Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

How 'Norway plus' could be a Brexit solution, and why trading garlic is problematic

They would get full access to the Single Market and avoid tariff barriers.

shutterstock_745749544 City of Tromso. Shutterstock / V. Belov Shutterstock / V. Belov / V. Belov

ONCE THE UK leaves the European Union on 29 March, it’s only then that discussions can begin on what kind of trading relationship there will be post-Brexit.

There have been a few options floated around over the past few months: ‘Canada plus plus plus’, and ‘Norway plus’ being the most common of the two.

But the Norway Plus option has been referenced repeatedly since a Brexit deal was struck: why, when we’re not even at the trade part of talks yet? The short answer is: politics.

Ahead of the House of Commons vote, it looks like Prime Minister Theresa May’s plan doesn’t have the support to gain the 320 votes needed to pass.

So Tory backbencher Nick Boles has been suggesting that instead of the transition period between 29 March 2019 and 31 December 2020 (which could be extended under the Brexit deal), that the UK should take the Norway model route.

This would mean joining the European Free Trade Association (EFTA) and then the European Economic Area (EEA) – more on these later, as it’s a bit complex (you need to be either in the EU or the EFTA to be in the EEA).

The Norway Plus option is being considered because it’s seen as a way of sweetening the current Brexit deal, which both Remainers and Brexiteers are unhappy with.

Note: There’s been a lot of confusion that the Norway Plus deal would be an alternative to the Brexit Withdrawal Agreement that parliament will vote on 11 December, but this isn’t the case. The Withdrawal Agreement needs to be approved, and only then could they could progress to implementing a Norway-style relationship. Norway’s model is mostly about trade – the EU-UK’s future trading relationship can only be discussed after the UK leaves on 29 March.

In an unlikely Cabinet alliance, Remainer Amber Rudd and Brexiteer Michael Gove are looking at the plan, and crucially, DUP leader Arlene Foster also said her party would consider the Norway option.

But it’s been met with skepticism from most quarters, and added to that scepticism is the put down from Theresa May herself on the Norway option:

“What you see in the political declaration is what would be a deal for the United Kingdom that is not Norway, it is not Canada, it is a more ambitious free trade agreement than Canada, and it ends free movement – which Norway doesn’t do,” she told reporters on her way to the G20 summit in Argentina.

You talk about if a Norway-style strategy would bring Labour along with it – if you look at the Labour party amendment that they’ve put down to the motion on the 11 December, actually what they are doing is advocating rejecting the deal we’ve negotiated with the European Union without having any proper alternative to it.

Norway’s Prime Minister Erna Solberg also said that they would support Britain’s bid to rejoin the EFTA “if that’s what they really want”.

In February, Norway’s ambassador to Ireland Else Berit Eikeland told The Irish Times that the Norway plus deal would amount to EU membership.

Norway and the EU

In short, the Norway model means:

  • Being out of the Commons Fishery Policy and the Common Agricultural Policy
  • Being in the Single Market and paying for it, which means accepting the four freedoms of the EU (goods, services, people, and capital)
  • Paying towards EU programmes: Horizon 2020, Erasmus+, Galileo and Copernicus (worth €447 million between 2014 – 2020)
  • Liaising on justice and borders, and pay towards that through a variety of projects.

Energy-rich Norway opted against joining the EU in 1994, choosing instead to enter the EEA which binds Norway, Iceland and Liechtenstein with the EU’s member states.

EFTA (the European Free Trade Association) is made up of those three countries, plus Switzerland. EEA membership is only available to either EU or EFTA member states. So, under a Norway-style Brexit, Britain would leave the EU, join EFTA, and only then be able to rejoin the EEA as its 31st full member.

This would mean they would get full access to the Single Market and avoid tariff barriers.

But it has no say in the rules and must adhere to the EU’s four freedoms: free movement of goods, capital, services and persons with its fellow members.

That first option is going to pose a problem for staunch Brexiteers: limiting free movement is seen as May’s number one priority in Brexit talks, and she’s used that feature of the current Brexit deal as its main selling point.

