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Should Britain adopt the EEA option?

My friend Preston pointed me at what the Adam Smith Institute calls the “EEA Option”, which would apparently provide many of the free trade and movement benefits of EU membership without being in the EU or beholden to most of its rules.

Certainly worth a read as people start contemplating what one would want the negotiated exit from the EU to look like.

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42 comments to Should Britain adopt the EEA option?

  • Johnathan Pearce

    Yes, certainly for an initial period to calm everyone down.

    Longer term, I like Jim Bennett’s Anglosphere idea.

  • Perry Metzger (New York, USA)

    It would be wonderful to have a free trade and migration area for the Anglosphere. That is not incompatible with the EEA of course, one can have both simultaneously, though it was incompatible with the EU.

  • PeterT

    Perry, any chance you could ask your friend Madsen Pirie why the ASI are essentially “stealing” Richard North’s Flexcit proposal (which involves EEA membership in the short term)? I don’t mean that to sound rude at all; just genuinely interested and also keen for Flexcit to get the attention it deserves, given it is the only highly detailed plan for exit (its available online) that is currently available (I believe).

    Whilst I would not say I am a ‘flexcit’ true believer exactly, it seems very daft to ignore a detailed plan which could calm everybody down almost instantly.

  • PeterT

    Sorry that was meant for PdH, not PM

  • CaptDMO

    So…
    Friends with benefits?
    “Right to work” dues?
    Separate, but equal?

  • Perry Metzger (New York, USA)

    PeterT: That wasn’t ambiguous. The local convention is that PdH is “Perry” and I’m “The Other Perry”.

  • I think Britain should adopt the ASI’s EEA Option (similar to “Flexcit” I grant, but more descriptive and easier for people to understand). We’ve written a blog post publicly supporting the EEA Option.

    Anyone else who runs a British corporate who agrees with this position to also publish in support of it, ASAP, in order to get some early support across to Hannan and Carswell (both of whom have hinted at this as a possibility) and to show that it is viable.

  • I’m all for the free movement of goods and people but I can’t see it washing with the great unwashed.

  • The Fyrdman

    This needs to be the route taken initially. The only question on the ballot was in or out of the EU, not restricting free movement. The Tories could argue this is the holding measure until the election, at which point each party takes the option it prefers. Hold off that election for a couple of years of EEA restoring normality to let people see stability come back. Hopefully Labour will still be Corbyn/meltdown to encourage all of the middle road to go Tory, denying labour or UKIP a chance to forward a protectionist model. Once we’ve had time to build up our framework outside the EU options outside the EEA become viable, but till then it’s the best option.

    Moreover, that would suit a plurality of people, enough of the remain and leave camp to create a new normality.

  • Mr Ecks

    Whoops–Goods are no problem

    People depends on which people. People in modest numbers–ie thousands not hundreds of thousands or millions-who have skills and evidence of good character– fine.

    18-30 rapey yobs badged up as EU citizens by Germany and migrating here to “Treasure Island”–No. Of course it is supposed to take 8 years for them to become EU citizens. But to believe it will stay that way is somewhat naïve.

    Like wise large numbers, as in ANY, Merkel-deal Turks–No also.

    And mass numbers of any other kind from anywhere–No.

  • Jim

    My biggest question regarding the EEA is whether the UK can discriminate between UK citizens and non-citizens over access to benefits/State services if we are in the EEA?

    Because it seems to me the biggest draw the UK has is not just the availability of higher paid work than in the immigrants home country, its the ‘free stuff’ that we give to not only citizens but also to many if not all immigrants as well. If there was complete freedom of movement of labour into the UK, but those migrants had to support themselves with zero UK State support (pay for healthcare/education/housing) then the draw of the UK for migrants would be considerably reduced, to a trickle one suspects.

    Regardless of whether such a policy is desirable, is it legally allowed within the EEA?

  • Cal

    “Regardless of whether such a policy is desirable, is it legally allowed within the EEA?”

    The short answer is that the EEA requires free movement of people, and that means that government still has to treat EEA non-nationals the same as nationals when it comes to welfare:
    http://ukandeu.ac.uk/as-free-as-norway-after-brexit/

    Howwever, the UK government has previously tried to remove some access to benefits. It only had limited success though:
    https://www.freemovement.org.uk/removal-entitlement-housing-benefit-eea-jobseekers/

    It’s not a cut-and-dried matter. But generally the answer seems to be that being in the EEA will prevent you from limiting access to welfare in any significant way.

