Norway Plus? Or No Deal? Read below for an overview of the key economic issues facing Brexit talks. #explained
On Tuesday the 4th of December, MPs launched into 5 days filled with debate on the “meaningful vote” also known as the Withdrawal Agreement which will define the terms the UK will leave the EU on and their future relationship. The ‘proposed Brexit deal’ follows on from the Withdrawal Agreement passed in Parliament in June 2018. The ‘proposed Brexit Deal’ will then be voted by Parliament deciding the future of the UK and Brexit.
Currently, Theresa May has been parading her Brexit plan around the country in order to gain sufficient support from MPs regarding the vote on December the 11th. However, the only question arising seems to be how “heavily she will be defeated.” Unsurprisingly, May is unable to rely on the support from her own party as 45 conservative MPs have said that they were going to vote against the deal.
May is skating on thin ice. She will be relying on the support of the opposition as well as her ‘ally’ the DUP who usually helps the government pass legislation, however the Prime Minister may be facing a knife in her back with the DUP regarding concerns on the agreement: isolating Ireland (island) from the trading territory -- the “backstop” plan. Overall, it is assumed that May will not have the support of the majority to go ahead with the agreement leading to other possibilities being placed on the table.
Although Amber Rudd has been supporting the Prime Minister, she has suggested a “Norway Plus Agreement” as an alternative. For the Agreement to pass, May will need the majority vote of 320 MPs.
The Norway Model has been on the table since day one due to the sheer fact that this model would cause the least interruption to the UK’s trade relations with its closest neighbours. Norway has done this without being a member state of the EU by being a part of the European Economic Area (EEA), ie, part of the single market.
The EEA includes the 28 EU member states along with three additions: Norway, Iceland and Liechtenstein. Being in the EEA means that these countries are also part of the single market. In essence, the single market would make trade between France and the UK as easy as trade between London and Portsmouth through a set of rules. The single market allows the free movement of goods, services, people and capital between one EU/EEA member country and another. Obviously, there are differences between being part of the EEA and part of the EU; the three other additions are excluded from the “EU’s Common Agricultural/ FIsheries, Common foreign and security policy. Additionally, despite Iceland, Liechtenstein and Norway having to contribute to the EU budget, it is significantly less compared to an EU member contribution.
Despite the Norway model being an ideal solution, Norway is not part of the customs union* and if the UK were to adopt this model, this would result in a harsh Irish border (which is not desirable). To overcome this obstacle, the UK would need to be part of a “new customs union or an equivalent arrangement” hence paving the way for the Norway Plus Agreement.
Despite the UK being able to change its mind regarding being part of the Single Market until 2020, Theresa May has already said that the “UK will quit the EU single market and customs union.” By being part of the single market, the UK would not have control over its borders and immigration which seems to be a point of contention for the Prime Minister. Furthermore, with the UK abandoning the customs union, the UK will be able to carry out trade deals with other countries without having to address the customs union as the union “forbids members from negotiating trade agreements separately from the EU”.
The Norway Plus does not seem like a ‘Brexit’ to many hard-liners who feel that issues such as immigration are not being addressed through this agreement. Whether or not this model can still occur is debatable because, for the UK to emulate Norway, the UK needs to be part of EFTA. However, Lunde, MP of Norway’s Conservative Party had said that Norway wouldn’t permit the entrance of the UK; additionally, Norway has been telling the UK that the “Norway option is not an option for one and a half years,” which (fairly obviously) reduces the likelihood of this model.
However, if the pendulum swings and the ‘proposed Brexit Deal’ is passed through parliament, the UK parliament would “enshrine the final deal into law”. The Agreement would then be passed to the European Parliament to vote, and if the outcome is a success, according to the New Straits Times, the Agreement would be rubber-stamped by the ministers. This would finally allow the UK to leave the EU, triggering the ‘transition period’.
This is surely an exciting and turbulent period for the UK’s government having the whole nation and if I dare say so myself, the whole world on the edge of their seats. Be sure to keep checking back on yourscope.org for more information on this topic!
* Customs Union: The customs union is a trade agreement in which two or more countries decide against tariffs on goods from other countries in the union. Eg the UK and France deciding not to have tariffs on German light bulbs. Members also decide on a common tariff on imported goods from countries outside the union. Finally the EU customs union “forbids members form negotiating trade agreements separately from the EU".