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3 - Norway and the European Economic Area: Why the Most Comprehensive Trade Agreement Ever Negotiated Is Not Good Enough

Published online by Cambridge University Press:  20 December 2023

Martin Westlake
Affiliation:
London School of Economics and Political Science and Collège d'Europe, Belgium
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Summary

The “Norway Option” was a term that cropped up repeatedly in the UK's Brexit debates. Possibly this caused some confusion to a good number of Britons, but for many the term became a shortcut for the idea of the United Kingdom remaining in the Single Market without being a member of the EU. That is the deal that Norway and Iceland (since 1994) and Liechtenstein (since 1995) have with the EU, via their participation in the 1994 European Economic Area (EEA) Agreement. These three states are in the European Free Trade Association (EFTA), and are known as the EEA EFTA states. Switzerland is also in EFTA, but it is not in the EEA, having opted not to join after a referendum in 1992. Switzerland has its own very different arrangement with the EU, managed through numerous bilateral agreements, as Georges Baur describes in Chapter 4.

The EEA agreement is complex and unique. There is no other trade agreement between trading partners anywhere in the world that comes close to resembling it. Perhaps the most remarkable aspect of the agreement is that its negotiation is perpetual. It is never completely or finally negotiated. This is because every time the EU legislates to update and improve the Single Market, the EU and the EFTA states talk with each other to see whether and how that legislation should be incorporated into the EEA Agreement. Together, each year, the EU and the EEA EFTA states make several hundred Joint Committee Decisions (JCDs), with or without technical adaptations, to incorporate EU legal acts into the EEA Agreement. It is the only example of a dynamic trade agreement that ensures homogeneity of market conditions between the parties to the agreement. “Dynamic” and “homogenous” are central terms in EEA parlance, because they uphold the principle of a level playing field that is an essential requirement for full participation in and integration into the Single Market.

WHY A EUROPEAN ECONOMIC AREA?

A question that has not been asked enough by participants in the Brexit debate is why the EEA Agreement came into being in the first place.

Type
Chapter
Information
Outside the EU
Options for Britain
, pp. 33 - 46
Publisher: Agenda Publishing
Print publication year: 2020

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