U.K. Should Consider EFTA Deal to Kick-Start Post-Brexit Trade: Think Tank

  • Swiss foreign-policy think tank Foraus publishes paper
  • Association agreement with EFTA would give U.K. trade access

Queen Elizabeth II Seeks Widest Possible Brexit Consensus

Britain should consider a pact with the European Free Trade Association to kick-start its post-Brexit trading relations with 38 nations, according to Foraus, a think tank focused on Swiss foreign policy.

The U.K. could emulate the association agreement Finland had with EFTA for 25 years until 1986, said Cenni Najy, a Geneva-based senior policy fellow at Foraus. Such a setup would give Britain access to EFTA’s free-trade arrangements, without committing it to the free movement of people permitted between full members Switzerland, Norway, Iceland and Liechtenstein, he said.

“It would allow the U.K. to preserve a status quo in non-EU trade, instead of starting from scratch,” said Najy, who co-authored a study on the topic with David Phinnemore, a professor of European politics at Queen’s University Belfast in the U.K. “The natural house of Britain is EFTA.”

U.K. Prime Minister Theresa May, who intends to pull the U.K. out of the European Union’s single market for goods and services, should consider taking Britain back into EFTA, which it left in 1972 to join the EU, as a way to jump-start post-Brexit global trade negotiations, a panel of U.K. lawmakers said in March. An association agreement with EFTA, which the U.K. helped found in 1960, would be much better than falling back on WTO rules, said Najy.

Such a deal would provide flexibility to the U.K. and reassure existing EFTA members that the balance of power in the association wouldn’t shift, he said. Swiss Economy Minister Johann Schneider-Ammann said in April that if the U.K. rejoined EFTA as a full member, there would be a risk of Britain dominating the group.

“Switzerland would be particularly favorable to this option, because it has its own issues with immigration,” Najy said. An association agreement could include a “safeguard clause” to limit the movement of people, he said.

An association deal could be a precursor to full EFTA membership and potentially rejoining the EU’s single market, said Najy. Norway, Iceland and Liechtenstein are part of European Economic Area, which gives access to the single market, while Switzerland has negotiated 120 separate bilateral agreements with the EU.

As a member of the EU, the U.K. benefits from more than 40 preferential trade agreements with countries and regional groups around the world. The country will probably cease to participate in those agreements when Brexit is complete, Foraus said.

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