The Market Solution: Stage One – Leaving the EU

the market solution

Read The Market Solution pamphlet in full

In the Flexcit book, we look at the pros and cons of the different options for leaving. We reject the “Swiss” and the WTO options and conclude that the “Norway option” is the easiest and best-established “off-the-shelf ” solution. It allows us to meet the two-year deadline imposed by Article 50 and ensures continued participation in the Single Market.

However, there is a possibility that the “Norway option” option could be blocked, so we have devised a number of fallbacks. Collectively, they all have in common continued participation in the Single Market. The “Norway option” requires us to rejoin the European Free Trade Association (EFTA) and to continue the European Economic Area (EEA) Agreement. If membership is blocked for any reason, one alternative is to retain the EEA component of EU law, including the four freedoms, creating a “shadow EEA”. We would not benefit from EFTA’s consultation arrangements, so provision would have to be made for bilateral consultations on new legislation.

There is a further possibility that, in the process of agreeing a new EU treaty sometime after 2017, current EFTA states would be offered associate membership of the EU. In that case, the “Norway Option” might disappear. There is also a theoretical possibility that EU negotiators could refuse to agree an EEA-based solution. Either event requires a fallback.

For this, we could adopt the processes and strategies used by the Australian government in securing its trade relations with the EU. In 1997, it signed a joint declaration on EU-Australian relations, followed two years later by a Mutual Recognition Agreement (MRA) on conformity assessment. Thus, an informal, unilateral declaration was anchored by the MRA, as a formal treaty. The combination permitted trade to be undertaken on terms favourable to both parties. The scope exists for the UK to do likewise, agreeing to match EU trade harmonisation laws by way of a unilateral declaration, based on the current EEA acquis. This does not need the approval of EU member states.

As we would be maintaining the all-important regulatory convergence, we can insist on access to Single Market, invoking WTO non-discrimination rules. Completing the process, the UK would then negotiate an MRA on conformity assessment. To this could be added agreements on tariffs and programme participation, replicating core elements of the EEA Agreement. Then, working all these into the Article 50 negotiations would provide the formal framework. As long as the UK did not seek access to the market on better terms than those on offer to full members, there could be no serious obstacles to concluding an agreement.

In terms of programme participation, there will be many areas of administrative and technical cooperation which parties will want to continue. These might include the European Defence Agency (which is managing the A-400M military freighter programme) and Eurocontrol, the latter taking in the development of the Single European Sky. We also need to think about staying in intergovernmental bodies such as the European Space Agency. Then there are projects such as the Galileo global positioning system, in which we have a heavy financial investment. Other areas include the Erasmus student exchange programme, and the framework research programme (Horizon 2020), together with the European Research Area. Even outside the EU we can stay in these programmes. But there is a price tag.

EFTA states pay dues and the Norwegians also pay “Norway Grants” which help post-Communist members to catch up with their richer neighbours. Additionally, the EFTA states pay EEA grants. The UK would also have to contribute. But we would also get some money back. According to the Norwegian government’s figures, its total EU mandated payments (gross) are approximately £435m (€600m) per annum. With a population of five million, that is approximately £86 (€120) per capita (gross). Net payments are about £340m (€470m) per annum, or about £68 (€94) per capita.

In 2014, the UK gross contributions to the EU were £19.2bn, less £4.9bn rebate. That gives an equivalent gross payment of £14.3bn. After CAP and other receipts, our net contribution was £9.8 bn. A population of 64 million puts our annual equivalent gross and net payments respectively at £223 and £153 per capita. Outside the EU but paying on the same basis as Norway, our annual contributions would be more than halved.

Another important issue to deal with is the continuity of third country treaties agreed under the aegis of the EU. Currently the EU lists 787 bilateral treaties, together with 243 multilateral agreements. They cover a vast range of subjects, many of which are essential to the conduct of Britain’s trade and international relations. Without continuity, the UK would have to renegotiate or renew hundreds of treaties with third countries. Fortunately, under international law, there is a “general presumption of continuity”. In relying on this, the UK will no doubt be guided by the Vienna Convention on Succession of States in respect of Treaties, even though we have not signed up to it. This allows for a newly independent State – in this case the UK – to keep most treaties in place. All it has to do is tell all the parties and get their formal agreement to continuation. Renegotiation is not needed.

