Robin McAlpine: Why joining EFTA instead of the EU could be the answer for Scotland

CommonSpace columnist and Common Weal director Robin McAlpine says the Scottish independence movement should seriously consider the merits of joining the European Free Trade Association (EFTA)

SINCE the Brexit vote, my view on where we were going to go next has been consistent and unwavering. At the same time, our White Paper Project work on some of the more difficult policy issues around Scottish independence started to suggest quite a specific direction.

And separately from both, my reading of polling data and trends also suggested a specific direction we should consider.

All three lines of thinking, independently and for different reasons, have arrived at exactly the same place. But I've barely mentioned it out loud because I didn't want to be divisive.

It could solve our trade problems, our Brexit problems, our 'Europe's bad for Scottish fishing and agriculture' problems and more.

Now I learn from a few sources that, in fact, a number of senior people inside the SNP have been going through much the same thinking process as me and ended up in the same place. So I think it really is time to say it out loud.

That place is EFTA [European Free Trade Association]. It could solve our trade problems, our Brexit problems, our 'Europe's bad for Scottish fishing and agriculture' problems and more. If more people understood the options better, I think it would be really quite popular. So let's have an open-minded discussion.

For a little background, at the last referendum I favoured the EU position over EFTA, but mainly because I just didn't really want to rock the boat on an issue I felt ambivalent about. And despite my major reservations about the EU, I voted Remain.

But a lot has changed. Let's start with my assumption on Scotland's post-Brexit trajectory. Unless we now manage to hold and win a referendum on Scottish independence, negotiate a full date for independence and terms of separation, create a viable functioning nation state that meets EU criteria and then negotiate terms of membership of the EU all within the next two years, we're out of the EU.

Some of you will instinctively rebel against this and feel there is a way, some way, that Scotland could have seamless EU membership. There isn't.

If more people understood the options better, I think it would be really quite popular. So let's have an open-minded discussion.

The best case scenario is that somehow we were able to join EFTA before being part of a complete UK exit. The worst case scenario is that we leave the EU as part of the UK, join EFTA as a holding position and then negotiate EU membership from there.

So that road leads to EFTA, even if not as a final destination. But when you look at campaign tactics, this is actually rather attractive. We're definitely losing people who previously supported independence but post-Brexit don't. They may not be enormous in number (one in eight independence supporters perhaps) and some may come back.

But as we may be rushing into a referendum it could be very close and we might need every vote we can get. Admitting that on independence Scotland will be in EFTA and that we would then have to choose a route forward from there offers reassurance that Eurosceptics would still have some degree of agency on the EU issue if they vote for independence.

An option to nail home this message to waverers is floated in the first draft of our White Paper. It would involve resolving the EU question as part of a major three-year participative constitution-building process, possibly with a confirmation referendum at the end.

But it's when you come to some serious policy issues that the case for EFTA begins to really solidify.

The best case scenario is that somehow we were able to join EFTA before being part of a complete UK exit.

First of all, I want to make a plea to the movement to take tricky issues more seriously – borders, trade, tariffs and so on. These are real issues that won't disappear through the power of rhetoric.

So if you think that a bit of judicial picking-apart of the export figures will make the whole 'England is your biggest export destination' stuff go away, you need to recalibrate your thinking. There are certainly big question marks (data in Scotland is so woeful on so many things that it is hard to prove something one way or the other...).

And sure, there are aspects of the export figures which are absolutely not what you'd generally think 'exports' are. For example, out of every pound of exports about 15p is the export of electricity. Somehow I doubt the UK will be putting a tariff on that given its energy security problems.

And then another large amount is money transfers like English mortgage holders paying their mortgage to banks registered in Scotland. Nevertheless, exports to the UK really are much more important to us at the moment than exports to the EU and we need to take that seriously.

There is a very straightforward solution to this which solves all these problems and that's to agree a British Isles Trade Zone. The only way that there would ever be tariffs on cross-border trade would be either if the UK insisted (and it exports more to us than we do to it so that would make no sense other than more pointless Project Fear nonsense) or if Scotland was compelled.

The worst case scenario is that we leave the EU as part of the UK, join EFTA as a holding position and then negotiate EU membership from there.

And Scotland cannot be compelled to impose tariffs unless it is inside a customs union (the free market is anyone in the EU trading with each other, the customs union is the line around the EU which defines how EU members trade with anyone outside the EU).

Conveniently, EFTA is precisely inside the single market but outside the customs union. There is a fee to pay, but that fee gives all the rights of the single market (including free movement of people). But EFTA members are completely free to agree their own trade deals with anyone outside the EU.

In fact, EFTA already has 27 major international trade agreements and Scotland would inherit all of these upon membership. It also seems likely to me that EFTA will end up with a tariff-free trade agreement with the UK (EFTA has no incentive to 'punish' the UK for leaving the EU and will be keen for free market access, and right now the UK would sign a trade deal with Darth Vader if it was on the table).

So it's likely that EFTA would solve our rest-of-UK trade problem for us. And if it didn't, we'd be entirely free to negotiate a deal ourselves.

