The UK would have to follow European Union rules more strictly than Norway, if MPs choose the Nordic model as a route out of Brexit deadlock, sources have said.
Before next week’s crucial vote on Theresa May’s Brexit deal, MPs are being urged to consider an alternative that would keep the UK in the EU single market, through membership of the European Economic Area, the 31-country zone that covers EU member states plus Norway, Iceland and Liechtenstein.
The plan would help the UK minimise the economic impact of Brexit, but would also mean accepting EU rules on goods, services, people and capital, as well as competition and state aid.
Senior officials say the UK would have to follow the relevant parts of the EU rulebook in full and would not be allowed to delay the adoption of laws, a cause of perennial tension between Brussels and EFTA countries. Given the size and proximity of the British economy, EU member states would regard the competition risks too great, according to one EU senior source, who added: “With the UK we cannot accept such a slippage.”
The EEA agreement consists of 6,000 EU legal acts, up from 1,875 when the treaty came into force in 1994. About 500 EU laws are yet to be adopted by the four EFTA countries, including scores of banking regulations that the EU passed after the financial crisis. (Non-EEA Switzerland participates in the single market and has been accused of similar delays).
Member states have always been observant to anything that tilts the playing field against their companies, said Lotta Nymann-Lindegren, a former EU diplomat specialised in Brexit. “There is a large grey zone, where even with minor issues you can all of a sudden create a competitive advantage, so I think the balance of rights and obligations would be a very important thing.”
Setting on the path towards a Norwegian-style status does not require any change in the Brexit 585-page withdrawal treaty or the non-binding political declaration, which leaves Briain’s options open. The EU would be ready to craft new language on EEA-EFTA membership to help the UK government, if necessary.