Another option is for the UK to negotiate an arrangement with the EU, giving Britain notional membership status solely for the purpose of taking advantage of the third country treaties. This would most certainly be of limited duration, giving time for selective renegotiation with the original parties to the third country treaties.

global bodies

Single Market standard-setting: a simplified flow. Global bodies receive multiple inputs, but EU Member States work through the EU, while EFTA/EEA members are able to negotiate directly with the global bodies.

Once out of the EU, we will be able to resume our seats and cast our own votes on global standards bodies. Much of the law governing the conduct of the single market now originates at global level. Through the WTO Agreement on Technical Barriers to Trade (TBT) and related agreements, international standards are now progressively replacing EU rules. Thus the UK will be ideally positioned to help make the laws which will govern the EU. They are processed by Brussels for implementation by national bodies, but they do not originate in the EU.

If we work with EFTA/EEA, we will still receive laws from Brussels, but we will have shaped them long before they become EU law.

Follow me on Twitter 

Like The Sceptic Isle on Facebook   




4 thoughts on “The Market Solution: Stage One – Leaving the EU

  1. If lots of words are going to be used in a pamphlet or report they need to be interspersed with lots of reinforcing graphs, colourful images, photos and the like.

    The UK Referendum leave campaign has to be targeted at ‘Blue Coller’ workers who read tabloids as well as the academic types who read the broadsheets. The old saying stands true: ‘A picture paints a thousand words’


    • I doubt blue collars are going to be reading the pamphlet. But they may read blog posts, tweets, facebook posts and comments, listen to arguments and debates that are informed by Flexcit and the market solution pamphlet. It is an intellectual foundation, from which we can put out more pithy, concise marketing material and make informed arguments. It can be boiled down to six bullet points at its most simple.


  2. Therein lies the problem of the Brexit Campaign. Not only are the Brexit lot fragmented, your response is dismissive to Blue Coller workers of which many start at the bottom and work themselves up into senior management… and in a few instances become CEOs of major corporations. Some are thick, many aren’t, but all have a vote! Your response is also laced with academia, so I’m not surprised my post hasn’t received the response it deserved. Harking to part of a society only is like playing in the champions league final with only half the players on the field. If Brexit fails, this will be one of the clear reasons!


    • I’m dismissive of blue collar workers? The guy who told me that blue collar workers need bright coloured pictures is saying i’m dismissive? Pretty rich. I never said they were thick, you heavily implied that they were. How entitled do you think you are by saying “my post didn’t recieve the response it deserved” ??

      I made a simple point. The point of the pamphlet, and the comprehensive plan it is based on, is not to be read widely across the populace. It is designed to inform the debate, and it is available to anyone who does want to read it. We are asked “what does Brexit look like?” and that leads to a thousand other questions, such as “how will we prevent trade being disrupted?” “what will be the effect on the economy?” “Will we lose jobs?” “what about our trade deals?” “Will I still be able to live and work in other EU countries?” and many, many more. The point of the plan is to answer those questions, that is how it informs the debate. From that platform the message can be spread in a multitude of ways, through a variety of people, and for the most part that will actually be the internet and orally. So it isn’t targeting only one section of the population, the plan, and the basic outline of it contained with the pamphlet is just a platform to work from.

      This is an incredibly complex issue, and thus, any plan on how to leave the EU is going to be complex, that is unavoidable. But from that complex plan there various ways and means of communicating the basic elements of it in ways that people will hear and understand. You talk to me like i’m some bubble dweller from Westminster. I live in Barnsley, I come from Hull, i’ve worked in factories and retail and now I work in an office, i’m not some fucking academic working in a think tank, or assisting an MP in SW1. I speak to people all the time who have no clue about the EU or this debate, and they worry about the same basic points, usually economy, trade, jobs etc. But you can’t answer these questions in an informed and properly reassuring way unless there is some kind of intellectual foundation.

      As for the “Brexit lot” being fragmented, that’s inevitable. Its easy for remain to be united. THey want to stay in the EU and their only tactic is to disseminate fear and doubt and talk up the uncertainty, it’s pretty easy to unite around that. People who want to leave the EU are a diverse bunch, some are informed, many are not, and there a a multitude of reasons that people might want to leave. THe real problem with the Brexit campaign is that the mainstream, well funded campaigns, are hapless, ill informed and have no plan, therefore are not able to answer people’s uncertainties.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s