On 8 May the UK’s House of Lords passed an amendment to require the House of Commons to vote on remaining in the European Economic Area (EEA), the possibility of Britain adopting the so-called ‘Norway model’ is back on the agenda of British politics. Here the authors of Squaring the Circle on Brexit: Could the Norway Model Work?, John Erik Fossum and Hans Petter Graver, give some background to Norway’s relationship with the European Union and reveal the truth behind some common myths about the Norway model.
While Norway has rejected membership of the European Union twice in referendums in 1972 and 1994, it has consistently sought as close a relationship with the European Union as is possible for a non-member. The core element of that relationship is the European Economic Area (EEA) agreement, which came into effect in January 1994, almost a year before the second referendum. This seamlessly ties Norway to the EU’s internal market without it being part of the supranational political union.
However, Norway’s experience shows how non-members of the EU must make difficult trade-offs between relative autonomy in decision- and rule-making and access to the EU’s internal market and other EU policies. Norway is frequently portrayed as a ‘rule-taker’ and there is no doubt that Norway’s inability to affect EU rule and decision making is - democratically speaking - very problematic.
A closer look at Norway’s experience reveals that in spite of this members of the EEA can still shape their socio-economic model and mode of functioning. In other words, how a country handles its relationship with the European Union matters. Norway has retained a well-functioning welfare state and high levels of trust in public institutions, helping to offset potential negative influences. This trust is crucial. Norway’s experience underlines that the issue is not simply one of mode of EU affiliation but the important left-right issue of choice of socio-economic model, which has significant bearings on the question of social justice.
Given these pros and cons, and the reemergence of the EEA as an essential aspect of the Brexit agenda, now is the time to unravel some of the myths around Norway’s relationship with the EU:
1. The ‘Norway model’ is an arrangement that just involves Norway
A core aspect of the Norway Model is, in fact, the European Free Trade Association (EFTA)-based EEA agreement [which was signed by Iceland, Lichtenstein and Norway and where all decisions are based on unanimity.
2. The Norway model is the EEA
The Norway Model is made up of 120 different arrangements and covers a far greater realm of issue-areas than just those regulated under the EEA agreement. Norway is an affiliated member of Schengen and asylum and police cooperation (Dublin I, II and III. Norway is therefore within the EU’s external border with responsibility for border controls. It has also signed agreements on foreign and security policy and participates in the EU’s battle groups).
3. The Norway model is more constraining than the Swiss model
Unlike Norway, the Swiss have opted to unilaterally adapt their legislation to be EU-compatible. The EU is unhappy with the Swiss arrangements. They will likely not be extended elsewhere.
4. The EU’s off-the-shelf arrangements for non-members are straitjackets that do not allow for the flexibility of a bespoke deal
The sheer range of affiliations under the Norway Model testifies to some flexibility and ingenuity, but there are limits, especially within the EEA agreement which is about common rules and equal conditions for competition. There is political will on both the EU side and the Norwegian side to maintain close relations, and that allows for a certain measure of flexibility.
5. The Norway Model does not allow for an independent trade policy
The EFTA states retained their freedom to decide their own trade policies towards third countries because they are not part of the EU’s customs union. Norway had with the EFTA countries in 2016 negotiated 27 free trade agreements, and negotiations with ten countries (including China) and regional trade blocks (MERCOSUR).
6. No deal is better than a bad deal
Theresa May has said on Brexit that no deal is better than a bad deal. The Norway Model, with all its challenges, has shown to Norwegians that having common rules and equal conditions of competition, and the equivalent means of enforcement, offers the certainty that is necessary for an open economic to function in today’s tightly interwoven Europe.
7. The Norway Model is deeply contested in Norway and is unlikely to receive majority support elsewhere
In fact, there always been a clear majority in Norway in support for the model it has adopted: there is little support for EU membership, and very little support for abolishing the EEA. There is a very strong sense across most economic sectors that assured EU access is vital for prosperity. 65 percent of Norway’s exports (excluding oil, gas and ships) go to the EU. Norway needed a Schengen association agreement (be within EU’s borders) in order to preserve the Nordic passport union which ensures free movement in the Nordic region.
8. The Norway Model is about rule-taking
There is no denying the arrangement is democratically problematic, but there is scope for local adaptation and flexibility. The Norway model reflects the complex nature of the EU, which combines a supranational core (the internal market) and a set of intergovernmental arrangements for handling matters of border controls, and security. There is more scope for bargaining in the intergovernmental realm, which the UK has experienced through its numerous opt-outs and opt-ins. The implication is that the EU is more likely to accept bespoke arrangements in the intergovernmental than in the supranational institutional realm.
9. The key question about the Norway Model is the type of affiliation that it represents
That is only part of the picture. Equally important is how Norway handles this affiliation domestically. What Norway’s experience shows is that it is important to consider the state’s ability to handle its EU relationship. The Norwegian state is a well-functioning state with a high level of competence and a broad range of comprehensive welfare arrangements that enable it to compensate actors for the negative effects of Europeanisation.
10. Norway will be included in the European Union’s post-Brexit arrangements
Norwegians will not automatically get the same arrangements with Britain that members of the European Union will. Norway is not part of the Brexit negotiations and for many issues Norway will have to sort out its relations with the UK on its own, for example, on the rights of Norwegian citizens in the UK and UK citizens in Norway. In this case, the UK government has assured Norway that citizens will receive the same treatment. Nevertheless, Norwya is a decision-taker on the sidelines during the negotiations on the UK’s fuure relationship with the EU and is concerned with when its arrangements with the UK will be settled.
Could the Norway model work for Britain? Find out more in Squaring the circle on Brexit – Could the Norway model work? by John Erik Fossum and Hans Petter Graver, a comprehensive first-hand account of Norway’s relationship with the EU.