Heading for the Half-Way House? Scotland after Brexit

by Lesley Riddoch and Paddy Bort

The Nordic countries’ experience with their particular relationships with the European Union ranges from full membership (including Euro and Schengen) in the case of Finland to Sweden (outside the Euro), Denmark (outside the Euro, and with the autonomous Faroes and Greenland outside the EU), Norway (outside the EU but inside the Single Market, and in Schengen) and Iceland (outside the EU, having dallied with the idea of joining after the banking crash) – and all square these relationships with membership of the Nordic Council.

Post-Brexit, considering the options for Scotland, are Scots eyeing up the wrong European prize? Might the halfway house of the European Economic Area (EEA) suit Scotland better than full EU membership? That question was posed at the ‘Scotland after Brexit’ conference on 29 October at the George Square Theatre by speakers from five Nordic nations at an event organised by policy group Nordic Horizons in cooperation with the Academy of Government and attended by 300 people, including the Cabinet Secretary for Cultural and External Relations, Fiona Hyslop.

The Norwegian environmentalist Duncan Halley explained that in 1992 Norway joined the EEA (essentially the EU’s single market mechanism) as a precursor to full membership after a referendum in 1994. But fierce debate produced a no vote and the halfway house of the EEA became Norway’s permanent home.

Iceland’s EEA entry the same year had a slightly different genesis. According to the former Social Democrat leader Jón Baldvin Hannibalsson who masterminded EEA membership, access to the European single market looked like a good way to liberalise a 1960s economy “more rigid than the Soviet Union.” But because of Iceland’s reliance on fishing and relatively recent independence from Denmark, a complete transfer of sovereignty to the EU through membership was not on the cards. “People said: ‘We’ve had 600 years of European colonialism – no more.” It took 5 years to negotiate the EEA agreement but, according to Hannibalsson, it happened because an interim solution was mutually beneficial for the EU and small countries. EFTA (European Free Trade Association – Iceland, Norway, Liechtenstein) members then conducted more trade with the EU than the USA and Japan combined.

From Iceland’s point of view, EEA membership has proved more useful than the full deal. EEA members are in the internal market but can opt out of the Common Fisheries or Agriculture Policies, Maastricht, the customs union or the Euro. They can opt in in areas like justice or home affairs and they do have free movement in Europe and useful educational and research funds in exchange for a financial contribution.

So might Brexiting Britain beat Scotland to the chase? Hannibalsson thinks not: “One, Britain is too big for the EEA; two, its government isn’t keen and, three, EU members would have to approve Britain joining the EEA and they are not best pleased with Britain right now.”

It would be a different story for an independent Scotland, he thinks and maybe – with negotiations and the possibility of a second independence referendum ahead – more desirable.

Opting out of the Common Fisheries Policy would not just please Scotland’s fishing communities, it could help ensure Scotland’s portion of the North Sea is as well protected as Norway’s portion of the North Atlantic.

Duncan Halley says the Common Fisheries Policy has a terrible record protecting fish stocks in EU waters. Presently 30 per cent of stocks in the North Sea are outside safe biological limits and 93 per cent of cod are fished before they can breed.  Meanwhile, according to the OECD, “stocks in Norway are good,” and 73 per cent of caught fish come from protected stocks – the highest proportion in the world.

Fishing boats in Norway must be owned by registered fishermen actively working at sea or actively administering boats on land. If Scotland was free to jettison the CFP, the practice known as “slipper fishing” (where owners of EU quotas trade them and receive income without actively fishing at all) could be stopped, and better conservation of stocks could be achieved by having complete control over Scottish fishing waters – like Iceland, Norway and the Faroes.

Fishing matters in Norway not just because its valuable – its second biggest export after oil and gas – but because fishing is the backbone of rural Norway and the industry is of vital importance for continued settlement of the Northern seaboard.

Perhaps Scots should consider such long-term interests before deciding which European club best suits our needs. And perhaps membership of a club dominated by small Nordic players could help Scotland shift from a market-dominated, top-down social and economic model towards a more cooperative and decentralised Nordic one.

According to Professor Mary Hilson of Denmark’s Aarhus University, Nordic cooperation flourished in areas like culture, welfare and the arts while Europe was divided during the Cold War. Proposals for a Scandinavian defence and customs union failed in the 1950s but, since the reunification of Germany created a Baltic dimension in Northern Europe, they are back on the table again. There is even talk of a Nordic Federation, to give those nations a seat at the G20.

Of course, the majority of Nordic nations are EU members. But perhaps the EEA is a closer fit for Scotland than the EU? Perhaps, too, a viable halfway option would boost support for Scottish independence? Especially since Holyrood may not automatically retrieve powers from Europe post Brexit.

Professor Drew Scott, a member of Nicola Sturgeon’s Brexit advisory committee, speaking in a personal capacity, said Scotland might not automatically regain powers over fishing, forestry and farming, even though they are devolved. “Scotland has no international legal identity so the First Minister currently can’t sign international agreements – and fishing agreements are most definitely international.” Equally, he suggested, the World Trade Organisation might object if the structure of tariffs was different within a member state, and that could stymy attempts to have a different regime for farming or fishing north of the border within new legislation.

According to Professor Scott, there might be a lot to be said for joining the EEA rather than the EU. There’s no customs union, so no worry about borders with England should Scotland become independent post Brexit. The EEA won’t change in the next five years – the EU most certainly will, and inside the EEA an independent Scotland could straddle two internal markets – the UK and the EEA.

The counter argument was made strongly by Tuomas Iso-Markku from the Finnish Institute of International Affairs. He explained why Finland decided, after one year of membership of the EEA, not just to join the EU but to be at the heart of it, playing a constructive role in all EU institutions. Like many policy experts – that species despised my Michael Gove – in Norway, his biggest criticism of the EEA solution is that, yes, you have full access to the Single Market, but you have next to no say about the rules that govern it. EU membership, he argued, helped strengthen Finland’s western identity (given the geographical and political situation as a neighbour of Russia) and gave Finland more influence. He described how 56.9 per cent voted for EU membership, and how quick a political consensus emerged to place Finland “close to the core” of the EU, involved “in all the decision-making.” Finland, he said, wanted to be “part of the solution, rather than part of the problem.”

Scotland has different interests to the fishing-led economies of the North Atlantic, closer proximity to Europe and a history of EU membership. It may also seem politically unwise to rock the boat by offering a different vision of Scotland’s future in Europe to the one so recently supported by 62 per cent in the Brexit referendum. But a mature democracy takes the long view – and, in time, might that perhaps be EEA membership as a first or a permanent halfway home for an independent Scotland?

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s