Joining EFTA, The Least Worst Brexit, is Also About Being a Rule-Maker

The Conservative Party is, as ever, irreparably divided over Europe. As Theresa May struggles through European Union negotiations, her attempts at compromise frustrate backbench Brexiteers who demand a “clean” Brexit, even if that risks a hard border in Ireland which the EU will not countenance.

This leaves May in an impossible bind with her premiership on a knife-edge. But even if the Tory hardliners manage to replace May, they will keep her lost Commons majority. Labour and pro-Europe Tory MPs, the hated “mutineers”, can stand in their way.

On the pivotal issue of Brexit, the Labour Party needs to distinguish itself from a governing party in disarray.

While Jeremy Corbyn has committed to a customs union with the EU, Tony Blair and David Miliband have returned to the fray lobbying him to go further. They call on Labour to back a “Soft Brexit” keeping Britain within the European Economic Area, better known as the single market.

For supporters of Soft Brexit its advantages are obvious. It ensures the closest possible trade links, retains free movement in Europe for British citizens, safeguards EU citizens in Britain, and automatically solves the Irish border question.

The Soft Brexiters themselves need to highlight new advantages to win over voters

The government’s own impact assessments indicate it would be the least damaging departure. The so-called “clean” Brexit risks job losses and recession. The "maximum facilitation” promoted by the likes of Jacob Rees-Mogg could cost up to £20 billion per year- hard to justify while public services like the NHS are starved of funding.

However, Corbyn rejects a Soft Brexit for reasons also cited by its Tory opponents. They argue it would leave Britain as rule takers but not rule makers, conforming to EU laws while having no say on them at Brussels - the worst of both worlds and defying the point of the Brexit vote.

The Soft Brexiteers themselves need to highlight new advantages to win over voters, not just repeat technical jargon about tariffs and trade blocs.

Usefully the intervention of Erna Solberg, the Prime Minister of Norway, is a potential game-changer.

Solberg hints that Britain could join Norway, Iceland and Liechtenstein to participate in the EEA through membership of the European Free Trade Association.

The EFTA option has its trade-offs. To access the single market members follow EU law enforced by an EFTA Court, including the free movement of people, but outside of the EU customs union they can negotiate their own global trade deals via the World Trade Organisation.

The wealth of founding member Switzerland adds to EFTA’s clout. Collectively it has forged trade links with countries such as Canada, India and South Korea.

Not under the jurisdiction of the European Court of Justice, EFTA members are exempt from EU regulations such as the Common Agricultural Policy, a reason Norway voted against joining the EU.

In Britain’s case this could grant a Labour government more flexibility in state investment in the economy, and public ownership of transport and energy. There is also nothing to suggest that, within EFTA, it could not negotiate a bespoke customs union with the EU.

Most significantly, EFTA members are involved in the formation of EU directives despite lacking parliamentary voting rights, and have the right to veto the EEA’s adoption of them at the regular EEA Joint Committee.

This veto power has never been used, but Norway and Iceland threatened to veto the EU Energy Union over concerns it would deprive them control of energy resources and increase consumer costs.

The EU can retaliate to a veto by suspending EFTA’s trade privileges. But Solberg suggests that recruiting Britain - a major economy and trading partner with the EU - would hugely strengthen EFTA’s bargaining power and ability to challenge EU legislation.

The core alliance of Britain and Norway would not just be rule takers, but rule shapers holding the EU to account. It would be Euroscepticism in practice.

a united Labour opposition can present a bold and progressive Brexit vision

The Tory hardliners will cry betrayal at an EFTA Brexit, but they have no monopoly over the outcome of the EU referendum. It is as valid an interpretation as theirs, and to suggest otherwise is an affront to democracy.

While the Tories fight amongst themselves, with the hardliners threatening a bargain basement economy that tears up social protections, a united Labour opposition can present a bold and progressive Brexit vision based on EFTA membership.

It all depends on whether the EFTA countries are willing to embrace Britain, which requires their mutual agreement, and whether Corbyn is willing to change his mind.

More about the author

About the author

Jacob Richardson began his career with Disclaimer and writes on culture, politics and society. Politically he is a democratic socialist and Labour Party supporter. His other interests include cinema, psychoanalysis and professional wrestling.

Follow Jacob on Twitter.

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