This is Part IV in a series of V – to read the Market Solution proposal in full go here
The “no say” fallacy
As part of the proposal to adopt a “market solution” for leaving the EU it is essential to discuss the extremely important and frequently over simplified issue of “influence”. By this I specifically refer to the influence we exert on the regulatory process.
On this topic, the main line of attack from the Europhile opposition is based on the “still pay, no say” fallacy. This a very effective smear utilised despite its dishonesty because the market solution neutralises the economic argument for remaining in the Union and therefore must be discredited by any means, unscrupulous or not.
Now, I have already discussed the amount that EEA/EFTA members pay for Single Market access, which Europhiles duplicitously combine with the Norway and EEA grants to in order create an inflated figure which is then misrepresented as the fee Norway pays for market access. In actual fact, all combined, it is still significantly less than the UK’s annual £12bn membership contribution and is a perfectly reasonable annual contribution for market access and mutually beneficial joint endeavours between neighbours. It is no revelation that international cooperation costs money, but the benefits clearly outweigh the financial cost. Now it is essential to address the “no say” deception.
It forms the basis of the Stronger In campaign’s effort to undermine the argument for leaving the EU and continuing to participate in the Single Market with the “still pay, no say” slogan it launched in October. At the same time David Cameron sought to publicise the “still pay, no say” meme further during his speech in Iceland, recognising the threat posed by the increased awareness of the “Norway option”. Mere weeks later John Major echoed the message in is Berlin speech, continuing many of the themes of his 2013 Chatham House speech in which he carried a similar message, and sought to confuse the issues.
The narrative was born when Norwegian Prime Minister Jens Stoltenberg coined the phrase “fax democracy” in 2001. It was part of his effort to promote EU membership amongst an extremely sceptical public who had twice previously (1972 and 1994) rejected accession. The mantle was later taken up by former Foreign Minister Espen Eide, an enthusiast for the European project, who held senior positions in the “yes” campaign during the 1994 referendum and is a prominent voice pushing the “influence” theme. He remains dedicated to promoting Norwegian membership despite 80% of voters opposing entry and is prominent in the regrettably shallow and incurious British media’s debate of the “Norway option”.
It is important to note that Europhile Norwegian politicians such as Eide interject in the British debate primarily to protect their own position. It is clear that if Britain leaves the EU and seeks to join EFTA, it would greatly enhance the power and influence of the Association and significantly strengthen Norway’s position outside of the EU. This would be a very significant and probably fatal blow to the Norwegian accession movement. It is a similar situation in fellow EFTA and EEA member Iceland, where a Europhile elite has long sought EU membership despite deep concerns about the consequences and wide spread opposition that has finally led to the bid to join being dropped.
Anna Tvinnereim, formerly Norwegian State Secretary of Local Government and Regional Development and currently Assistant Director for the Norwegian Agency for Development Cooperation, disputes the assertion that Norway lacks influence, insisting: “it is true that we are not there when they vote, but we do get to influence the position […] Most of the politics is done long before it [a new law] gets to the voting stage”. This is verified by the Norwegian Foreign Ministry, which has stated that although Norway does not have a formal vote in the decision making process:
“Experience has shown that this is less important than the opportunities we have to influence other countries by putting forward effective, coherent arguments“.
Participation in the regulatory process, particularly at the early stages, involves providing experts in the field to provide their input. The extent of the influence exerted at this stage depends to a great extent on the quality of the expertise provided.
Formal EFTA/EEA influence comes from a complex system of decision making and formal consultative structures and bilateral measures, the foundation of which is the “two-pillar” system. Via this system there is formal consultation and participation and multiple contacts between the EU and EFTA, particularly in the crucial early stages of the legislative process.
It is of course true that the influence of EEA members is limited to an extent, and this is readily conceded by the current Secretary General of EFTA Kåre Bryn, though he does point to the institutional framework set in place to manage the EEA agreement through which members have multiple points of contact – and therefore opportunities to advise and influence with the EU throughout the legislative process.
The influence of any nation state is necessarily limited to some extent, but it is about maximizing potential, and finding the best political situation from which to exert influence. When scrutinised it is clear that EU Member States have severely limited, and ever diminishing, influence.
Despite not being on the Council of the European Union or the European Council, nor represented in the European Parliament, Norway is able to exert significant influence and protect its own interests. It retains a “right of reservation” (a veto), as set out in Article 102 of the EEA agreement and thus has the right to opt out of new EU legislation, a right that the UK does not have.
The EFTA Secretariat has identified more than 1,200 EU acts considered EEA relevant by the European Commission that have been contested by the EEA/EFTA Member States. The Liechtenstein Institute concluded that these rejections were consistent with the EEA Agreement because the majority of the measures were excluded for technical reasons.
