The EEA option for Northern Ireland

While varying scenarios for the UK’s future trading arrangements with Europe have been offered both prior to and after the official triggering of Article 50, calls for a ‘special status’ for Northern Ireland appeared devoid of concrete grounding in the absence of a unified policy being presented. agendaNi explores the suggestion of implementing the ‘Norwegian model’ for Northern Ireland.

‘Special status’ for Northern Ireland has been largely dismissed in the absence of a Northern Ireland Executive to fight the case. Unlike the Scottish and Welsh Governments, each of which produced extensive papers outlining their priorities in the face of Brexit, Northern Ireland’s only official response comprised of a letter composed by then First Minister Arlene Foster and former deputy First Minister Martin McGuinness. That letter appeared to suggest that the best thing for Northern Ireland would be to maintain the ‘status quo’ of current conditions created by its place within Europe.

Both Scotland and Wales have struggled to make their voices heard as the UK presses forward with exiting the EU and that problem is intensified further in Northern Ireland, where not only were the two major parties split on whether to remain or exit the EU, but where there currently exist no Assembly as talks continue. In essence, Northern Ireland has fallen at the first hurdle of presenting their priorities even before reaching the hurdle of ensuring they are heard.

At agendaNi’s recent Brexit: Northern Ireland’s Futures event, Marte Gerhardsen, National Director of Agenda, a Norwegian think tank, outlined the benefits of Norway’s involvement in the EEA, and in doing so raised some interesting thought on its potential application to Northern Ireland.

“For us the EU is existential and not the other way around”, she explains. Norway has twice voted not to attain full EU membership and even today the majority of people would vote to retain EEA status rather than join the EU as a full member. EEA membership has been crucial to steady economic growth and the country enjoys the benefits of access to the single market, while upholding the EU’s four freedoms, competition, social and environmental rules.

Where they differ is that Norway retains control over its fisheries and agriculture sectors, as well as trade and monetary policy. For Norway, in particular, this was beneficial as these areas were identified as the most crucial elements of their economy. Large exporters of fish, oil and gas, remaining outside of single market regulations offered a liberalisation of potential trade deals within these areas, the benefits of which have outweighed tariffs and quotas.

“To be cynical we are members but without the vote”, explains Gerhardsen. In terms of Northern Ireland it has been recognised that had the UK chosen to join the EEA, it would preserve much of the status-quo of EU membership, at least as far as free movement and the single market are concerned. Cross-border trade could continue almost undisrupted, although some form of customs controls would need to exist. And as agri-food dominates Northern Ireland’s export economy, there would be disruption to existing arrangements, as well as tariffs and quotas on goods previously within the Common Agricultural Policy and Common Fisheries Policy.

While the UK has ruled out remaining in the single market, Professor of European Politics at Queen’s University Belfast, David Phinnemore, in collaboration with others, has raised the question of EEA membership for Northern Ireland to mitigate the key impacts of Brexit on Northern Ireland.

Crucial to Northern Ireland’s economic growth is the existence of an all-island market in key sectors of the economy. The physical separation between Northern Ireland’s economy and the UK market has led to further market collaboration across Ireland leading to a largely uniformed regulatory framework governing those markets. All-island collaboration extends further to free movement of labour and capital, as well as civic and societal movement.

The letter composed by First and deputy First Minister identified a range of areas that will potentially feel the impacts of Brexit, they essentially argued for the status quo to be maintained, something that is very unlikely in the face of the ‘hard Brexit’ sought by the Prime Minister. The Scottish Government has already advocated for the EEA option, and experts believe that Northern Ireland would face less challenges because of its geographical location.

The EEA option is the only current valid model that would allow for the retentions of current arrangements providing for the free movement of goods, services, capital and labour, as well as largely maintaining all-island integration in key sectors such as energy supply.
An attraction of the EEA option is that although outside the EU, Northern Ireland, as part of the UK, would remain in the single market. It would also be outside the EU’s commitment to ‘even closer union’.

While being outside of the Common Agricultural Policy will provide challenges for the agri-sector in Northern Ireland, the EEA option does not prevent Northern Ireland from benefiting from any agriculture trade deal struck between the UK and the EU. At the same time, Northern Ireland could secure in a separate deal, and  access to EU support for less prosperous regions – but would need to make a small financial contribution relative to GDP.

The EEA option does present challenges. Being outside of the customs union, rules of origin would have to be applied on trade with the EU. The exact arrangements around customs controls will likely be a key element of the UK-EU negotiations.

Negotiations would also be required on Northern Ireland’s access to programmes and areas of cooperation, including research, education and training programmes, which are not automatically included in EEA membership.

Feasibility

While the EEA option for Northern Ireland seems appropriate, largely to maintain the priorities set out by the First Minister and deputy First Minister in their letter to Theresa May, actually achieving it will require willingness on all parts. Two paths have been identified in order for it to become a reality, one would require the UK to become a signatory to the EEA Agreement, but limiting its application to Northern Ireland, and the second would require the EEA Agreement to be amended to allow for a sub-national entity to participate. Both options would require cooperation and agreement from the UK, the Republic of Ireland and the existing EU member states, as well as other non-EU member states participating in the EEA.

The EEA option appears to be the best solution for maintaining the status quo of Northern Ireland’s current circumstances although is certainly not a solution to all the challenges Brexit has raised and is still set to raise. Moreover, the political and constitutional changes needed mean that even with agreement, creating a ‘special status’ for Northern Ireland via the EEA is unlikely to be a quick process.