Britain’s limited options by John Springford
On the face of it, the EU’s deals with Canada, Liechtenstein, Norway and Switzerland appear to lack an underlying principle. Brexiteers have seized on the discrepancies between them, in order to argue that Britain can stay in the single market while imposing quotas on the number of immigrants from the EU. But there is a logic that explains why they are different – and it suggests that the UK is heading for a harder Brexit than many in Britain appear to realise. So what are the deals? If Canada’s trade agreement with the EU is ratified, the vast majority of goods trade will be tariff-free, although it does not cover services. The agreement also includes some measures to ensure that each side recognises each other’s goods standards. But Canada does not have to allow free movement of workers with the EU. Switzerland is more closely integrated into the EU’s goods market, signing up to EU rules and standards in order to ensure tariff-free trade in manufactures. Its access to EU financial markets is limited, however, since it only has a services agreement on non-life insurance. In return, it must sign up to free movement – and, though the Swiss voted in a 2014 referendum to impose quotas on immigration from the EU, the Commission has given the country until February 2017 to think again, or it will take retaliatory measures. For their part, Norway and Liechtenstein are full members of the single market, signing up to
all rules and standards in goods, services and capital, as they are members of the European Economic Area (EEA). But they have different rules governing the free movement of workers. The EEA agreement allows Norway and Liechtenstein to restrict the flows of people if “serious economic, societal or environmental difficulties of a sectoral or regional nature arise”. Norway has never used this ‘safeguard clause’, because, under the agreement the EU may retaliate by restricting imports of goods or services from Norway. Yet Liechtenstein has been allowed to restrict free movement since 1998 by imposing quotas on the number of EEA nationals who could live and work in the country. The deals with the four countries are different because of their population sizes, their distance from the EU, and the volume of trade they conduct with the EU. Liechtenstein is tiny, with a population of 37,000. It is easy for the EU to tolerate Liechtenstein’s quotas: it is politically and economically insignificant, and its curbs on free movement do not threaten the integrity of the