  • Cal

    The EEA option isn’t bad — it’s certainly a lot better than being in the EU. But it does nothing to allow us to control immigration, and still involves paying in a lot of money, so it doesn’t really address the issues that won the referendum for Leave. But many in the Leave campaign, plus Richard North, who has the only detailed plan around (Flexcit), prefer this. I’d prefer to see us just do our own trade deal with the EU. We have two years. If we can’t get what we want, we could always join the EEA (which I expect wouldn’t be a problem to do) and work on changing things later.

    The points immigration system that Johnson and Gove mentioned isn’t possible in the EEA.

  • Cal

    Seems to me that the EU is a lot like the NHS. All its defenders go on about how it’s the envy of the world, but you notice that nobody else copies it.

  • Mr Ecks

    Then EEA is not acceptable.

    Under EEA if the Turks join the EU we are back to square one. If Germany still continues its migrant insanity then there is nothing to stop vast numbers bringing us the benefits of fecund medieval barbarism.

  • PeterT

    Under EEA we could apply an ’emergency brake’ on immigration. This does not require permission from the EU. Lichtenstein did so and have a quota/points system for immigration in place. The best option would be to join the EEA and apply the emergency brake immediately, with the reason being given as our resources being under strain etc. I think this would be fair. The UK has the unique ‘problem’, well not quite unique, that it is the only major country in Europe where the local language is the global one. We may not be able to apply the emergency brake forever, but after a few years (5-10) it is possible that either the EU won’t exist, or we have got used to this crazy independence notion and then leave the EEA.

    It will take time to join the EEA too, so joining it for two years then leaving is a non starter. After we have joined we would stay for a minimum of 5 years I imagine, possible 10, possibly forever.

  • Jim

    “The EEA option isn’t bad — it’s certainly a lot better than being in the EU. ”

    How precisely? If you still have to pay in, you still have to accept the acquis communautaire, you still have to have free movement, whats the advantage over what we have now?

  • Cal

    How likely do you think it is that this ’emergency brake’ tactic would work?

  • Mr Ed

    So being in just the EEA helps your football team.

  • PeterT

    Cal, there is a legal precedent (Lichtenstein), and all we really need is to apply it for 5 years. Then we could probably extend it. In addition we could apply it indefinitely for new members (i.e. Turkey and Albania being the chief concerns). Say we manage to ‘string them along’ for 10 years. That should be enough to develop an alternative trading arrangement. But in fact, once in EFTA, that would bring serious clout to that organisation. Furthemore, once other countries see that it is possible to leave the EU they will be seriously tempted. Ultimately, we could get rid of the freedom of movement altogether, which would allow it to be extended to non EU countries, including developing world ones. It is a sad fact that freedom of movement does not work, when traversing the globe has become as simple as it has, whilst there is still a huge global disparity of wealth.

    For reference, the Flexcit bible says:

    For instance, the right of residence to citizens of EU member states for more
    than three months is conditional on those citizens being economically selfsufficient.
    Those who are not can be deported under existing EU law.
    Additionally, within the EEA – if we take this route – there are the “safeguard
    measures” which permit the EFTA states unilaterally to take action if “serious
    economic, societal or environmental difficulties of a sectoral or regional nature
    arise and are liable to persist” as a result of excessive migration.

  • PeterT

    Jim, we only have to abide by a fraction (25%) of the EU laws. Of those we would have to apply to half even outside the EEA, as they are global rules.

    For me, apart from wiping the smile of Cameron’s face, the main benefit must be that we make our own laws again and the European Court of Justice loses its jurisdiction over us.

  • Cal

    That all sounds good. I don’t know how easy it will be in practise, and I’d still rather we went for our own trade and immigration deal, but if we get stuck with the EEA then that is what we should do.

    >We may not be able to apply the emergency brake forever, but after a few years (5-10) it is possible that either the EU won’t exist, or we have got used to this crazy independence notion and then leave the EEA.

    Yes, 5-10 years will be more than enough. I can’t see the EU existing by then, at least not in its current form, and I think you’re right about having got used to independence by then.

  • Paul Marks

    I see no good reason to accept EEA status.

    German and other E.U. companies sell British customers vastly more than British companies sell to German and other E.U. customers.

    The German government (which is what the E.U. really is) has a weak hand.

    Their only real card is the possibility of weakness in the British establishment.

    That is why the present struggle in the Conservative Party is so important.

    A weak (or worse) Prime Minister (or Chancellor or Foreign Secretary) could ruin everything.

