A market that’s not on the menu

Nicola Sturgeon hopes the EU will welcome Scotland back into the fold once the UK departs. [European Union]

“If economic interests triumph, then we are looking at the EEA.” So said Norwegian political consultant Paal Frisvold of the UK’s future trade relations with the EU, addressing a EURACTIV event on the future of EU integration on Friday (12 January). And his view appears to be shared by the Scottish government.

According to the Scotland’s Place in Europe: People, Jobs and Investment report published on Monday (15 January) by the Nationalist government, Scotland’s economic output would be £12.7 billion lower by 2030 than it would be under continued EU membership if the UK leaves the single market without securing a free trade agreement.

The ‘Canada-Plus’ or ‘Canada Plus-Plus’ model favoured by Brexit Secretary David Davis, meanwhile, would still leave Scotland’s GDP £9 billion lower by 2030 – equivalent to £1,610 per person (€1,800), according to the report.

Study: UK economy likely to suffer post-Brexit

The UK economy is likely to suffer for a decade after leaving the EU under the most probable post-Brexit trade scenarios, according to a new study from the RAND Corporation, made available to EURACTIV.com before publication.

Having voted to Remain in the bloc by a margin of more than 60-40%, Scots are entitled to feel aggrieved at the prospect of being pulled out of both the EU and single market against their will.

“I do believe there is a majority to be harnessed [in favour of] single market membership,” said First Minister Nicola Sturgeon at a press conference on the report.

However, the prospect of economics trumping politics remains a big if. Single market membership is not on the menu, for now at least.

“Straight EEA (European Economic Area) membership is not acceptable to anybody in the UK,” said Simon Hix, Professor at the London School of Economics and chair of Votewatch.eu.

“There is a bit of a mismatch between the debate in London and Brussels,” he added.

The Scottish National Party, which Sturgeon leads, and the Liberal Democrats, are the only significant political parties in the UK to favour single market membership. Both Theresa May’s Conservatives and Labour leader Jeremy Corbyn are committed to negotiating a UK-specific trade pact rather than copying Norway’s model of single market membership.

“We are in a dangerous position, particularly if we end up with a Norway-type arrangement,” said John Mills, Chairman of the Labour Leave campaign.

The first inquiry launched by MPs on the UK Parliament’s Exiting the EU select committee into a successor trade arrangement is examining the merits of a pact modelled on the EU-Canada agreement.

For his part, Frisvold, a former official in Oslo’s foreign affairs ministry who chairs Norway’s branch of the European Movement, does not see Norway as an ideal model to emulate.

“We have a collective national ulcer when it comes to the EU,” commented Frisvold. Having rejected the chance to become full EU members in two referendums – most recently in 1994, Norway has been a member of the EEA since 1994.

“A basic free trade agreement,” is the limit of Hix’s expectations for the Article 50 talks. “Once we leave in March 2019, the serious negotiations will start”.

“There will be a British (trade) model in time, but the appetite and time is not there…this is not the climate politically,” added Hix.

In other words, economic interests are not about to triumph any time soon.

Supporter

Pro Europa

From Twitter

Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.