Tuesday, 14 June 2016

How a prime minister drowning in Brexit may yet turn to EEA-EFTA

This could be a game changer: Richard North outlines today in his EU Referendum blog the way the EEA-EFTA option would offer Britain the chance to stay in the Single Market, yet control EU immigration.

If Britain goes for a Leave vote on the 23rd, this becomes one very important piece of information. A panicked Cameron may realise that since he has been ordered by the voters to take the UK out of the EU, he must after all embrace the Norway Option he has denigrated throughout the campaign.

That, or face chaos.

So this little-known but enticing power for Britain to control immigration – yet stay in the calm waters of the Single Market – may suddenly start looking like a political lifeboat for a drowning prime minister.

What the EEA-EFTA option offers Britain – while EU membership does not – is control of immigration through a quota system.

This is not speculation. There is precedent for it. The details are in the link to eureferendum.com below, of how Article 112 of the EEA Agreement and subsequent decisions has allowed Liechtenstein to control the influx of EU migrants.

As North points out, the arrangement is effectively permanent.

Some of us who have been writing on this issue have pointed to Article 112 in the past, and explained the powers this gives any EEA member state who decides to use it. Just to remind, here is the text:

Article 112

1.If serious economic, societal or environmental  difficulties  of  a  sectorial  or  regional  nature  liable  to  persist  are arising,  a  Contracting  Party  may  unilaterally  take  appropriate  measures  under  the  conditions  and  procedures  laid down in Article 113.

2. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation.  Priority shall be given to such measures as will least disturb the functioning of this Agreement.

3. The safeguard measures shall apply with regard to all Contracting Parties.

So, a contracting party ‘may unilaterally take appropriate measures’ under procedures laid down in Article 113. Unfortunately for the contracting parties who are members of the EU as well as members of the EEA, the procedures say it is the European Commission who will take the action for them – which is no kind of unilateral action at all. 

Only Iceland, Liechtenstein and Norway have the power to act on their own initiative.

This power of initiating action of course covers more powers than just the power to control immigration. It covers among other things all Four Freedoms of the Single Market – the free movement of goods, capital, services and people.

About these Four Freedoms: what is notable here, besides Liechtenstein’s proven ability to control immigration while still being in the Single Market, is that Iceland, despite being bound by the EEA Agreement to guarantee freedom of movement of capital, unilaterally put capital controls in place in 2008 following the banking crisis (last year the Reykjavik government announced plans for loosening the controls -- its economy has recovered spectacularly).

Iceland could stop the free movement of capital because of Article 112 of the EEA Agreement and that key word, ‘unilaterally.’

Iceland has to report regularly to one of the joint EU-EEA-EFTA committees about why it was persisting with capital controls, but there was no doubt it has the right to suspend this ‘freedom.'

In 2015 I asked an official well-placed to know these things (he did not want to be identified) the following question: if Britain joined EEA-EFTA, could it make the argument that the pressures caused by migration on the NHS, schools, housing, transport and the rest amounted to a crisis so free movement of people had to be suspended for some months?

He replied: ‘It's true, you could do it.’

In short, the UK would have greater power to restrict the four freedoms as an EEA-EFTA member than it has now as a member of the EU.

Yet remember this. No matter how much of an improvement it would be for the UK to be in the EEA-EFTA than in the EU, it should still only be used as a half-way house to full independence.

However, Britain's position for securing a final agreement on control of borders would be stronger when the UK is negotiating from outside the EU, yet is still an EEA-EFTA member. 

In that position, Britain could use Article 112 to suspend free movement of people during the talks, yet still be a member of the Single Market. 

That would be an economically and politically comfortable place to stay until a final deal were struck for a fully independent UK.

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