The big advantage for Britain if it became a member of the EEA would be that its financial hub in London remains undisturbed, it would be outside the Common Fisheries Policy which it has pledged to leave, and would also be outside the Common Agricultural Policy.

Although Norway is outside the Common Fisheries Policy, it has a separate symbiotic fishing agreement with the EU that allows EU trawlers to fish in Norwegian waters in order to avoid tariffs on its fish exports to the EU.

The UK government’s own impact assessment found the Norway option would be the least damaging option in terms of economic harm.

What’s the ‘plus’ part then?

The Norway deal in itself isn’t enough to solve all Brexit solutions – it’s hard to find one that would do that, to be fair.

Mainly, the Norway option doesn’t deal with the problem of the backstop and the Northern Ireland border, as Norway isn’t in the customs union. So the solution that’s being talked about is the Norway option and a customs arrangement, hence the ‘plus’.

The customs union means taxes, or tariffs on trading goods is fixed if you’re an EU member. This means that goods can be transported from between EU member states without additional costs or delays.

Although the customs union and the single market are closely linked – with the former being described as “a foundation” for the latter – they are not integral to one another.

Theresa May has promised that they would leave the Customs Union in order to strike up new trade deals around the world, and instead agree to a “customs arrangement” or deal with the EU that would avoid customs checks along the Northern Ireland border.

What about the garlic?

shutterstock_552242461 Shutterstock / Marian Weyo Shutterstock / Marian Weyo / Marian Weyo

A UK Brexit committee were told earlier this year that the number one trading problem between Norway and Sweden was garlic, as a way of illustrating how problematic and intricate trading between two jurisdictions can be.

You might have heard about Dublin man Paul Begley, aged 46, who in March 2012 was jailed for six years over a €1.4 million scam involving the importation of garlic.

Begley avoided paying customs duty on more than 1,000 tonnes of garlic from China by having the shipment labelled as apples. 

The import duties on apples are just 9%, while corresponding taxes on foreign garlic that’s imported into the EU can be as high as 232%. 

Around 300,000 tonnes of garlic are produced each year in the EU, compared to roughly 23 million tonnes worldwide. Spain produces 200,000 tonnes of the EU total, followed by Italy and France; EU imports garlic mainly from China and Argentina.

The EU’s longest land border with a different jurisdiction is between Norway and Sweden and is a thousand-mile frontier.

The garlic was legitimately shipped to Norway, where there is no garlic import tax, and then smuggled into Sweden and the rest of the EU by lorry.

Kristen Hoiberget, who runs the customs operation at Svinesund, told the BBC that the average wait time at a customs check in Norway is eight minutes: ”I don’t think there’s any border in the world that’s so smooth.” 

- with reporting from AFP

Brexit-banner-image_Final (1)

Readers like you are keeping these stories free for everyone...
Our Explainer articles bring context and explanations in plain language to help make sense of complex issues. We're asking readers like you to support us so we can continue to provide helpful context to everyone, regardless of their ability to pay.

Close
17 Comments
This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
Leave a Comment
    Install the app to use these features.
    Mute John Murphy
    Favourite John Murphy
    Report
    Aug 28th 2019, 11:36 AM

    There could be very good value to buy a car in the UK so.

    310
    Install the app to use these features.
    Mute Arya
    Favourite Arya
    Report
    Aug 28th 2019, 12:07 PM

    @John Murphy: this whole Brexit is just a mess. Hey where is David Cameron?

