The Future Of U.K.-EU Trade: The Norway Model

Author:Ms Davina Garrod, Stephen S. Kho and Alan Yanovich
Profession:Akin Gump Strauss Hauer & Feld LLP

Co-authored by Sarah Williamson, Summer Associate (not admitted to practice)

In the aftermath of Brexit, the United Kingdom is faced with the challenge of negotiating a relationship with the EU that balances Single Market access with national control over the movement of goods and workers. This article is the second of a four-part series examining the three models for a future U.K.-EU relationship.

Previously, we have provided an overview of the three models. Here, we analyze the "Norway Model." We identify the main features, benefits and drawbacks. Future articles in this series will address the "Swiss Model" and the "Bilateral Trade Agreement Model."

What is the Norway Model?

The Norway Model could also be called the "EEA Model," since the country's relationship with the European Union is defined through its membership in the European Economic Area (EEA). The EEA Agreement became effective on January 1, 1994. It joins together the 28 EU member states1, Norway, Iceland and Liechtenstein in the Single Market. It implements the four fundamental freedoms—free movement of goods, services, workers and capital—throughout the participating states.

What are the benefits for the United Kingdom?

As an EEA Agreement signatory, the United Kingdom would maintain access to the Single Market, allowing internal trade without customs fees on most goods and services.

Working from the preexisting EEA Agreement would also prevent the United Kingdom from having to start from scratch in trade negotiations with the EU.

What are the drawbacks for the United Kingdom?

Membership in the EEA would still require the United Kingdom to implement the majority of EU law and regulations, including all policy areas affecting the Single Market, such as financial services, product standards, social and employment laws, energy and climate change. Under this model, the think tank Open Europe estimates that 93 of the 100 costliest EU regulations would remain in place in the United Kingdom, at a cost of £33.3 billion annually.2

Despite obligations to implement most EU policies, the United Kingdom would have virtually no representation in Brussels. The United Kingdom would have no members on the European Council, Commission or Parliament; no nationals working in any of those bodies; and no judges on the European Court of Justice. While Norway has negotiated participation rights in a few EU bodies, including the European Defence Agency, Frontex and Europol, its influence remains...

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