Terry Entoure, a Scottish blogger in Zurich, explores an independent Scotland’s options on EU membership, arguing that EFTA is likely to provide as many complex challenges for Scotland in the context of a post Brexit rest of UK as full EU membership would
AN independent Scotland will have to make a long-term commitment to its legal order and to its trading arrangements. We know this is the case because the UK’s failure to commit to any future direction is leading to stalled investment, a skills shortage, job losses, and capital flight. If this is true for the UK, then it will be doubly so for a fledgling nation.
The most powerful argument for independence right now is that we have a chance to escape a sinking ship by making commitments to the rest of the world that the UK cannot. If we’re going to commit to something, then we’d better get it right and we’d better get it right first time.
Which commitments, however, lead to the best outcome? Do we even have the data that will allow us to make that decision? Let’s take a look.
An independent Scotland could join the EU. We could go right ahead and start that process if we wish. EU membership brings with it all sorts of advantages for small nations – privileged access to the EU internal market; free trade agreements with pretty much every other country interested in a free trade agreeement; a voice in EU foreign policy; and a chance to forge EU law in a form we consider to our advantage.
That obviously doesn’t come for free. The cost is that to join the EU we first need to demonstrate that we can uphold the body of EU law known as the Acquis Communautaire. Contrary to popular opinion, this is not trivial. It is especially non trivial if your nearest neighbour is busy erecting barriers to trade with the EU.
If rUK is busy erecting barriers to trade with the EU and Scotland joins the EU then those barriers become our barriers. All told, we could probably do without them. If rUK drifts off into the regulatory mid-Atlantic then our land border with rUK will be subject to Acquis Chapter 12 (veterinary inspections), Acquis Chapter 29 (common external tariff), and the EU Vat Directive. The list is actually pretty huge. We know this because attempts to uphold the Good Friday Agreement require compliance with hundreds of items of EU law that quickly spread into criminal databases, data security and energy markets.
What if rUK’s Brexit adventures make EU membership impractical? Well, we have other choices but only one really matters: EFTA/EEA. The EEA (European Economic Area) is a treaty that allows EFTA (European Free Trade Association) members to fully participate in the EU internal market but without adopting the other functions of the EU. That means we leave behind EU policy on crime and justice, foreign affairs, customs union, agriculture and fish. In fact, the whole point of choosing EEA is that we would leave the EU’s regulatory orbit in all of those policy areas. We’d want to leave them behind if they were creating issues at our legal, regulatory and physical border with rUK. Leaving the EU’s orbit in these policy areas means that in many cases we will be free to reach agreement with rUK and solve those issues.
What is the role of EFTA in all of this? Well, the EEA is mediated through EFTA institutions rather than EU institutions. We’d have the EFTA court and the Surveillance Authority instead of the ECJ and EU technical oversight. We’ll still be upholding EU law that pertains to the operation of the EU internal market and, although there are theoretical differences in the way that judgements may be implemented, we’re likely to remain compliant just as we are today. We will, of course, be compliant with less EU law but we’ll just be trading that for binding agreements with rUK.
The tradeoffs are unbelievably complex. We’d be outside the Common Fisheries Policy but that means we’d lose privileged access to the market where we sell most of the catch. We’d have full participation in EU financial markets but no role in forming the regulatory regime. I could go on and on but I won’t. The biggest uncertainty in all of this is that we don’t know if rUK will drift off into the regulatory mid-Atlantic. We have no idea what the UK plans and even less idea if it will ever get there. As a consequence, it is impossible to determine if EFTA/EEA is a better outcome than EU membership.
The conditions and tradeoffs are impossible to predict and surprisingly difficult to quantify because there is a dearth of Scotland-centred data. Even so, we need to start thinking about those tradeoffs and the conditions that affect them.
That means being nationally selfish, thinking about ourselves and what is best for us. In the background, we’ll be hampered by rUK’s prevarication but leaving that behind is the whole point of independence.
Picture courtesy of Scottish Government