A key example of an EFTA member protecting its sovereignty was Norway’s refusal to implement the 2011 postal directive which would have deregulated the Norwegian postal system along with others in Europe, including the UK, in which the privatisation of the Post Office was a direct and necessary consequence of the third postal directive that required Member States to open up their postal markets to competition, with a view to breaking up national monopolies that are symbolic of national identity and in time creating a common EU postal service.
Another example is in oil and gas production. In 2011 the EU proposed regulations that would cover offshore drilling, a major contributor to the Norwegian economy, and Norway rejected them and disputed the Commission classification of the measures as relevant to the EEA. The EEA Joint Parliamentary Committee stated in November 2012:
“The Norwegian government has taken the view that the proposed regulation by the European Commission falls outside the geographic and substantive scope of the EEA agreement“.
Meanwhile, the UK was once again left unable to protect its own industry. Oil and Gas UK, (“the voice of the offshore industry”, complained:
“Oil & Gas UK is extremely concerned by the European Commission’s proposals for EU Regulation of offshore safety. While we will always support proper moves to improve safety standards, this proposal to dismantle the UK’s world-class safety regime which is built on decades of experience and replace it with new centralised EU Regulation, is likely to have exactly the opposite effect. We are encouraged by the fact that the UK Government is of the same position and has signalled its intention to oppose the Regulation in the best interests of safety.”
EFTA/EEA is, of course, not just Norway but Iceland and Liechtenstein as well, and it is Iceland that is responsible for one of the biggest and boldest rejections of the EU in history. In 2008 when the Icesave bank’s online savings account collapsed several EU countries commenced legal proceedings citing EU law. Iceland is contesting both charges with the dispute still ongoing. Little Iceland, with a population of approximately 313,000 has shown the resilience and influence by saying no to the EU in a way the UK cannot.
If it was to leave the EU and join EFTA, the UK would empower itself and the Association. We are not proposing isolation, or acting alone. We’d form alliances across the globe, and be working from the solid foundation of EFTA+1, a new major player in the global economy.
Most important, and intriguing of all, is the element of control and influence the UK would regain on the world stage if it were to leave the EU. Helle Hagenau, International Officer of Norway’s “No-to-EU” campaign, has said:
“Norway has kept its political independence both nationally and internationally…”
Which, she said, had been:
“… especially valuable in dealing with the United Nations […] When the Norwegian government decides to promote a certain point of view at the UN General Assembly, we just do it […] There is no need to negotiate with numerous other countries and an EU Commission, resulting in a watered down version of that message.”
The UK meanwhile is constrained by the “common position” it is forced to adopt as a member of the EU, thus it is not able to independently present its case, argue its corner, or protects its own specific interests.
We do not have anything like the level of freedom as EFTA members, with the EU having “exclusive power” over our trade policy, the UK has no right to conduct its own international trade agreements. Negotiations are conducted by the European Commission after agreeing a “common position” with Member States via the Council.
Moreover, the powers of the Parliament and the Council are strictly limited. An ever increasing number of EU laws originate from international standards and the majority of these are implemented as “delegated legislation” using the comitology procedure. The committees consist of neutered anonymous officials from member states with absolutely no power to amend or reject Commission proposals. They can only approve them or refer them to the Council.
The Commission has moved to eliminate national vetos altogether and thus weaken the already severely limited power of member states. The UK’s influence in the EU is diminishing as the Union further centralises and quashes democratic protections in its process of completing the supranational government.
Meanwhile, EFTA/EEA countries retain a right of reservation, and therefore have something the UK does not have; the right to opt out of EU law.
Britain is effectively represented by the EU on international standards-setting bodies which are the source of the majority of the single market rules and the main facilitator of global trade through the harmonisation of industry and commercial standards. The EU decides on the [soft] law which its members have to adopt and contributes to the global law-making process. Increasingly, the EU is seeking to increase its influence on this process and marginalise its members in its pursuit of statehood.
By leaving the EU the UK would resume its place as an independent nation on the global and regional bodies, what we might pithily refer to as the “top tables”, and would therefore be able to argue its own positions, protect its national interest by registering a reservation and form flexible coalitions according to the specific industry under discussion. It would no longer be forced by the Commission to adopt the common position against its own interests.
When the regulatory process does finally come to a vote, towards the end of a lengthy and complex process when the real decisions have already been made, if the UK objects to a measure it can veto proposed standards or opt out of them. The EU would cast as many votes on international councils as the UK but only have one veto – thus, the UK would gain equivalence with the EU, creating an equitable relationship. At the early stages of the regulatory process, long before the voting stage in the EU, the UK could block proposals and ensure they never become law.
It is only once such proposals get past these stages, and they have accepted Single Market relevance, that Britain, as an EEA member, would need to consider adopting them. Even then we could refuse to adopt EU law if we considers it against our national interest.
Britain would be in a relatively powerful position, certainly far more than it is as an EU member, where such a refusal would result in a reference to the ECJ and substantial fines.