EFTA and after

The European Union was never primarily about a Common Market, still less about a free trade area. A free trade area presumes independent sovereign states trading with each other. The EU was designed from the start to absorb ‘member states’ into a supranational union. And the Common Market was a feint, designed to pave the way for progressive development into a single currency, fiscal and economic union and finally political union. Monnet and others were understandably implacably opposed to a genuine European free trade area.

While the original European Economic Community included six states — Belgium, France, West Germany, Italy, Luxembourg, Netherlands — Britain led the way with the parallel creation of the European Free Trade Area (EFTA): the UK, Austria, Denmark, Norway, Portugal, Sweden and Switzerland. Eventually, the UK and Denmark, then Portugal, Austria, Finland and Sweden deserted EFTA to join the EU. Today, EFTA includes Iceland, Liechtenstein, Norway and Switzerland. All share access to the EU Single Market.

EFTA came to be seen as a ‘waiting room’ for those countries not yet ready or willing to join the EU. But it can equally be seen as a staging post to exit from the EU: the UK could leave the EU and rejoin EFTA, while preserving access to the Single Market. The European Commission is keen to neutralize the EFTA option (also known as the Norway option). So watch out for ‘Associate Membership’ of the EU being offered not only to the UK but also to the EFTA states. If successful, this manoeuvre would not only kill EFTA, but also close off the smoothest route to a UK exit from the EU. It’ll be like the three card trick: oops, now it’s gone!