EFTA Is Not an Alternative to Theresa May’s Brexit Deal

Joining the EFTA would force Britain to accept free movement without solving the Irish border issue.

Flag of Norway
Flag of Norway (Jorge Láscar)

The Sun reports that British cabinet secretaries Michael Gove and Amber Rudd — the former a leader of the 2016 campaign to leave the EU, the latter a “remainer” — intend to push for membership of the European Free Trade Association (EFTA) with Labour’s support if and when Prime Minister Theresa May’s Brexit deal fails in Parliament.

This plan is unlikely to succeed, for two reasons:

  1. It confuses the withdrawal agreement with the political declaration on the future EU-UK relationship.
  2. Neither the EU nor the EFTA would accept it as a short-term solution.

What is the EFTA?

Before going into more detail, a few notes on what the EFTA is:

  • Britain was a founding member of the EFTA in 1960 but left in 1973 to join what is now the EU. Only Iceland, Liechtenstein, Norway and Switzerland remain.
  • With the exception of Switzerland, which has its own treaties with the EU, EFTA members are in the European Economic Area (EEA), which is essentially the single market without agriculture and fisheries.
  • EFTA members are not in the EU customs union, so they can conduct their own trade diplomacy.
  • But they do have to accept the free movement of EU nationals. The EU does not separate its “four freedoms” — free movement of capital, goods, services and people.

Hence EFTA membership would cross one of May’s red lines, which is that freedom of movement must end.

Confusing the two deals

Back to the first point: confusing the withdrawal agreement with the political declaration.

The Brexit negotiations have produced two documents:

  1. The first arranges Britain’s exit from the EU in March 2019 and a transition lasting through 2020. Once it has been approved by the parliaments of the EU as well as the UK, it becomes a legally binding treaty.
  2. The second is a statement of intent on the future relationship. It is full of aspirations but neither is, nor will be, binding. The EU maintains that the future relationship can only be negotiated once Britain has left, hence the need for a transition period.

Many British objections center on the second document, with Europhiles arguing it puts too much distance between the EU and the UK and Euroskeptics complaining it keeps the two too close together.

Separately, Brexiteers object to the so-called backstop for Northern Ireland, which is included in the treaty. It stipulates that, if negotiators do not find a better solution, the whole of the United Kingdom would remain in a customs union with the EU in order to avoid either closing the border with the Republic of Ireland or creating a customs border in the Irish Sea.

View from the rest of Europe

Britain tends to forget that its internal politics are not the only issue. The views of other Europeans matter too.

They see two problems with EFTA membership:

  1. It wouldn’t solve the problem of Northern Ireland. Remember: EFTA members are not in the customs union. That is why the EU has insisted on the backstop. There is no off-the-shelf solution for keeping a territory that borders on the EU half-in and half-out.
  2. EFTA members would likely welcome Britain (back), but not as an interim solution. Post-Brexit, the United Kingdom can either join the EFTA or it can negotiate a bespoke trade agreement. It cannot use the EFTA as an alternative to the 2019-20 transition, nor as a stepping stone to a better deal.