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New study – the Norwegian model is a viable Brexit option

Jonathan Lindsell, 13 February 2015

Norway is not in the European Union. Instead it is part of a wider group, the European Economic Area (EEA), which permits it free trade with EU countries but allows it to avoid the Common Agricultural Policy, control its own fisheries, and pay a much smaller membership fee. Unlike EU members, it can negotiate its own free trade agreements with countries around the world, with its own priorities.

Eurosceptics, however, tend to dismiss Norway as a model for Britain to replicate if it leaves the EU. In 2013, while announcing his strategy to renegotiate Britain’s EU membership and then put the result to a referendum, David Cameron dismissed Norway: ‘[W]hile Norway is part of the single market – and pays for the principle – it has no say at all in setting its rules: it just has to implement its directives.’

My research for Civitas, looking at Norwegian state publications and research from some of its parties, undermines this contention. Norway does not have formal votes in the European Parliament or Council, that much is true. However it does have a veto – something full members lack on many topics. It has exercised this power, and Brussels seems to respect it.

Oslo can also push for adaptations and exemptions from harmful clauses in EU law, and can contest the details of implications through a separate court. Only directives and regulations that apply to the ‘single market’ are implemented in Norway – others can be rejected. Representing itself at global bodies like the World Trade Organisation, it can help set the regulatory agenda before the EU even considers some laws. All of that said, pro-Brussels governments in Oslo have often been quick to comply with EU regulation, and have not tested the veto fully. Christopher Howarth shows that, while arguments could be made that Norway adopts anywhere from 9% to 75% of EU law, it’s certainly true that they adopt less.

The EEA arrangement allows Norway to win its own trade deals, rather than having to follow the EU’s cumbersome priorities, as Britain does. Critics suggest that small countries outside continental economic blocs do not have the importance to win substantial tariff reductions, but this is highly suspect. Both Iceland and Switzerland have the same trade outlook as Norway, and they have each concluded landmark free trade deals with China – a larger market than any country with which Brussels has partnered.

The Norwegian option is also criticised for including EU free movement rules – for immigration. In fact, the EEA’s rules include provisions for suspending free movement in social or economic emergencies. Norway hasn’t used these, instead focusing on integration and language help, but Iceland exercised the same powers to stop capital flight during the recession and the EU respected the action.

Opting for the Norwegian model presents a way to leave the European Union while retaining many of the benefits, and keeping substantial influence. Britain is a much larger economy than Norway, and it is reasonable to expect Westminster’s diplomatic clout would be considerably larger, even after leaving.

The full study, ‘The Norwegian Way: A case study for Britain’s future relationship with the EU’ can be accessed here.

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