Norway solution 'would put UK in single market but not under ECJ'

Patrick Wintour Diplomatic editor
Efta countries are members of the single market but disputes are settled by its own court, not the ECJ. Photograph: Andrew Matthews/PA

A Norway-style arrangement would give post-Brexit Britain access to the single market and would not lead to fights with the European court of justice, the head of the court that oversees single market countries outside the EU has claimed.

Carl Baudenbacher accused the British government of giving a distorted and inaccurate account of the extent to which his European Free Trade Association (Efta) court could act independently of the ECJ.

“Politicians and diplomats had difficulty in understanding the true relationship between the Efta court and the ECJ,” he said. “There is no risk of the ECJ becoming involved in a gunfight with Efta.”

Theresa May is set against Britain being subject to the ECJ, but some in the soft Brexit and remain camps are edging towards an Efta compromise. Senior pro-remain MPs and peers from all parties attended Baudenbacher’s talk at a meeting organised by Legal Futures, indicating that his campaign to lure the UK to join Efta is winning political support in Westminster.

Labour and some pro-remain Tory MPs have urged the government to opt for a Norway-style Brexit by joining Efta in a transition. The Scottish National party leadership is making a similar proposal.

The three existing Efta members, Iceland, Norway and Lichtenstein, are all members of the single market, but disputes over whether they are breaching the rules of the single market are settled by the Efta court and not the ECJ. The Efta members claim they gain access to the single market, but without the mandatory political integration.

Advocates of British membership of Efta say the court provides a pre-existing system of resolving disputes with the EU and its trading partners. They add that it is a more realistic option than trying to invent an entirely new dispute resolution system by the planned Brexit date of April 2019.

Baudenbacher pointed out that Switzerland had been trying to negotiate such a bespoke deal with the EU for decades.

Critics of the Efta court claim it is entirely subservient to the EU’s supreme court, the ECJ, and as a result the three Efta states in effect have to accept the rules of the single market as interpreted by the ECJ, without any say in formulating these rules.

But Baudenbacher, citing case law, said the requirement for the Efta court to comply with ECJ law had largely been replaced by a system of judicial dialogue. He claimed the Efta court had also developed its own value system based on free trade, competition, strict proportionality and fact-based judgments.

He said the UK government’s own position paper assessing Efta procedures “is confined to the law as stated in books, and does not have a single word over the law in action”.

He highlighted how the Efta court did not have the same strict enforcement procedures as the ECJ, adding that the Efta court increasingly went before the ECJ in judging cases, giving Efta the right to set case law and set new principles.

Provisions requiring Efta to comply with the ECJ “are hardly operational and have never been applied in almost 25 years of the Efta court’s existence,” he said.

“The EU is a community of law which will not easily attack a judgment of the Efta court on a political basis. It would risk losing face. Politicians and diplomats have difficulty understanding this.”

Baudenbacher would not be drawn on a claim by the Brexit secretary, David Davis, that UK membership of Efta would be impossible to negotiate before the Brexit date of April 2019.

But he said once the UK left the EU it could apply to join Efta and then the European Economic Area, the means by which EU members co-exist with Efta in the single market.

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