Can you “just stay in the single market”?

A lot of people seem to believe that the UK can solve its Brexit problems by “just staying in the single market” or a similar form of words.

To put it another way, the underlying theory here is that the European Economic Area agreement gives the European single market an existence independent of the European Union, the UK is currently a member both of the EEA and the EU, and we can therefore drop EU membership and keep single market membership through the EEA without further ado. Does this make any sense?

Alex, you have a European Studies degree, something that looks like a pretty poor return on all that student loan these days! Maybe you can answer this! Well, to be honest, back in 1999 we didn’t spend very much time on the EEA and still less on the customs union, as the two biggest issues in the EU were the Euro and adding more countries to it rather than taking them away. This is my hollow laughter reading about Eurocrats mugging up on the basics after it became clear the Brexiters wanted out of EURATOM and probably UEFA and the song contest. But let’s see what I can do.

The underlying source of this is a mixture of the idea of a “two-speed” or “variable geometry” European Union, something that’s been talked about since the 1980s without being implemented, the fact that several countries (the cold war neutrals – Austria, Sweden, and Finland) joined the single market as EEA members before they joined the EU, and perhaps also that there is an Act of Parliament implementing the EEA (the EEA Act 1994), so maybe we could just repeal the 1972 European Communities Act and leave that one alone.

The problem here can be seen if you go to the front of the EEA Agreement itself. The agreement is old enough that the EEC and the Coal and Steel Community were still a thing. For simplicity I will refer to them as the EU for the rest of the post. The parties to the agreement are listed in the preamble as being the EU and its member states on one hand, and the member states of EFTA on the other. Article 2 gets more specific:

(b) the term ‘EFTA States’ means the Contracting Parties, which are members of the European Free Trade Association;
(c) the term ‘Contracting Parties’ means, concerning the Community and the EC Member States, the Community and the EC Member States, or the Community, or the EC Member States. The meaning to be attributed to this expression in each case is to be deduced from the relevant provisions of this Agreement and from the respective competences of the Community and the EC Member States as they follow from the Treaty establishing the European Economic Community and the Treaty establishing the European Coal and Steel Community.

The long sentence in (c) basically means that depending on the division of responsibility laid out in the EU treaties, some things are the EU’s business, others are the member states’, and some are shared, so you should refer to the EU treaties if you’re in doubt who is meant. The member states were all parties to the EEA agreement separately as well as jointly because, back then, the EU didn’t have legal standing to sign without them. You’ll note that EFTA itself, with even less sovereignty, isn’t even a party to the agreement.

What this tells us is that the EEA agreement is an agreement between the EU and some countries outside the EU that gives those countries the right to take part in the European single market, an EU institution. For legal reasons at the time, it had to have the member states’ signatures on it as well as the EU’s. The UK is a party to the agreement, on the EU side of the table, because it was a member state at the relevant time.

If we want to move into the other group – the non-EU parties to the agreement – we could apply for membership in EFTA, and then the EEA under Article 128 of the EEA agreement. (Article 127 covers leaving.)

1. Any European State becoming a member of the Community shall, or becoming a member of EFTA may, apply to become a Party to this Agreement. It shall address its application to the EEA Council.

2. The terms and conditions for such participation shall be the subject of an agreement between the Contracting Parties and the applicant State. That agreement shall be submitted for ratification or approval by all Contracting Parties in accordance with their own procedures.

Alternatively, we could negotiate a separate UK-EU agreement on participation in the EU single market, which might be more simple. Note that point 1 says EFTA, or indeed EU, membership is a pre-requisite for EEA membership – you need to do it first.

One thing we cannot do, though, is somehow default into being in the single market but not the EU without either applying under Article 128 having first joined EFTA, or else working out a bilateral treaty with the EU.

1 Comment on "Can you “just stay in the single market”?"

  1. If the UK had stayed in EFTA in 1972, things may have been different. EFTA may have gained greater weight as other countries may have remained in it rather than joining the EU. The Single Market, when it came about, may have been a joint EFTA – EU body. We may have been able to create a two-speed Europe or even a multi-speed Europe (if that is what the Tory Brexiteers wanted).

    But the Tories were the Party of Europe and moved the UK from EFTA to the Common Market, and then discovered that “we have always been unhappy in Europe” (according to Mrs T. May); so unhappy that they don’t want to trade or cooperate with Europe at all.


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