Monday, 11 September 2017

There is no trading in the Single Market without being of it

Jeremy Corbyn has practically no understanding of what the Single Market is or how it functions. This is made so utterly depressing by the fact that he is the country's principle opposition to the Conservative Party, who have become nothing short of dangerous if our negotiating progress counts as a sign of anything. Take, this, for instance. 



Every word you see above is spurious. As is the recurrent notion that it is possible to be a participatory benefactor of the Single Market without being bound by its rules. An agreed trading relationship, presumably either a series of transitional fixes or a Free Trade Agreement, would not replicate the terms provided by the Single Market. The EU would not reach such an agreement as it would undermine the very purpose of the EEA and might well violate WTO rules covering non-discrimination. 

What is important, firstly, is establishing what the Single Market actually is. Here is a very good working definition: 'The Single Market is a collaboration between the EU and three EFTA states (Norway, Iceland and Liechtenstein), who are bound together by treaty provisions and regulatory union'. Therefore, by virtue of our definition, we can immediately disprove Jeremy Corbyn's false assertion that what he calls "formal" Single Market membership requires EU membership. 

The phrase 'regulatory union' is vital to understanding why in order to trade within the Single Market, you must first be inside it. To be in means to enjoy full regulatory convergence with other members, where checks are carried out at the point of production for the sake of convenience. To be out means to be a third country, simply by virtue of treaty withdrawal, and necessitates extensive customs and documentary checks at external borders in order to ensure that certain standards have been adhered to in relation to the production, transportation or treatment of a good. 

Iceland, Norway and Liechtenstein enjoy full access to the Single Market. They are not associated with it or considered third countries. They retain strong trading ties with the European Union, substantial domestic sovereignty and avoid ever closer political union. Moreover, these countries are in no practical sense EU members in all but name. This is a lazy description of the mechanisms which form the EEA (remember that I use EEA and Single Market interchangeably). Note above that I described the Single Market as a collaboration. 


This is accurate because its skeletal and operating structure is a two-pillar framework with co-determination. Each 'pillar' has its own unique institutions and court for dispute settlement. And both pillars engage in constructive dialogue, as in most trade arrangements, when deciding upon common rules and cross-pillar disputes. The ECJ and EFTA Court have achieved what is called 'homogeneity', whereby mutual bodies incorporate new law. EFTA states contribute to shaping such laws. 

There is, it is true, adoption of some EU law on the part of the three EFTA states, but this may well also be the case with the conclusion of a bilateral agreement, which appears increasingly unlikely. Switzerland, for instance, 'enjoys' many individual agreements with the EU, now well over 100, and is forced to accept the implementation of a large number of EU rules and regulations. This was because, after its people rejected Single Market membership in 1992, it began on a bilateral course and negotiated sector by sector agreements, which necessarily required certain harmonisation with EU rules. I mention this because, in other words, being outside of the EEA does not necessarily mean avoiding EU law.

I have an article in (likely) tomorrow's Guardian about Labour and the Single Market. I hope some of their parliamentary figures read it, because they could do with some guidance. This is further to my article in The Telegraph, also tomorrow, about the Norway option and its understated reconciliation with the referendum demands of Leave voters. With any luck, I can work some way towards informing the public and giving both the Single Market and EFTA/EEA the credit they deserve. 

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