Scotland and EFTA

by Jim Sillars

Elsewhere, I have argued it is wise to wait until the final UK-EU deal is known before deploying the case for independence. If it is a free trade deal with no tariff barriers, then we shall not face the same difficulties as in 2014, when with membership denied to the EU, an independent Scotland seemed stranded in a no man’s land of trade.

A UK-EU free trade deal, provided there is a protocol enabling an independent Scotland to inherit its terms will leave us to resolve only our relationship with the UK, with the EU out of the picture. However, although common sense on both sides would seem to offer such a deal, it would be prudent to consider alternatives if that does not transpire as ‘the deal.’

In the 2014 referendum, when the EU was telling the Yes side to get stuffed, I argued that membership of EFTA was a better aim for an independent Scotland. As a small nation, with an economy similar to Norway’s, we would not upset balance in that organisation; and it would allow us access to the EU full market through the EEA, and do so on less onerous terms than full membership – which the EU seemed set on denying us.

Although EFTA members are not bound by all EU rules, and have considerable sovereign powers over areas such agriculture, fisheries, foreign affairs, defence, immigration, criminal justice and regional and domestic policies, they are bound by the ‘single market’ rules which impose severe restraint in terms of procurement and state aids. Forced to choose between full membership of the EU and EFTA, the latter is a better bet for Scotland.

Instead of considering EFTA, Nicola Sturgeon, as Deputy First Minister, issued a document “Scotland in the EU” rejecting EFTA with the usual canard that EFTA members like Norway had to toe the EU line on directives without having any say in how they were formulated. She was wrong. The old gibe was that Norway waited at the end of a fax machine to see what it was to obey. Any examination of the EEA Treaty, and the number of directives Norway would not and did not accept would show in reality that the ‘weak submissive Norway’ is a myth.

The EEA Treaty has 129. Articles and a large number of Protocols, which set out in considerable detail the respective rights and obligations of EFTA and EU member States. It creates an EEA Council, an EEA Joint Committee and a Joint Parliamentary Committee. Articles 99 and 100 are examples of where the rights of EFTA States to be consulted on EU directives and policy are spelled out.

The facts disprove the Scottish Government’s claim that Norway has no alternative but to obey EU laws. In the period 2000-2013 Norway Implement 4,727 EU directives and regulations, whereas in the same period each EU State implemented 52,183 each. When the EU sought control of energy in the North Sea, Norway simply declared that it did not comply with the EEA Treaty, and it did not happen.

There is no concrete evidence, but from hints that have emerged in the media, it seems that some of those near the top of the SNP are starting to have a rethink, and now consider that EFTA might be something for an independent Scotland to aim for, if there is no free trade deal. But there has been no Scottish Government formal engagement with EFTA as an organisation, or with individual EFTA states, nor any sign of a careful examination of whether there may be impediments to membership.

The EEA treaty was signed by EFTA members Norway, Iceland, Lichtenstein (but not Switzerland ) and each EU state. It is here we meet a problem of an easy passage for an independent Scotland joining EFTA and then the EEA. They are not the same thing. The first step is joining EFTA. The second step is to become a legal party to the EEA agreement under Article 90 (2). That is done by a new EFTA member applying to the EEA Council. The Council consists of the EU Commission, EU member States and the EFTA member States. For the application to be successful Article 128 (1) and (2) applies. All current contracting parties – Norway, Iceland, Lichtenstein and all EU states must individually ratify the new member joining the EEA. Assuming the EFTA members were happy for Scotland to join it, it leaves Scotland’s fate on membership of the EEA in the hands of the EU states, each of which has a veto under Article 128.

Here, as with Scotland joining the EU as an independent state, we come against the Spanish-Catalonia issue. Would Spain see us sneaking into the EEA by the side door, one that might open to Catalonia, and say No? Would Belgium, with its dual-national problem say No, too?

We would have to make it difficult for any EU State to veto a new EFTA member from the EEA, by advancing the case that Scotland is sui generis, with no comparison with any other in history, economic structure, geographic position, national interests, and constitutional right to be independent. We are very like Norway and Iceland, two northern European countries with similar national interests, and our joining would seem a logical extension of EFTA membership, unlike such as Catalonia.
Getting Spain and Belgium on our side would be the diplomatic task of the Scottish Government if, failing a free trade deal, Scotland still places priority on access to the EU market on a tariff free basis.

Just to complicate things a little, even if we emerged as an EEA EFTA member, what would our trading relationship be with rUK, our largest export market by a mile, if it is in a WTO relationship with the EU? How would we win a referendum if there was a hard border in that relationship?

What I hope this paper has done is show that we in the Yes movement have to examine more than one scenario in the Scotland-UK-EU relationship, and put a premium on trying to think things through.