Brexit does not have to mean the end of the UK’s relationship with emerging Europe

The UK is unlikely to ever rejoin the EU, but there are alternatives to full membership that Britain’s progressives should now explore. In the meantime, we need to define the relationship the UK will have with emerging Europe over the next decade. Ideally, this will see Britain back in the single market by 2030.

Brexit is done. Since January 1 this year, the United Kingdom – which officially left the European Union on January 31, 2020 but had remained in a kind of halfway house while a final trade deal was negotiated – has no longer been a member of the EU single market and the customs union. The EU’s four freedoms – the free movement of goods, services, capital, and people – no longer apply to the UK.

History will decide whether it was the right thing to do. Right now, it feels like the most serious wound any country has ever inflicted upon itself.

Moving on

That the 2016 vote which brought Brexit about was won on a web of lies and deceit, and not a little racism towards Eastern Europeans, is beyond the scope of this piece, and to be perfectly honest, should no longer be of any interest to us (except to ensure that they are never again never allowed to dominate political discourse).

Instead, pro-Europeans should move on, look forwards, and begin planning a route back to Europe.

Not, however, in the form of EU membership. Though it pains me to admit as much, we need to recognise the fact that the UK will never rejoin the European Union, at least not in my lifetime. To rejoin would mean doing so on the same terms as any new member, such as the obligatory adoption of the single currency and membership of the Schengen area: two things unacceptable even for many remain supporters in Britain.

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Were the UK to rejoin the EU it would not get back its Common Agricultural Policy (CAP) rebate, nor its many opt outs of various pieces of EU legislation (and there were many: it really has been forgotten that the UK enjoyed the best of both worlds while an EU state, able to pick and choose the bits of Europe it liked while ignoring others. No member state will ever again be in such an enviable position).

That the prospect of rejoining the European Union is a non-starter does not mean, however, that pro-Europeans in the UK should give up. There are alternatives to full membership.

The Norway model

The simplest of these is what, in the months that immediately followed the Brexit referendum, became known as the Norway model.

The Norway model includes two key European organisations: the European Free Trade Association (EFTA) and the European Economic Area (EEA). Norway, along with Liechtenstein and Iceland, is a member of both.

EFTA is made up of the aforementioned three countries, plus Switzerland. They trade between themselves while the group as a whole has free trade deals with numerous non-EU countries, including Canada and Mexico.

The EEA, on the other hand, is a collaboration of all EU member states plus three EFTA states: Norway, Liechtenstein, and Iceland (who are major investors in progressive civil society movements in emerging Europe, via EEA Grants). All EEA members enjoy full access to the European single market, including the four freedoms. Norway (as well as Liechtenstein, Iceland and Switzerland) are also members of Schengen.

EEA membership is available to either EU or EFTA member states. Britain, now outside the EU, would therefore have to join EFTA to become a member of the EEA.

Although hardline Brexiteers would no doubt label this as “rejoining the EU via the back door”, the benefits of EEA – but not EU – membership are many.

While the UK would regain full access to the single market, it would not be forced to sign up to some of the EU’s policies that are less palatable to the Eurosceptics.

It wouldn’t, for example, be required to rejoin the EU’s Common Fisheries Policy, meaning that the fishing deal so hard fought over during Brexit negotiations could remain in place. It would also be exempt from the CAP, while the European Court of Justice – hated by Brexiteers – would also have no jurisdiction in the UK.

There are drawbacks of course. Norway makes substantial contributions to the EU budget, has to follow most EU rules and laws, but has no formal say in making those rules and laws because it has no representation in any of the main European institutions.

Nevertheless, so attractive is the Norway model that in 2018 a report commissioned by the UK government itself (then led by Theresa May) found it to be the least damaging form of Brexit for the UK economy.

If the UK at that time had been blessed with both a competent prime minister and a competent leader of the opposition, the Norway model might well have been the option the UK chose to take.

Alas, the UK had neither a competent prime minister nor a competent leader of the opposition.

Scotland

Then there’s the Scottish question.

An election later this year will likely see the pro-independence Scottish National party (SNP) win a healthy majority in the Scottish parliament, campaigning on a promise to restore Scotland’s membership of the European Union (in 2016 more than 62 per cent of Scots voted to remain in the EU).

The SNP will use that majority to demand a new independence referendum that the government is unlikely to grant. However, although a new UK-wide general election is still almost four years away, a hung parliament – with the SNP holding the balance of power – already looks the most likely outcome. An independence referendum will be its price, a referendum that – if nothing changes – it is likely to win.

The UK’s progressives should therefore begin planning the country’s re-entry into the single market. Not only will it boost the UK economy and restore historic connections with Europe, it might also help to keep the kingdom united.

Until then, however, we need to work with what we have: a bare-bones trade agreement that is already causing businesses huge problems. Some EU online retailers have said they will no longer deliver to the UK because of tax changes which came into force on January 1, while international shipping companies including Federal Express and TNT have said they are levying additional charges on shipments between the UK and the EU.

Nor does the trade deal cover services, which are to be dealt with by a separate process. UK financial services firms have lost their “passporting rights” which allowed them to sell into the EU from the UK without the need for additional clearance.

Instead, they now have to comply with the requirements of individual states, or hope for “equivalence” decisions whereby the EU will unilaterally grant approval to the UK and its financial services firms.

It is likely to take many months, perhaps years, for a services agreement to be put in place.

Then there is data: the trade agreement contains some provisions, including a ban on localisation requirements, commitments to protect personal data, support for electronic signatures and continuing to provide open government data. There is also a separate bridging agreement which will maintain personal data flows from EU to UK for up to six months until an adequacy decision is reached. But what happens if no decision is reached?

Emerging Europe and the UK: Towards 2030

Over the next few months Emerging Europe will be discussing the UK’s future relationship with Europe — with the emerging Europe region in particular — as part of a major new project: Emerging Europe and the UK: Towards 2030.

Together with key stakeholders from across emerging Europe and from the UK, will be looking at all of the problems I have raised, but also the opportunities, such as countries offering UK businesses a foothold in the EU, or countries in emerging Europe outside of the EU which can now strike individual trade deals with the UK

Brexit does not have to be the end of the UK’s relationship with emerging Europe, and the region remains open to collaboration across a broad range of sectors.

The biggest question, perhaps, is how open is the UK? Was all that talk of a ‘Global Britain’ hogwash?

We are about to find out.

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