Brexit: Norway or No Way | Global Trade Magazine
  January 24th, 2018 | Written by

Brexit: Norway or No Way

Options for the UK are Limited

Sharelines

  • A UK-EU relationship based on the Canada model would be based international laws such as WTO rules.
  • A UK-EU relationship based on Norway would allow access to the European Single Market and Customs Union.
  • The Norway model is the only viable alternative for Britain to pursue with the EU.

The United Kingdom is currently in the throes of dealing with its rupture with the European Union. The choices before the UK and its citizens are difficult, no matter which way they decide to go. Some British pols have suggested a new Brexit referendum, suggesting that the vote would go the other way this time.

Barring that, the UK and the EU have to negotiate their divorce agreement and future relationship. The latter can be broken down into two broad models, notes a recent report from Brookings: the Canada model, which would involve a free-trade agreement between the UK and the EU, and the Norway model, which would allow the UK access to the European Single Market and Customs Union but which would also require Britain to accept the EU’s four freedoms—crossborder movements of goods, people, services—without allowing the UK input into the union’s rules and regulations.

In a nutshell, the report argues that the Norway model is the only viable alternative for Britain to pursue and the reason can be summed up in a single word: Ireland. Without membership in the Single Market and Customs Union, a hard border would re-emerge between Northern Ireland and the Republic of Ireland, a situation which is anathema to populations on both sides of that border and which would against the interests of both countries.

In fact, the language of the transition agreement between the two parties provides a Norway-type of relationship, although the posture of the British government is that the UK will ultimately exit the Customs Union and Single Market following transition to a March 2019 Brexit. That’s “not going to happen,” the report opines. “The best outcome for the next round of talks would be an easing of British expectations from Canada to Norway.”

A binary choice—Norway or no-deal—would also benefit financial institutions, investors, and business deciding on whether to remain or leave London. “A soft Brexit, based on Norway,” says the report, “means the least economic and financial disruption,” although its does not address the strong sentiment among British voters to control the movement of people across their borders.

French President Emmanuel Macron and German Chancellor Angela Merkel have begun talking about a “multi-tier” Europe—some refer to it as a European onion, rather than union—with euro zone countries at the core and second-tier members enjoying greater flexibility. To a certain extent, this already exists with the Schengen zone, euro zone membership, and other relationships, some of which are open to non-EU members and some of which have not been adopted by all EU members.

“Options for the UK are limited,” the report concluded. “Short of reimposing a hard Irish border or reversing the Article 50 Brexit withdrawal entirely, the remaining choice is not between Norway and Canada, it is between Norway and no-deal.”


Videos

Sponsored Content

%d bloggers like this: