Monday, 6 June 2016

The #EUref Red Herring

As part of the EU, the UK has a free-trade agreement with the other countries in the EU. It is the core reason to have originally joined the Common Market.

Clearly the UK would want to keep such an agreement in the event of Brexit. The alternative would be the possibility of trade restrictions and customs duties between the UK and EU (or as explained here, the EEA European Economic Area).

The issue is that Free Movement Of People (FMoP) is a key aspect of free trade. It allows people to move to more successful economic areas. Just like they do around the UK, except around the whole EU/EEA.

That can provide all sorts of benefits. But a lot of people don't like FMoP. The relative success of the UK's economy means the UK has been a magnet for EU nationals, especially from the eastern bloc countries that have joined the EU in recent years.  Brits have tended to stay in the UK, so "Net Immigration" has risen to potentially unsustainable levels. It's putting all sorts of strains on infrastructure such as schools, NHS and especially housing.

The question is whether a new trade deal can be done with the EU/EEA without FMoP as a core condition.  John Redwood MP, a key Brexiteer, looked me in the eye last week at a EUref debate and said "Yes".  Reasons commonly quoted are:
  • The EU needs the UK more than the UK needs the UK. The UK would be in a strong negotiating position after a Brexit vote.
  • Countries such as USA and Canada are going for a free-trade deal with the EU that doesn't involve FMoP. A precedent is being set.
I'm not so confident:
  • FMoP is a core aspect of the free market in Europe:
    • Norway is a member of the EEA becasue it has accepted FMoP
    • Switzerland does not have full free trade rights. A peoples' referendum there chose against full FMoP
  • The UK is in a similar geographical position, not thousands of miles away like Northern America. I'd expect FMoP to be sacrosanct in a UK trade deal with the EU/EEA. Not least because to allow otherwise would set a precedent for other EU countries which would threaten the very existence of the EU.
  • The recent re-negotiation with the EU, led by David Cameron, got nowhere on FMoP issues. I can't see Brexit making any difference to EU/EEA attitudes. 
I therefore believe FMoP would not be negotiable for any new trade deal with the EU/EEA after Brexit.  I have to assume the idea of the UK getting any further control over its borders is a red herring.  Unless soneone can provide some strong proof otherwise.  Anyone?

The people need to know.


  1. You're correct that FMoP would be part of an EEA/Efta deal, but Efta countries can apply an emergency brake to limit FMoP. See for references.

    1. Yes, and FMOP could be restricted to workers only (not their families, if not already in UK). But I don't see membership of EEA as attractive overall. So this option wouldn't be available.

  2. @jonathanportes describes the situation in thus:
    "...the "straight Leave" option means both that the UK would no longer be part of the Single Market and that we would no longer have free movement with the rest of the EU; while the Norway option would mean that we would retain both."...
    "While Parliament and the government would obviously and rightly be bound by the referendum to negotiate the UK's exit from the EU, they wouldn't be bound by anything that Vote Leave had said about how that should be done. With the likelihood of at least some turbulence in financial markets - and, more seriously, with strong pressure from business to resolve the situation in the least destabilising way possible - economic arguments, as well as those of practicality, will come to the fore again.

    So, at this point, the Norway option for Leave re-emerges;"

    In other words #VoteLeave are asking the UK electorate to vote for a full-out approach knowing full well the Norway option of free trade in the EEA with Free Movement of People (FMoP) is what would be implemented out of necessity.
    The only question is whether free trade could be established without FMoP? Until hard evidence arises to support that possibility, I think not.