Britain eyes Norway, Switzerland and Canada as post-Brexit models

If British voters opt to leave the European Union, their government would have to redefine its trade ties with the bloc.

The Brexit camp, which has campaigned for an end of EU membership, and the camp that wants Britain to stay in have debated whether Norway, Switzerland or Canada could be models for how to keep close ties with the EU without being a member.

Economists and political scientists have pointed out that in all these scenarios, Britain would still have to follow a significant number of EU rules in return for favourable trade conditions.

THE NORWAY MODEL: The Scandinavian country has close ties with the EU as both sides are part of the European Economic Area (EEA), also known as the European single market.

In order to profit from this relationship, Norway has to accept the principle of free movement of workers and services with the EU.

In addition, the oil-rich country has to support the EU's 15 poorest members with 388 million euros (439 million dollars) per year.

"Becoming part of the EEA would not generate substantial fiscal savings for the UK government," Swati Dhingra and Thomas Sampson of the London School of Economics concluded in an analysis.

Despite these concession, Norway does not have any say in EU decisions and legislation.

An expert report commissioned by the Norwegian government in 2012 found that "although Norway takes a keen interest in the EU, that interest is not fully reciprocated."

THE SWITZERLAND MODEL: The small but wealthy country has taken a different approach by concluding 120 agreements with the EU on access to various markets, services and education.

Like Norway, Switzerland is obliged to implement various EU norms and to pay financial contributions to reduce economic disparities within the 28-country union.

Switzerland does not have full access to the EU financial services market, even though banking is a major sector of the Swiss economy.

Therefore, Swiss banks have set up operations in EU financial centres like London.

In case of a vote for Brexit, British financial institutions might also have to shift operations to Ireland or to financial hubs on the continent.

The case of Switzerland shows how difficult it is to maintain such an intricate web of treaties, according to Sabine Jenni, a political scientists at the ETH Zurich university.

"The Swiss relationship with the EU is a patchwork established in long rounds of diplomatic negotiations and requiring constant reparation," she wrote in a commentary.

The Swiss government has been trying to negotiate immigration limits for EU citizens, but the talks are stuck as the EU has refused to start talks on the matter.

THE CANADA MODEL: The EU has recently negotiated a free-trade deal with Canada that is more comprehensive than any other such agreement that the bloc has concluded.

Once the deal comes into force, it will remove nearly all tariffs on industrial, agricultural and fishery trade.

Also on the upside, Canada is not obliged to contribute to the EU budget.

"But arguably the biggest challenge the EU-Canada deal poses as a potential model for UK-EU relations after Brexit is that it only grants limited services liberalisation," said Vincenzo Scarpetta, a policy analyst at the Open Europe think tank in London.

Canada's relationship with the EU is therefore "by no means comparable to being a member of the single market," he wrote in an analysis.

Last update: Fri, 24/06/2016 - 08:49
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