"If UK voters vote to leave the EU, Britain will face a range of options," outlined Professor Nick Sitter. Sitter has recently published a number of editorials on Brexit, including one on the London School of Economics (LSE) blog TransCrisis as well as on alternatives to Brexit and a Brexit "domino effect" on Norwegian news outlet E24 (in Norwegian).
A Center for European Reform report in January listed seven alternatives to EU membership for the UK. "In the end, it comes down to either a set of options that involve British participation in the Single European Market through some form of "buy-in," or a set of options that center on some kind of free trade relationship," explained Sitter.
The first set of options include:
- a bilateral deal where the UK chooses which parts of the EU system to take part in – an option that many EU countries are very unlikely to accept, especially those that are struggling with their own Eurosceptic rivals;
- a link like the one Norway has through the European Economic Area (EEA) – perhaps the most likely option;
- a series of bilateral treaties on the Swiss model, which is unlikely because the EU is not happy with this particular model; and
- a deal based on the UK joining the European Free Trade Area and securing another form of a Norwegian- or Swiss-style quasi-membership of the EU.
"These options would involve the UK accepting most of the Single Market rules and regulations, including the free movement of people, in return for full market access," underscored Sitter. The main benefit is formal sovereignty, and the main drawback is limited or no influence over rules and regulations that apply to the country. None of the options are likely to affect immigration, and all involve maintaining access to the Single Market for UK goods and services, including financial services under the Norway model.
The second set of options include:
- a customs union (the Turkey option);
- a free trade agreement (the Canada option); or
- trade that is based on World Trade Organization regulations.
In these cases the UK would not be bound by the rules of the Single European Market, but there would be a range of barriers to the trade of goods and services, explained Sitter. Such arrangements might reduce customs duties, but would not provide UK financial services access to the Single Market.
"The EEA agreement has worked well for Norway, where the two largest of the seven parliamentary parties are pro-EU, three parties have a mixed stance and are satisfied with the EEA compromise, and only two are against the EEA system," noted Sitter. "However, it is less certain whether British Eurosceptics might be as happy as their Norwegian counterparts to accept an arrangement where they are bound by EU laws without having a formal say in how these laws are made. Many politicians in the Brexit camp might find that the reality of the Norwegian model is not as attractive as the rose-tinted picture of the EEA sometimes presented in the British media."