of the temporary customs arrangement, we would be able to make trade deals with the rest of the world. As our pamphlet states:

“Although it is true that initially we would apply the EU’s common external tariff, a Common Market 2.0 deal makes an agreement on alternative arrangements much more likely, which would allow us to make these new trade deals around the world. This is because membership of the Single Market will eliminate the need for most checks at the Irish border as our regulations will be identical or equivalent.”

Myth No. 6: We would continue making big payments to the EU

Under Common Market 2.0, we would take back control of budgetary contributions from the EU, ensuring more money for our public services at home. It is broadly stated that the UK would pay around 64% of our current contribution to EU budgets as an EFTA State, but in actual fact, it could be much lower than that – some estimates put it at £3-5 billion.

Our contributions to the EU would be based on which joint programmes, schemes and agencies we wished to participate in, and, under the voluntary, “goodwill” EEA Grants Scheme, any contribution per head would be calculated on our GDP per capita – which is much smaller than Norway’s.

Myth No. 7: EFTA is not Eurosceptic

In the past, many principal Eurosceptics have advocated EFTA:

  • “Failing to consider EFTA has been our single worst mistake over the past two years” (Dan Hannan, Twitter, January 2019)
  • “Increasingly the Norway option looks the best for the UK” (Aaron Banks, Twitter, 2015)
  • “I have a full set of European Journals, from the days I interned for Sir Bill Cash, which include passionate articles arguing that Britain should have the same relationship with the EU as Norway — now anathema to some Eurosceptics.” (Matthew Elliot, The Sunday Times, 17 March 2019)
  • “Wouldn’t it be terrible if we were like Norway and Switzerland? Really? They’re rich. They’re happy. They’re self-governing.” (Nigel Farage, BBC Question Time, 17 January 2013)
  • “If we got it right, we could negotiate a generous exit, securing EFTA style access to the Common Market.” (Boris Johnson, Speech to Bloomberg, 2014)

Common Market 2.0 isn’t a soft Brexit, it’s a strong Brexit. To reiterate, we would be out of the EU’s political institutions, the jurisdiction of the ECJ, the common agricultural and fisheries policies and the EU’s drive towards “ever closer union”. We would increase our power to control freedom of movement, our laws and finances, deliver on the referendum result and we would also be part of an alliance of prosperous democracies.

71 comments for: Robert Halfon: Mythbusting Common Market 2.0

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