The conventional options are laid out in the table, with a reminder of what they involve. We do not need to disappear into the details – always a problem with discussions on Europe – but let me outline what we should take from them.
The first one, EEA membership, often called the ‘Norway option’, works well for Norway but is not really appropriate for a major power like the UK.
Sometimes pejoratively described as ‘government by fax’, the balance of power looks to be squarely on the EU side. The disparity is exaggerated – Norway is represented on 200 EU committees, it does not have the accept every ruling, half its financial contributions are voluntary, and many of the EU’s regulations are copied from other international organisations’ requests – organisations on which Norway is represented and we are not.
Nevertheless, as it stands this model would not work for us. To make it viable it would need an arbitration court (not the ECJ), a dispute resolution procedure, and a number of other institutional changes. It would be possible to design and even negotiate such a structure, but it would take much more than 2 years.
The Swiss option, EFTA membership plus a host of bilateral treaties, is the best starting place and is informative in many ways.
It is not perfect for us however. It incorporates ‘free movement of people’ for the moment, although there is a clash coming on that, after a Swiss referendum was carried in favour of applying an emergency brake – a real one this time!
However, understand the comparative negotiating position.
Switzerland is a small country surrounded by the EU. Its trade is absolutely dominated by the EU – over 62 per cent of its exports go to Europe. It runs a large trade surplus, and it is not big enough to be a critical market for any EU nation.
The negotiation between the EU and Switzerland in the 1990s was marked by some hostility after it rejected EU membership, and yet it struck a decent deal.
The optimum aim for us would be similar, but without the free movement of peoples. That would not be on the table. Essentially we would be looking for a full scale free trade agreement. And it has just been done by another country.
If you want a model of how this would look, go on the European Commission website and look at the Canadian Comprehensive Economic and Trade Agreement that the EU has just struck.
It eliminates all customs duties, which the EU website excitedly describes as worth €470 million a year to EU business. A similar deal with Britain would save it 5 times that on cars alone.
This would be a perfectly good starting point for our discussions with the Commission.
At the same time these negotiations are going on Britain will need to undertake a massive programme of simultaneous negotiations to negotiate free trade agreements with target countries that will be key to a more global approach.