    75
    Install the app to use these features.
    Mute RJ
    Favourite RJ
    Report
    Aug 28th 2019, 12:13 PM

    @John Murphy: it went from .904 to .91, plumet lol, eeyyyaaaa

    162
    See 6 more replies ▾
    Install the app to use these features.
    Mute CJ Stewart
    Favourite CJ Stewart
    Report
    Aug 28th 2019, 12:23 PM

    @John Murphy: i wouldn’t buy a bike or a scooter from the Uk…least alone a car….in fact..I would rather walk

    17
    Install the app to use these features.
    Mute kevinhunt101
    Favourite kevinhunt101
    Report
    Aug 28th 2019, 12:30 PM

    @John Murphy: just before oct, then I’m sure vrt changes will be coming to screw your average joe as per usual

    30
    Install the app to use these features.
    Mute John Murphy
    Favourite John Murphy
    Report
    Aug 28th 2019, 12:32 PM

    @RJ: that’s true. It was lower last week. If the markets truly believe a ‘no deal’ is certain, then sterling would probably be on par with the euro or worse.

    23
    Install the app to use these features.
    Mute DERRY1973
    Favourite DERRY1973
    Report
    Aug 28th 2019, 1:07 PM

    @Arya: lying on a beach in the south of Spain if he has any since

    9
    Install the app to use these features.
    Mute Robin Tobin
    Favourite Robin Tobin
    Report
    Aug 28th 2019, 1:49 PM

    @John Murphy: already done that saved €7000 even after paying vrt

    15
    Install the app to use these features.
    Mute John Mulligan
    Favourite John Mulligan
    Report
    Aug 28th 2019, 5:04 PM

    @Arya: he’s feeding the pigs.

    1
    Install the app to use these features.
    Mute Derek Goulding
    Favourite Derek Goulding
    Report
    Aug 28th 2019, 11:41 AM

    1% does not constitute a “plummet”

    258
    Install the app to use these features.
    Mute JustOneScoop
    Favourite JustOneScoop
    Report
    Aug 28th 2019, 11:53 AM

    @Derek Goulding: does if your playing big on the currency markets monaaay

    145
    Install the app to use these features.
    Mute Bob Earner
    Favourite Bob Earner
    Report
    Aug 28th 2019, 11:57 AM

    @JustOneScoop: Which, with the current situation of a No Deal Brexit looking more likely, you can bet your a$$ is happening.

    21
    See 3 more replies ▾
    Install the app to use these features.
    Mute The Quare Fella
    Favourite The Quare Fella
    Report
    Aug 28th 2019, 12:07 PM

    @Derek Goulding:
    True. Silly reporting.
    It’s now $1.1005, off half a cent since the announcement and up from below $1.08 earlier this month. The headline makes it appear like Black Wednesday.

    39
    Install the app to use these features.
    Mute Paul
    Favourite Paul
    Report
    Aug 28th 2019, 12:53 PM

    @Derek Goulding: there is approx £70 billion worth of UK pounds in circulation and the stock market is roughly £4 trillion. 1% is a lot in that context.

    22
    Install the app to use these features.
    Mute Dow Dubrov
    Favourite Dow Dubrov
    Report
    Aug 28th 2019, 2:42 PM

    @Derek Goulding: it’s a plummet when it weakens and volatility when it strengthens

    4
    Install the app to use these features.
    Mute gerard carey
    Favourite gerard carey
    Report
    Aug 28th 2019, 11:43 AM

    Hardly call that “Plummets”
    Its 3 pence stronger than it was 3 weeks ago.,

    160
    Install the app to use these features.
    Mute Shawn O'Ceallaghan
    Favourite Shawn O'Ceallaghan
    Report
    Aug 28th 2019, 12:00 PM

    Actually took a nose dive 2 weeks and recovered from 1.06 to 1.11

    45
    Install the app to use these features.
    Mute David Jackman
    Favourite David Jackman
    Report
    Aug 28th 2019, 12:54 PM

    Not great value for the ex pats who are living in Spain and France. I bet their sorry that they voted for Brexit now.

    43
    Install the app to use these features.
    Mute Seamus Gallen
    Favourite Seamus Gallen
    Report
    Aug 28th 2019, 1:33 PM

    @David Jackman: “they’re” not “their”

    31
    Install the app to use these features.
    Mute Marc Power
    Favourite Marc Power
    Report
    Aug 28th 2019, 2:50 PM

    @David Jackman: immigrants… not ex pats

    20
    Install the app to use these features.
    Mute Raymond Dennehy
    Favourite Raymond Dennehy
    Report
    Aug 28th 2019, 1:06 PM

    Suspending parliament is an undemocratic move by a wannabe dictator. This could cause severe civil unrest in the UK. Can the Queen deny his request, bnow that would be an interesting conversation.

