Britain can use EEA as comfortable waiting room before Brexit

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Financial Times

The debate about what sort of Brexit the government should be seeking to secure has generated a tremendous amount of heat but not a great deal of light. Hard, soft, car crash, red white and blue — you name it, the list of random adjectives used to describe the type of departure from the EU is long. So, perhaps now would be a good time to remind ourselves of three vitally important facts.

First, the scope of the negotiations that will define the terms of Britain’s withdrawal from the EU in March 2019 is narrow and focused on three key items: settlement of financial liabilities, clarification of the status of citizens and resolution of the Irish border question. The negotiations are taking place on the basis of Article 50 of the Lisbon treaty, so ratification is only required by the European Council and the European Parliament.

Second, the scope of the negotiations defining the “Comprehensive Trade and Partnership” deal that will shape the terms of the UK’s relationship with the EU for decades to come is far broader. Those negotiations will cover everything from trade to migration and architecture of the UK’s relationship with the inner workings of the EU. They will begin in earnest in the late spring of 2019, once Britain has left. And they will take place on the basis of Article 218 of the Lisbon treaty, meaning ratification is required by the European Council, European Parliament and the 35 national and regional parliaments of the EU member states — from Paris to Prague, Warsaw to Wallonia.

Third, the government’s attempt to persuade the EU to conduct these sets of negotiations concurrently has failed miserably, which was always a foregone conclusion. Why would the EU agree to conduct post-withdrawal negotiations with a member state that has not yet withdrawn? David Davis, the Brexit secretary, said this would be “the row of the summer”. But it barely lasted beyond lunch on the first day of formal negotiations. It is unclear why any time or energy was expended on pushing for concurrent talks, particularly when the UK knows that the only sound that Michel Barnier, EU chief negotiator, hears is the tick-tock of the Brexit clock.

Against this backdrop has been the realisation that the government must urgently focus its attention on building a bridge between the withdrawal (Article 50) and final-state (Article 218) stages of Brexit. Failure to do so would see the UK crashing out in just over 18 months time. Theresa May, UK prime minister, and most of the cabinet have recognised this reality. Having established that securing a time-bound transition deal is imperative, the question then is what form such a deal should take.

The simplest option is for Britain to transition into the European Economic Area (EEA) — a free-trade bloc between the EU, Norway, Iceland and Liechtenstein that provides unfettered access to the single market. It is a well-established and well-understood arrangement that offers the clarity and stability that the British economy needs in these turbulent times. Crucially, the EEA allows its members to reform freedom of movement. If the UK were to leave the EU and join the EEA in March 2019 then the government could, if it wishes, invoke Article 112(1) of the EEA agreement, which allows for the unilateral establishment of a quota-based immigration system structured around regional and sectoral criteria.

The EEA is also not subject to the European Court of Justice, instead it adheres to rulings of the EEA Joint Committee and the EFTA Surveillance Authority and Court, which regulate the internal market and have a more flexible approach to national interpretations of the rules for the single market than the ECJ.

An end date for any transition deal is vital, meaning that the UK should not be seeking membership of the EEA for more than the time that it will take to negotiate and ratify the trade and partnership phase of Brexit. EEA membership must be seen as a well-established and relatively comfortable waiting room in which we can sit for as long as it takes the government and its counterparts to negotiate a long-term deal.

The country is crying out for clarity and certainty on Brexit and the message from the general election was clear: people want a bridge, not a cliff edge. We should be building a coalition of common sense to secure an EEA-based transition deal that will carry the UK safely to the other side.