Article 50 receives far more attention—but a clause from a different treaty could prove the sticking point in the Brexit processby Jonathan Lis / August 16, 2017 / Leave a comment
Recent weeks have seen a number of high-profile comebacks—and to the list of Bananarama, Shania Twain and Steps, we can now add Article 127 of the 1994 European Economic Area (EEA) Agreement. Not as glamorous or radio-friendly, and currently popular only with Brexit anoraks, it is potentially far more significant for the future of Britain’s economy.
The EEA Agreement is the treaty which extends membership of the single market beyond the borders of the EU. It was signed by the EU and three members of the European Free Trade Association (EFTA): Norway, Iceland and Liechtenstein. (Switzerland, the fourth EFTA member, declined to join after a narrow referendum defeat.) It establishes membership of the single market in almost all sectors except agriculture and fisheries, and signatory countries honour the free movement of goods, services, capital and people. (Liechtenstein, with a population of just 37,000, is permitted to apply a quota on people, and other limited safeguards are possible.) The EEA is distinct from the customs union—back in the headlines this week—which, for example, allowed Iceland to sign an individual free trade agreement with China. Non-EU EEA members also use the EFTA Court rather than the prime minister’s red-lined European Court of Justice (ECJ), preserve full legal sovereignty, and do not pay directly into the EU budget.