Idle musings: The EEA as a transition point or destination?

Roland Smith
Apr 22, 2016 · 7 min read

When the subject of the UK exiting to an EEA/EFTA position (like Norway and Iceland) is discussed among Leavers, one soon finds oneself checking “are you talking about EEA/EFTA as a destination or a transition point?”

I generally find that everyone means a transition point. But the shades of difference, even on such a narrow point as this, can be accounted for by several factors.

Firstly, among Leavers, the EEA/EFTA position is much more attractive than EU membership. That statement alone can lean towards seeing the EEA/EFTA position “as a destination”.

Secondly, talking openly about EEA/EFTA as a transition point comes with a health warning that this might be interpreted as EFTA being merely an ephemeral vehicle for the UK’s passing convenience, rather like using a railway station where one has to get off one train and run across the platform to catch another. With ‘using’ being the operative word.

EFTA countries, whose support would be important, might rightly take issue with that.

This again suggests EEA/EFTA might need to be something of a destination not a short-term transition point, although you may notice some qualifiers entering the discussion here, via the phrases “something of” and “not a short-term”.

In other words, while one may see the EEA position as a transition point nestled inside a longer-term staged roadmap, one must nevertheless be sufficiently comfortable with it as though it were a destination.

This connects to the next point.

The railway station with connecting trains is not a good metaphor for the EEA/EFTA as a transition point. It’s hard to find an alternative metaphor that works well but it is more like moving to a new home in a large building where the building’s other occupants would welcome you as a neighbour and would like your help in giving the whole building a makeover. Moving home is not something to be done lightly and one has to be happy with the idea of living there. But equally people in real life make moves like this, fully expecting to transition to somewhere else in future. Or — and this introduces us to the next point — the new home may itself go through a sufficient transition such that you may decide to stay there.

So EEA/EFTA “as constituted” is a transition point. But it’s possible that a reconstituted EEA/EFTA is a destination, with for example Sweden and Denmark also moving back to that position. However because everyone understands the EEA/EFTA position as it exists today, we say that that position would be a transition point.

Have I lost you yet? I hope not.

If not, stick with me because there’s more.

What would Vote Leave or some of their people do if the EEA option became a consideration during the campaign? I hasten to add that there is no sign of this at present but rather like the competitor who perpetually comes second, EEA/EFTA is hovering around in the minds of some key players on the Leave side more than one might imagine.

The key to this comes back to the “firstly” point I made earlier. Let’s just repeat that:

“Firstly, among Leavers, the EEA/EFTA position is much more attractive than EU membership.”

What I didn’t add to the end of that sentence was…

“…but Vote Leave think they can get a much better deal”.

Daniel Hannan MEP, who is at the heart of Vote Leave, is a very articulate advocate of this position — basically “Norway’s great but we can do even better” — and has written/spoken in these terms on many occasions.

That brings us to how (and why) Vote Leave and some key figures in it may come to view the EEA/EFTA position as viable. Specifically, they could come to view it as a short-term transition point — the railway station with connecting trains — because they are convinced they can get a “better deal”. The EEA/EFTA position thus becomes a “necessary evil” that they have to “put up with” for a while.

But as outlined earlier, such an approach may not work because EFTA countries will feel they are being used as a vehicle of convenience. And, as a consequence, they could stop Britain moving to that position.

This could open up the idea of a “Shadow EEA” — the UK agreeing with the EU to maintain the UK’s full single market participation after the UK leaves EU membership but without the EFTA architecture. If that happened, it would be because the EU/UK agree it as a temporary measure before a “better deal” is struck. However that would open up other issues, the largest being the temporary nature of it which the markets (and the politics) would interpret as meaning “nothing has been resolved” and “we’re now in a Twilight Zone”.

That’ll go down like a lead balloon in various quarters.

The other similar way Vote Leave may privately look at EEA/EFTA is that it could be a fallback position, to be used if they don’t pull off their “better deal” during Article 50 negotiations. Put another way, they set out to buy the grand new home on top of the hill with sweeping views across majestic countryside, but (without declaring this) if they fail, they then fall back on the EEA/EFTA home. It is a nice idea and raises a few thoughts:

  1. Expectation management. Vote Leave would find it politically difficult to declare this fallback position in advance for fear of it spiking their negotiating position on a “better deal”. That may be why the option isn’t mentioned by them now, yet is still just beneath the surface. With that backdrop of the public not being teed up to EEA/EFTA in advance, falling back to an EEA/EFTA position — as the phrase “falling back” suggests — will be perceived as “retreat” to something “not as good”. Politically this is very difficult, even toxic, and one can foresee Remainers kicking off at that point, saying “We’ve come all this way and now we’re going to be in a position still ruled by the EU with no say and still paying”. They may even start making noise about another referendum i.e. to cancel the leaving process. More to the point, though, ending up with EEA/EFTA as a fallback would make it politically very difficult to then argue it is a transition point. Instead, it would be perceived by the average voter as the final destination: a “second-best outcome” that we are now “stuck with it until the end of days because we tried for something better but didn’t get it”. That’s not good at all.
  2. Practicality of the better deal. So much of this comes down to how one views the practicality of forging a “better deal” in the space of about three years. Why “about three years”? Because of the constraints of Article 50 and any preliminaries; and also taking account of the electoral cycle and the Conservative Party’s need to announce agreement on a deal before the general election of 2020. Figures in Vote Leave such as Michael Gove clearly think the “better deal” is possible in that time, otherwise one assumes they would not be making a case for it. But long-time expert on EU affairs, Dr Richard North, sees it as impossible because the moment one goes down the bespoke route, the time needed to bring it together rises almost exponentially. The EU’s own bureaucratic inertia in forging trade deals (as many Leavers acknowledge) is a further big weakness in the argument for doing a quick “better deal”.
  3. Uncertainty. The basis of the “better deal” is to have it all: To have full access to the single market without being part of it and to be able to limit immigration from the EU. So assuming that is the goal of the British government after a Leave vote, one can also assume that “uncertainty” will go into overdrive with markets gyrating, the USA putting on pressure on the UK to steer an easier course, and other world bodies like the IMF and the G8 also applying the same pressure. This is because no one outside hardcore Leavers believes that such a “better deal” can be done in anything like a reasonable period of time.

The one thing that could rescue this approach — of aiming for a better deal — is if other countries within the EU take Britain’s Leave vote as the moment for them to also take action to leave. While I think that will come in due course, especially among other Nordics, I believe it less likely while the path to Out is unclear. That doesn’t, of course, mean Marine Le Pen will keep quiet after a British Leave vote — she won’t — but the number of French people actually backing her position while the path to Out is still unclear is another matter altogether. Remember that Le Pen is not in charge in France.

Which brings us back to the idea of the EEA/EFTA position as a new home: not the glittering new home on the hill that is out of reach, and not the ephemeral “railway platform”. But a new home that is achievable, realistic and full of potential.

So to bring this musing to some conclusion, Leavers may agree that the EEA position can provide a transition point. And in the interests of Leaver unity, we would ideally stop there and move on to singing songs together around a camp fire.

And yet, and yet. We can’t get away from the fact that we are talking about subtly (but importantly) different scenarios and therefore different definitions of transition.

Central to those differences lies the much mooted “better deal”, the timescale for such a deal, and the plausibility of it being struck in anything under 10 years.

But what’s at the heart of the “better deal”? That old chestnut “free movement”, of course. The curse that has so infected the entire Leave movement and may one day be its undoing.

Roland Smith

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Fellow of the Adam Smith Institute. Brexitologist. Globalist. #Brexit