Aiming for a Norwegian solution for Scotland would be disastrous

Røros - Sleggvegen
Røros – Sleggvegen.
Some people within the SNP are apparently thinking about aiming for EFTA membership instead of being a full member of the EU, according to The Times:

Senior [SNP] party figures want to adopt a Norway-style model under which an independent Scotland would stay inside the single market, but outside the EU, after Brexit, according to sources. They believe that this would allow Scotland to retain the benefits of the European single market while continuing to trade within the UK as it does now.

A poll published yesterday found that more than a third of people who voted for an independent Scotland in the 2014 referendum want to stay outside the EU. SNP strategists believe that this new approach would keep these voters behind their independence cause.

I think this would be a pretty bad idea for three reasons: (1) It would send the wrong message to the World; (2) it would prevent us from building a majority for Scottish independence; and (3) it would be an economic disaster.

Fortunately it seems the official position of the SNP hasn’t changed:


However, just in case anybody still thinks it sounds cool, here are the reasons why I’m firmly against it:

1. It would send the wrong message to the World

The nations of the World are currently having to choose between being part of the free world, headed by the EU and Canada, or being part of Trump’s and Putin’s alt-right-fascist dystopia that Theresa May wants to be a lapdog in. This is not the right time to be sitting on the fence.

Also, Scotland’s clear rejection of Brexit and Nicola Sturgeon’s clear message in favour of the EU have impressed and inspired governments in other EU countries, and there is a strong desire to help Scotland at the moment. Suddenly going lukewarm would send entirely the wrong signals.

2. It would prevent us from building a majority for Scottish independence

As I’ve argued before, the SNP traditionally had many members that were anti-EU (for instance in the fishing communities), and although they now form a small minority in the party, some of them are still prominent within the party (because they’ve been there for so long). They clearly don’t want to remain within the EU and I’m imagining they’re behind this story.

However, from an electoral point of view, there simply aren’t that many Yes-Leave voters left in the Yes camp (many of them have already drifted away and will now vote No), and promising an EFTA deal is unlikely to win them back.

There are many, many more No-Remain voters that could be convinced by a Scotland-in-the-EU campaign, and suddenly turning our back to the EU would make it much harder to win them round.

A Scotland-in-EFTA campaign would therefore be likely to limit our appeal to those who voted Yes last time, and we would lose again.

3. It would be an economic disaster

In many ways Scotland could live well with Norway’s current set-up, but the crucial problem is that we can’t get there without going through hell first.

The reason has to do with WTO membership, tariffs and all that.

As anybody who has read Ian Dunt’s excellent wee book about Brexit will know, becoming a full WTO member is a very hard process that can take years. You basically need to draw up a lot of schedules (lists of tariffs) and get unanimous agreement from all current WTO members. Also, you need to enter into a lot of bilateral trade agreements.

Ian Dunt argues convincingly that this will be almost impossible for the UK to do quickly, so it must be even worse for Scotland. To take but one example, do we really expect that Trump’s America will offer Scotland a trade deal that is in our interest?

If Scotland is a full member of the EU, we remain part of the EU’s customs union, which means that everything will work just like before.

In theory, we could form a customs union with the rUK after independence, but we would then depend on the deals they make (with Trump and assorted dictators from all over the World) – and although these might be better than the deals we can make ourselves, they’re likely to be worse than the very good agreements that the EU has negotiated over the years. Also, forming such a customs union would mean that we might not be able to tick the boxes for EEA membership.

This is because EEA countries have zero tariffs internally, but there are no guarantees that Westminster will achieve such a deal. The only way ensure that we fulfil the EEA rules is by having our own deal, but as I argued above, that would most likely be disastrous.

Here are some more details about it from a factsheet about the EEA produced by EFTA (PDF):

The EEA Agreement provides for a free trade area covering all the EEA States. However, the EEA Agreement does not extend the EU Customs Union to the EEA EFTA States. The aim of both the free trade area and the EU Customs Union is to abolish tariffs on trade between the parties. However, whereas in the EU Customs Union, the EU Member States have abolished customs borders and procedures between each other, these are still in place in trade between the EEA EFTA States and the EU, as well as in trade between the three EEA EFTA States. Furthermore, the common customs tariff on imports to the EU from third countries is not harmonised with the customs tariffs of the EEA EFTA States.

The EEA Agreement prohibits tariffs on trade between the Contracting Parties. Therefore, all products, except certain fish and agricultural products, may be traded free of tariffs within the EEA. In order for a product to obtain preferential treatment under the EEA Agreement, it has to originate in the EEA. The EEA Agreement therefore contains rules of origin that determine to what extent a product must be produced or processed within the EEA in order to obtain status as a product of EEA preferential origin.

It’s clearly a better option to remain within the EU’s customs union. (Norway has had a hundred years to enter various trade deals, so we cannot simply expect to get the same deal as a new country.) It wouldn’t even be good stepping stone to full EU membership – it would be insane to spend a decade negotiating trade deals just to bin them immediately afterwards.

Also, I simply don’t believe that staying outside the EU’s fisheries policies is really that important to most Scots. The problem at the moment is that Westminster haven’t represented Scotland’s fishermen well in Brussels (they’ve prioritised the interests of the financial industry instead), and once we get a seat at the table there, we can negotiate better terms and conditions.

Conclusion

Going for continued full EU membership after independence is clearly a much better solution that aiming for EFTA membership for a lot of reasons. Of course we must hope that the EU negotiates a great trade deal with the rUK, but it’s much better to emphasise that from the inside (together with Ireland) than to try to create a bespoke solution that will please no-one and ruin Scotland along the way.

2 thoughts on “Aiming for a Norwegian solution for Scotland would be disastrous

  • 31/01/2017 at 12:15
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    I’m not interested in “moral” arguments like (1) so I’ll discount that one. What’s the best option isn’t about advertising our virtue to the world.

    Argument (2) I don’t agree with – you can’t just write off the “Leave/Yes => No” voters like this. IMO voters who actually voted for independence in the past are much more “up for grabs” than the subset of No voters who love the EU so much they will switch.

    Argument (3) this one – a pragmatic argument about whether the option is feasible – is potentially more convincing, but not being an economist/world trade expert, I can’t vouch for its correctness! It could be there just isn’t a compromise option that wouldn’t fuck up trade with rUK.

    Reply

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