EEA/EFTA Based Brexit

The EU Withdrawal Bill is expected to return to the Commons on Tuesday 12 June. As you know, the Lords passed a number of important amendments. Those amendments include membership of a customs union and UK membership of the European Economic Area (EEA).

Click here for a briefing with useful information about the EEA and EFTA.

An EEA-based Brexit still appears to be the only realistic option that can simultaneously respect the democratic EU referendum, maintain economic stability and re-unite our divided country. It is currently the only Brexit option that that can meet Labour’s six tests, and failing to back the amendment will surely increase the risk that this incompetent government will lead us towards a bad trade deal – or worse still a no-deal cliff edge.

Here are some of the most salient points in the briefing:

  • A customs union only covers goods, it would not cover our services sector which makes up 80% of our economy. A customs union alone would also not fully address the Irish border question. The combination of EEA and customs union is therefore essential.  
  • The EEA / EFTA option offers the possibility of unilaterally reforming the operation of any of the four freedoms, including the free movement of labour, through articles 112 and 113 of the EEA Agreement.
  • EEA / EFTA membership means paying only for what is accessed from the Single Market.
  • EEA / EFTA states are subject to the jurisdiction of the EFTA Court, which is an independent chamber that frequently diverges from the rulings of the European Court of Justice. EU law does not have primacy in the EEA/EFTA states.
  • EEA / EFTA membership gives significant rule shaping as well as veto powers to members with respect to the rules that govern the portions of the Single Market that are relevant to the EEA Agreement.
  • EEA Membership would not prevent governments from nationalising industries if desired: Norway has a nationalised railway system and spends well above the EU average on state aid.
  • The UK would have significant influence within EEA / EFTA, not only in terms of the functioning and policy of the institution itself, but also in terms of its relations with the European Union and other trading partners.
  • The EEA / EFTA is an off the shelf, ready-made package that is well understood, providing business, consumers and citizens with the certainty and stability that is so urgently required.

As you will know our front bench yesterday tabled an amendment to the Lords amendment. The objectives outlined in the front bench’s amendment are certainly ambitious. However, the chances of any British government being able to negotiate a new, bespoke form of “full access to the internal market” and create a new, bespoke set of “shared institutions and regulations” at this very late stage in the process, when we have so little leverage, are slim at best. The advantage of the Lords amendment is that it provides the certainty and realism of a well established and well understood model.

Another concern with the front bench amendment is that it does not set out any conditionality around the issue of free movement of labour (FoM), whereas articles 112 and 113 of the EEA Agreement provide a solid, treaty-based mechanism for the unilateral suspension and reform of FoM. This again underlines the benefit of committing to a model as opposed to attempting to start from scratch.

Finally, on the parliamentary arithmetic. Wide-ranging conversations across the PLP indicate very strong support for the Lords amendment, and experience has demonstrated that it’s far more likely that pragmatic Conservative MPs will back an amendment that's come from the back-benches. Of the two amendments, the Lords amendment is therefore the only one that has a fighting chance of commanding a parliamentary majority. So, this could well be our last chance to legislate against this government’s reckless and incompetent approach to Brexit, and we should seize it. Let’s not let the hard Brexiteers off the hook!