    28
    Install the app to use these features.
    Mute Skimothy
    Favourite Skimothy
    Report
    Aug 28th 2019, 12:34 PM

    Was it not lower than this 2 weeks ago?

    20
    Install the app to use these features.
    Mute WoodlandBard
    Favourite WoodlandBard
    Report
    Aug 28th 2019, 12:25 PM

    Weird article. By the look at the chart there’s a steady rise in value since early August. No need to waste fuel for a shopping spree at Newry or Enniskillen just yet, or go mad on Amazon UK.

    21
    Install the app to use these features.
    Mute Bob Earner
    Favourite Bob Earner
    Report
    Aug 28th 2019, 11:50 AM

    Some people just made a hell of a lot of money…….

    Same as when Nigel, even after knowing the exit polls had his side winning, went on telly to say they looked like they were losing and some very wealthy people made an absolute killing

    https://www.theguardian.com/politics/2018/jun/25/nigel-farage-denies-shorting-value-of-sterling-on-night-of-brexit-vote

    26
    Install the app to use these features.
    Mute Doire
    Favourite Doire
    Report
    Aug 28th 2019, 12:54 PM

    I hope whole thing collapses on its knees. Bring it on its no more than they deserve.

    30
    Install the app to use these features.
    Mute Michael Herron
    Favourite Michael Herron
    Report
    Aug 28th 2019, 6:12 PM

    Reminds me of the time I stepped off a kerb and plummeted onto the road below. The wind rushing through my hair, it was magical.

    11
    Install the app to use these features.
    Mute Andrew O Grady
    Favourite Andrew O Grady
    Report
    Aug 28th 2019, 12:31 PM

    Was in local post office lady in front paid €114.20 for £100 she asked and was told thats what machine is showing to charge !

    7
    Install the app to use these features.
    Mute Trevor Beale
    Favourite Trevor Beale
    Report
    Aug 28th 2019, 12:44 PM

    @Andrew O Grady: Was in belfast saturday and £100 was €109 from an atm.

    17
    Install the app to use these features.
    Mute Al Madzer
    Favourite Al Madzer
    Report
    Aug 28th 2019, 1:15 PM

    @Andrew O Grady: post office rates are higher because they ‘don’t charge commission’

    16
    See 2 more replies ▾
    Install the app to use these features.
    Mute ForeverFeel1ng
    Favourite ForeverFeel1ng
    Report
    Aug 28th 2019, 3:10 PM

    @Andrew O Grady: Post Office doesn’t offer the real FX rates

    1
    Install the app to use these features.
    Mute Darren Forde
    Favourite Darren Forde
    Report
    Aug 28th 2019, 3:22 PM

    @Trevor Beale: so much for the post office being commission free

    3
    Install the app to use these features.
    Mute CJ Stewart
    Favourite CJ Stewart
    Report
    Aug 28th 2019, 12:21 PM

    …good value for us….and good value for the brits !

    7
    Install the app to use these features.
    Mute Darren Forde
    Favourite Darren Forde
    Report
    Aug 28th 2019, 3:19 PM

    Is it a good time to buy pounds now, or should I hold?? Was thinking 5k for a couple years?

    6
    Install the app to use these features.
    Mute Lionheart1
    Favourite Lionheart1
    Report
    Aug 28th 2019, 5:58 PM

    @Darren Forde: Buy Buy Buy.

    3
    Install the app to use these features.
    Mute SEO DUBLIN
    Favourite SEO DUBLIN
    Report
    Aug 29th 2019, 10:55 AM

    It was just a waiting game, I can see the UK going into the deepest darkiest Recession it has ever seen…

    3
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.

Leave a commentcancel

 
JournalTv
News in 60 seconds