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As the UK enters its final days as a member of the EU, focus turns to what type of arrangement might emerge during the negotiation that will follow the expiry of the latest Brexit extension on Friday 31 January.
During a lecture given by Michel Barnier in Belfast this week, the European Commission’s head of relations with the UK said any future trade agreement with the UK must deliver frictionless trade in the way that EU membership did.
In looking at what type of relationship the UK and EU might devise, a starting point is looking at the relationship between European countries that are not part of the EU. Switzerland and Norway are both fairly significant economies with such arrangements, though neither is near as big a market as the UK – the fifth largest economy in the world.
European Economic Area
Non-EU states Norway, Iceland and Liechtenstein join all 28 EU countries as members of the European Economic Area (EEA). This differs from EU membership in that they are part of the single market but not the customs union. It means that the four freedoms of the single market (free movement of people, money, goods and services) applies to these in the same way as it does to EU members. Product standards are aligned, but the fact these countries are outside the EU customs union means that border inspections are a reality at crossing points.
Switzerland
Switzerland voted against joining the EEA in 1992 and instead has a series of close to 100 bilateral trade agreements with the EU. The first of these were agreed in 1999 and covers free movement of people, technical trade barriers, public procurement, agriculture and air and land transport. There is also have a scientific research agreement that enables Switzerland to participate in EU research programmes.
These agreements are managed by 20 joint committees and Switzerland can make its own separate trade deals with other nations – as such it has recently concluded agreements with Japan and China.
This type of arrangement may have some appeal to the UK as the Swiss-EU relationship is very close, with the Swiss retaining independence to negotiate separate deals. However, there is a very definite commercial border between Switzerland and its EU neighbours as the Irish Farmers Journal discovered on a visit to a border post in 2018.
Border checks
Despite Norway being part of the single market and Switzerland having multiple bilateral agreements with the EU, there is a very definite border inspection process for both countries at the point of entry to the EU. The level of inspections are lower than if there were no deals in place, but the fact that any inspections are required creates an administrative and logistical issue.
Both Norway and Switzerland have highly automated and comprehensive inspection posts with the EU, but drivers are required to stop and secure clearance.
This presents a particular problem at UK ports where facilities don’t exist to introduce similar inspection points. Given the volume of trade across the English Channel, major delays are inevitable at ports in the south of England, even with minimal inspections.
There is another issue at Northern Ireland’s points of entry. In this case, Northern Ireland will be aligned with the EU on standards and implementing EU customs policy though they are part of the UK customs union. The withdrawal agreement’s Irish protocol has decreed that there are to be no inspection points at the Irish border, but EU controls will be carried out at points of entry to Northern Ireland where checks will take place on goods in transit from the rest of the UK. This was reinforced by Barnier in his Belfast lecture and means that come 11pm this Friday, trade between the EU and UK will never be as seamless again.
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