The Economist Asia - 24.02.2018

48 Britain The EconomistFebruary 24th 2018

1

2 created. Mr Delors and his advisers quickly

saw the advantage of extending the project

to the club’sbiggest external market, the

seven EFTA members. A former trade ne-

gotiator, Paal Frisvold, describes in a new

book* the negotiations that then took

place. As he explains, there was even a

plan that the EFTAcountries should be giv-

en a common decision-making role for sin-

gle-market regulations, as well as the right

to appoint judges to a newEEAcourt that

would police the system.

In the event this last idea was quashed,

because the ECJvetoed the creation of a ri-

val court. In Brussels the EEAsoon came to

be seen as a transitional arrangement, a

waiting room for countries that had yet to

persuade their voters to supportEUmem-

bership. As the old adage has it, nothing en-

dures so long as the provisional.

Critics say the EEAis a replica of the EU

minus voting rights. Yet this misunder-

stands its institutional structure, which is

more akin to a mirror. In place of the Euro-

pean Commission and the ECJ, the EEAhas

the EFTAsurveillance authority and the

EFTAcourt. There is a joint committee of

EUand EEAcountries, accompanied by

regular summits and parliamentary meet-

ings. Unlike the EU, though, the EEAis

purely intergovernmental, not suprana-

tional. Decisions are taken unanimously,

not by majority vote, giving the three

non-EUmembers a theoretical right of

veto over draft laws.

The EFTAcourt is not the same as the

ECJ, either, even though it too is based in

Luxembourg. It has three judges, one for

each EEAmember. It is heavily influenced

byECJjudgments, but it is not obliged to

follow them to the letter. It operates mainly

in English, not French. Its rulings are advi-

sory, not mandatory, they do not have di-

rect effect and the court does not have the

ECJ’s powers to fine governments that do

not comply. This is why the British govern-

ment has talked favourably of the model of

the EFTAcourt as a dispute-settlement

mechanism after Brexit. Indeed, its outgo-

ing (Swiss) president, Carl Baudenbacher,

has openly pushed the idea that Britain

should sign up to his court.

EEAmembers are obliged to accept the

four freedoms of movement of the EU’s

single market, including the free move-

ment of people. They are, however, outside

the EU’s much-criticised common agricul-

tural policy (in factthey subsidise their

farmers even more egregiously than the EU

does), as well as its common fisheries poli-

cy. Nor are they bound by the EU’s justice

and home-affairs structure, though they

largely choose to participate.

The EEAtreaty also has a number of

safeguards for members. Besides their the-

oretical veto rights, Articles 112 and 113 spell

out that anyEEAcountry may take emer-

gency measures in response to serious eco-

nomic, social or environmental difficul-

ties. Liechtenstein has exercised this right

to put in place controls on migration from

EUcountries, which the EUhas accepted

because it is a microstate. Yet Norway and

Iceland have never tried to invoke these ar-

ticles, seeing them as a nuclear option that

would invite retaliation.

As for the charge that Norway is a rule-

taker, in 2012 a report by an official commit-

tee chaired by Fredrik Sejersted, then an ac-

ademic and now Norway’s attorney-gen-

eral, concluded that although the EEA

worked well, it did raise concerns over the

democratic control of its laws. But since

most single-market decisions are taken by

majority vote the same could be said of the

EU, as Brexiteers have long argued.

Moreover, the real question is how

much informal influence countries have.

Ulf Sverdrup, director of the Norwegian In-

stitute of International Affairs, a think-

tank, says the EEAhas created a “platform

Treaties signed

1970 75 80 85 90 95 2000 05 10 16

Norway rejects

European Economic

Community (EEC)

Britain

Denmark

Ireland

Britain

votes to

stay in Greece

Spain

Portugal

Single

European Act

European Economic Area (EEA)

Switzerland

rejects EEA

Norway

rejects EU

Austria

Finland

Sweden

Amsterdam Nice

Ten mainly

eastern European

countries join

France and

Netherlands reject

EU constitution

Bulgaria

Romania Croatia

Lisbon

Britain

votes to

leave EU

Maastricht

A European journey

European treaties and agreements Country joins EEC/EU Country rejects membership/leaves

Introduces

majority

voting

Justice

and home

affairs

Re-weights

voting

Replaces

constitution

EEC becomes

European

Union

Creates

EEA

Customs controls

He who pays the toll

T

HE most visible evidence of the Euro-

pean Union’s single market is its

dismantling ofborder controls. Norway

is in the single market, except for some

agriculture and fish. And unlike Britain

and Ireland, it is in the Schengen pass-

port-free travel area. Yet as it is not in the

customsunion, Norway has border

controls and its exportsmust be checked

to comply with EUrules of origin.

In December Theresa May promised

to have no physical infrastructure or

checks and controls on the border bet-

ween Northern Ireland and the Irish

Republic. Yet she wants to leave the single

market and customsunion. Brexiteers

claim the Irish border can be kept invisi-

ble by smart technology, number-plate

recognition and a system of authorised

economic operators and trusted traders.

Such ideas drawhollowlaughs from

seasoned customs officers at Svinesund,

on the border between Norway and

Sweden. A high degree of sophistication

and trust makes this one of the world’s

most porous frontiers. Most cars whizz

through unchecked, with many heading

for the region’s largest supermarket in

search of alcohol, cigarettes and sugary

drinks, which are taxed more heavily in

Norway than Sweden. In theory there is a

limit to what they are allowed to bring

back, but in practice it is tricky to enforce.

When it comes to lorries, though,

controls are firmly in place. Norway’s

customsservice, known as Toll, has

expanded in the past two decades. The

average lorry takes around four minutes

to clear customs and few are pulled in for

full inspection. But every one stops at

Svinesund, which handles over 70% of

all commercial traffic across this border.

The mostly eastern European drivers, few

of whom speak English, let alone Norwe-

gian, then queue to have their papers

checked. This summera trial ofan auto-

mated electronic system will begin in

Orje, north of Svinesund, but even here

mostlorries will stop.

Kristen Hoiberget, the customs boss at

Svinesund, says his officers rely on in-

telligence and instinct in deciding when

to check vehicles. Svinesund usually has

100 confiscated cars in its car park; Mr

Hoiberget says he destroys 500,000 litres

of smuggled alcohol each year. He reck-

ons it takes two years to train recruits,

and ten before they know how best to

spot drug-smugglers or frauds involving

VATrefunds. Yet Britain is due to leave the

EUin 13 months’ time. And only 40 or so

roads cross the Norway-Sweden border,

compared with some 275 crossings in

Northern Ireland. No wonder many

think the promise to avoid any Irish

border must mean a softer Brexit.

SVINESUND

Norway’s experience suggests it will be difficult to avoid a border in Ireland