  • PeterT

    Paul, I’m sorry but I find that simplistic, not to mention time consuming and risky. But mostly I find most of the objections to the EEA weak. The best approach now is to secure this victory by committing to the EEA route, by some vote in parliament, and once that is done trigger Article 50.

  • Cal

    Andrea Leadsom could be a contender for the Conservative leadership. She was pretty impressive when I saw her on TV a few times arguing for Leave. She looked to have a spine. And she’s not Boris, for those Remainer Tories who can’t stomach the idea of him in charge, and those Leaver Tories who don’t trust him not to shift with the wind.

    Today she has tweeted:

    “Free trade with the EU will be in all our interests. But essential we agree free movement no longer applies to UK. Confident we can do this”

    and

    “We must now develop a points based system for those who want to come to UK – fair to all the talents across the world; but also to our own!”

    That seems to point to a non-EEA solution (or else the Liechtenstein option).

  • Cal

    Richard North has a new post up explaining the Leichtenstein option:
    http://eureferendum.com/blogview.aspx?blogno=86122

  • Lee Moore

    A far as I’m concerned, the EEA route is an acceptable staging post to minimise short term disruption. But since the Single Market includes social policy, inc the infamous working time directive, the EEA is not acceptable long term.

    By all means let’s escape without overturning the longboat in all the excitement. But once we have rowed clear, let’s set our own course.

  • Jacob

    Why get into the straitjacket of EEA at all?
    Could not Britain declare free trade and free movement of people for all (EU or not)?
    All countries that wish to reciprocate and do the same – welcome. Those who don’t are mostly hurting themselves only.
    Wouldn’t that serve Britain’s interests best?

    All this charade of WTO, and regional trade agreements with thousands of pages of regulations is only a make-work scheme for bureaucrats.

  • Jacob

    By the way, we need to talk more about the real Brexit – the football (soccer) Eexit – England being kicked out of the Euro championship by Island.

  • Agammamon

    Doesn’t joining the EEA put you in the same position regarding immigration as you were/are with the EU?

    So, you get a free trade area and someone else still gets final say on immigration matters? How is that an improved position?

  • Perry Metzger (New York, USA)

    “Agammamon”: You get an “emergency brake” on immigration the EU does not offer. Payments to the EU are vastly lower (I think it’s something like half). You only have to adopt about 20% of the normal EU legislation will never be required to “harmonize” things like budgets and taxes. You can open free trade agreements with any country you like without EU permission (though that requires strict country of origin control when you then export things to the EU) — this would give time to do things like creating free trade agreements with the rest of the Anglosphere and the Commonwealth before taking any future action. In general, EEA membership provides a nice intermediate state in which you have freedom of action to plan and negotiate, far fewer obligations, and still have access to the common market.

  • Watchman

    On free trade I think Jacob has it – declare free trade (since putting up tarrif barriers is expensive to consumers and distorts markets) and point out to everyone else we are happy to sign anything they want (subject to reading it first) to allow them to have free trade as well.

    Whilst I’d personally support the same for free movement, I am not sure how this can be argued at present – perhaps an alliance of the majority of leavers (those not obsessed with immigration) with the more sensible liberal remainers?

  • Perry Metzger (New York, USA)

    Watchman: how about a new and much more pragmatic international group?

    My proposed rules for the “League of Free Trading States”:

    0) Any country can join by signing the treaty. No restrictions.

    1) You must alter your laws to allow fully unilateral free trade. Unilateral free trade means:
    a) “Someone can sell any foreign originating good or service in your country on the same basis as any locally originating good or service, without tariff or restriction — if it is legal to make and consume locally, it is legal to import and sell locally”. That even applies to countries of origin outside the club.

    b) “Someone can export any locally originating good or service to foreign countries without tariff or restriction — if it is legal to make and consume locally, it is legal to export to anyone who wants to buy it.” That even applies to destination countries outside the club. The only exception is you can refuse to allow export of things like weapon systems and other military tools if you wish.

    2) If you’ve been a member of the bloc for some period of time (say ten years?), your people can freely travel to any other member of the block to live, work or go to school, but such a person is not entitled to any local government benefits unless they follow whatever the local country decides the rules are for getting benefits — the country is under no obligation to pay for anything under the treaty. Perhaps they decide you have to become a citizen, perhaps they’re more generous, perhaps there is no way at all, but it is up to them. However, they can’t stop you from coming to work or study or what have you (though they might make you pay for school if the locals get that for free). The ten year rule is so that basket case economies get a while to stabilize before their citizens start flowing out in all directions. It’s designed to deal with arguments about “they’re too poor so half their population will want to leave”. Note the ten year rule only applies to migration under the treaty — any country can set up more liberal rules or bilateral agreements with whatever country they like, this just a baseline if you’re a member of the club.

