Brexit: what is the Norway-plus model?

Scenario of UK joining European Free Trade Association gaining traction within Parliament

(Image credit: Getty Images)

As MPs look for a way out of the Brexit impasse, attention has turned to some of the options originally dismissed by Theresa May’s government.

The idea “that appears to have most chance of securing majority support” is the so-called Common Market 2.0 or Norway-plus model, which is the brainchild of the Tory MPs Nick Boles and Oliver Letwin and Labour’s Lucy Powell, says The Times.

The model’s chance of success has increased dramatically as reports suggested Jeremy Corbyn is preparing to whip his MPs to back the option during the indicative votes process.

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Under this scenario Britain would retain membership of the single market by joining the European Free Trade Association (EFTA) while signing up to a new customs union with the EU.

The MPs promoting it “say it would go back to the sort of economic relationship the UK had with the European Economic Community in the 1970s and 80s, without having to be involved with closer political union or the direct involvement of the European Court of Justice”, reports the BBC. Its proponents add that it would solve the Irish border question and allow free trade in goods and services to continue.

The model has also gained the support of business leaders, with the Financial Times reporting that a new survey by the Institute of Directors found that “six out of 10 business leaders want MPs to back a Brexit deal that would see the UK closely aligned to the EU’s single market in goods and services”.

But critics say that, unlike in the original Common Market, the UK would have no votes on rules governing large swathes of the economy and all international trade. “Far from taking back control, Britain would be giving up control,” says The Times in an editorial condemning the option. “With the perception that Britain had insufficient say over EU rules as a member, it is hard to see how Common Market 2.0 could ever be a stable solution,” says the newspaper.

So what is the Norway-plus model?

Since the EU referendum in 2016, Norway’s deal has been discussed as one possible solution to the issue of Brexit. Norway is not a member of the European Union but is a member of the European Economic Area (EEA), which means that it is also part of the single market.

So “it’s about as close to the EU as you can get without being a member state”, explains the BBC. In practice, Norway has full access to the single market, and very limited barriers to trade with the EU.

However, in return, it has to make substantial contributions to the EU budget, and to follow most EU rules and laws including the four freedoms: the freedom of movement of goods, services, capital and people.

Under the model, while the European Court of Justice (ECJ) would have the deciding say on single-market matters that would still be relevant to the UK, the court “would no longer have direct powers to rule on matters of European law arising in the UK”, says the BBC.

Any legal action thereafter would be in the EFTA Court, where British judges are likely to make up a higher proportion of the bench than they do on the ECJ.

This means that “the caricature that Britain will be a mute rule-taker as a non-EU EEA member is thus simply inaccurate”, says Dakis Hagen QC in City AM. “The UK would enjoy within the EFTA pillar of the Single Market the majority of EU economic benefits, while witnessing a substantive repatriation of sovereignty”, he writes.

So will it happen?

Should Parliament coalesce around the model as the best Brexit option during the indicative votes process then it looks increasingly likely Theresa May will have to act on that decision.

But there remains a degree of uncertainty as to whether the plan is workable. According to a motion on the model laid by Boles after consultation with the Labour frontbench, under the Norway-plus plan the customs arrangement between the EU and the UK would be “comprehensive” and would only be superseded when “alternative arrangements that maintain frictionless trade with the EU” have been agreed with Brussels.

But having that sort of customs arrangement “would be against EFTA’s current rules”, says the BBC.

Any plan to join EFTA “would require the consent of its four members as well as the 27 EU members”, adds The Times.

In December, The Guardian reported that senior Norwegian politicians had attacked the idea as “neither in Norway nor the UK’s interest”. Iceland’s PM also said earlier this month: “We’re members of the four freedoms, people, movement, services and all that. I don’t know if that’s the right solution for the UK.”

But some EU leaders “have appeared to nudge Britain towards the model”, says The Independent. After celebrating the EEA’s 25-year anniversary, Irish prime minister Leo Varadkar tweeted: “Good to meet up with the Norwegian, Icelandic and Liechtenstein prime ministers. All in the single market for 25 years but not in the EU. Sensible solutions are possible once red lines don’t restrict them.”

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