    The League of Free Trading States would have no dues and no bureaucracy, just a common treaty defining the rules. It would be short, no longer than a dozen pages. If two countries have a dispute about what the terms mean, there would be a provision for binding arbitration but no permanent organization to enforce it.

    I have no belief whatsoever that this would ever come to pass. Too many people hate simplicity and trade. But it would be cool if it did.

  • Thailover

    GB should seek to trade with any nation or group under the following conditions.
    (a) The trade proves to be of mutual ECONOMIC benefit (that is, mutually profitable), and can cease with no strings attached and no penalties at any moment. Trade should not be mixed with politics as politics, like religion, poisons everything.
    (b) The nation or group in question isn’t “evil”. Obviously no one should be bolstering the welfare of the Taliban or others whose long term goal is our utter destruction.

    As to “open” boarders, GB can do that anytime it likes, any way it likes with or without the consent or permission of other nations or groups.

  • Thailover

    BTW, as of now, the EU is pouting little snowflakes. Fuck ’em.

    When they come to their senses like nice little adults, which will be soon, they’ll realize that trade with the soon to be independent GB is necessary to at least slow down the eventual demise of their unionized shop. They need trade with GB far more than GB needs the good graces and blessings of the EU and their pouty spoild leaders. And if Pres Trump decides to stop shoveling truckloads of money into other nations and orgs like the IMF, well…there you go.

  • shlomo maistre

    Trade should not be mixed with politics as politics, like religion, poisons everything.

    In an ideal world, perhaps this would be true.

    But the simple fact is that though the UK’s trading policy may not be interested in politics, politics is almost certainly interested in the UK’s trading policy. And more specifically, as I have said before, if the UK really actually pursues to withdraw from the EU there’s a very good chance that the EU will seek to erect punitive tariffs or otherwise punish the UK for its actions.

  • Thailover

    Jacob wrote,

    “All this charade of WTO, and regional trade agreements with thousands of pages of regulations is only a make-work scheme for bureaucrats.”

    Indeed. Why anyone falls for that crap is beyond me.

  • Thailover

    shlomo said,

    “if the UK really actually pursues to withdraw from the EU there’s a very good chance that the EU will seek to erect punitive tariffs or otherwise punish the UK for its actions.”

    If the EU wishes to screw itself with a “protectionist” embargo-like tariff, they’re perfectly free to do so. That would be cutting off their nose to spite their face. But the SMART thing to do is to profit from comparative advantage and relatively free and unfettered trade. The rational point of trade is to economically profit from the trade, not to win points for fettering that trade, because not only do tariffs raise prices of imports (lessening supply relative to demand), it also raises prices of domestics in that same industry (increasing demand relative to domestic supply). In short, less competion results in higher prices for consumers, which means less productivity in the end. More economic restrictions means more poverty…just what Europe needs, right?

  • Nicholas (Unlicensed Joker!) Gray

    I have hoped for some time that true democracies could call themselves the Allied Nations, and form a trading alliance, with automatic preference for other members. This need not replace the UN, but act around it.

  • shlomo maistre

    Thailover,

    If the EU wishes to screw itself with a “protectionist” embargo-like tariff, they’re perfectly free to do so. That would be cutting off their nose to spite their face. But the SMART thing to do is to profit from comparative advantage and relatively free and unfettered trade. The rational point of trade is to economically profit from the trade, not to win points for fettering that trade, because not only do tariffs raise prices of imports (lessening supply relative to demand), it also raises prices of domestics in that same industry (increasing demand relative to domestic supply). In short, less competion results in higher prices for consumers, which means less productivity in the end. More economic restrictions means more poverty…just what Europe needs, right?

    lol

    I’m well acquainted with the benefits of free trade. That’s not at all the point.

    The people who run the EU DO NOT CARE ABOUT PROSPERITY. They really don’t care at all.

    They care about their power, their influence, their social status – and these derive from the EU remaining intact, powerful, and feared.

    If the UK faces no adverse consequences for actually exiting the EU (assuming the UK does so) then other nations will be further encouraged to Exit the EU. This seems like an unlikely potential sequence of events, but maybe I’ll be surprised.

  • Jacob

    “The people who run the EU DO NOT CARE ABOUT PROSPERITY. They really don’t care at all.
    They care about their power, their influence, their social status – and these derive from the EU remaining intact, powerful, and feared.”

    Yes, the EU is about command and control freaks. It’s about power. This is the crucial fact.