Now, EU nation states do have individual external trade agreements in special cases and a British Isles Trade Zone could be agreed from inside EU membership – but the EU (through each of its individual nation states) would have a veto. The process would be much more uncertain and much messier and more time-consuming.

I want to make a plea to the movement to take tricky issues more seriously – borders, trade, tariffs and so on. These are real issues that won't disappear through the power of rhetoric.

It won't definitely solve all our campaigning problems – the UK could refuse an EFTA deal and take the same petty line it did over Sterling, claiming it won't make a deal even though it will. But at least we're not giving Spain a veto as well.

In addition (and it really is time for the more evangelical pro-EU people to start to engage seriously with policy problems that result from the EU), we'd have single market access but be outside the Common Agriculture and Fisheries Policies. That would be hugely advantageous for Scotland.

(In fact it's a bit of a bug bear of mine that in Scotland we seem to have wholly given up on any critical assessment of the EU. For example, I'd have thought that ending CAP would be seen by the Greens as an enormous win.)

The arguments against EFTA fall into two categories. One is the 'seat at the table' argument. For me that is an attractive argument if you personally want to fill that seat, get your picture taken with all the other leaders and enjoy all of the pomp and circumstance that goes along with it.

But the idea that it gives much real power? How did that work out for Greece? And since in EFTA we'd be exempt from most of the policy anyway it wouldn't matter.

I've tried not to write or talk about this but it has never been far from my mind in the last seven months. Now that I know that other, senior figures inside the SNP and the wider movement are drawing similar conclusions, I think it is time we get this debate started properly.

The other is about dedication to the 'European Project'. I've met a good sprinkling of people who believe fundamentally in the pan-European project and believe that all kinds of drawbacks and downsides are worth it to protect that project.

Here I don't have many arguments. I used to believe in the project when it was largely a social one. Now it has become a corporate project, I feel little commitment. The whole project is in crisis anyway and may not last. And with varying forms of extremist government in Poland, Hungary and Croatia and with France, Austria, Holland and others all being nip-and-tuck close to the same thing, it's not anything like as attractive a project as it was.

But if you really believe, you really believe. I doubt there are words which would shake that principle. It's just that abiding to that principle now makes Scottish independence a bit harder and it is time to hear some serious answers from the hyper-EU advocates. It's easy to have principle – now tell me about cross-border trade in the UK...

I've tried not to write or talk about this but it has never been far from my mind in the last seven months. Now that I know that other, senior figures inside the SNP and the wider movement are drawing similar conclusions, I think it is time we get this debate started properly.

We've had seven months of panglossian veneration of the EU as Scotland's only bridge into civilisation. It's been a shallow and not particularly well-informed discussion so far.

EFTA solves problems the EU doesn't. The EU creates problems EFTA doesn't. EFTA imposes very few policies which harm Scottish interests while the EU does. EFTA won't campaign against Scottish independence while the EU (or some of its member states) will. And EFTA doesn't result in a political union with potential fascists while the EU certainly could.

We've had seven months of panglossian veneration of the EU as Scotland's only bridge into civilisation. It's been a shallow and not particularly well-informed discussion so far.

The independence movement knows what happens when you go into a campaign without properly debating and testing propositions. We have the time to have the debate and the testing now. Taking a little time seriously to consider EFTA as a good option for Scotland does not make you Nigel Farage. Go and have a wee read and see what you think.

Picture courtesy of Documenting Yes

Check out what people are saying about how important CommonSpace is. Pledge your support today.

Comments

Scott Egner

Thu, 02/02/2017 - 12:29

Broadly agree with this. Hearing the snp make noises about efta last year gave me alot more confidence that they weren't just lurching to the EU.

For me a 'poster" country for efta would be iceland. It has has the policy freedom to freely expand its balance sheet and also implement capital controls to protect its economy. These actions are frowned upon within the EU.

Euan McGregor Leckie

Thu, 02/02/2017 - 13:14

This is difficult to argue against. The only big omission of McAlpines as far as I can see is the political cost (which he does allude to, to be fair).
We can be sure the British unionist media will "go large" into a sustained period of indignant overdrive about an SNP "sellout of one of it's core principles" etc. However, I would suggest that could be effectively countered with the obvious and undeniable observation that when the facts change, you change your mind. The Scottish public will need no reminding that Brexit has changed the facts. It should not be assumed however, that this is a risk-free or even risk-lite strategy.
A great piece and one worthy of very serious consideration - at least..!

Adrian Simmons

Thu, 02/02/2017 - 14:03

Wholeheartedly agree with this, have been through the same thought process myself. EFTA seems like a good compromise position - for both Scotland and the UK.

But as it relates to independence, its a lot harder to argue that you're not merely suggesting the same material change as the UK is going though. Should some sanity return to the current Conservative government then the UK might also end up in EFTA, at which point that argument for even holding a referendum collapses.

Northeastloon

Thu, 02/02/2017 - 15:56

How can you safely assume that the EFTA would be able to negotiate a trade agreement with rUK significantly more quickly than the EU?

Even if it could, would this benefit outweigh the cost of having to submit to the vast majority of EU rules but have no say in their making?

Once leavers find out the above (especially requirements of free movement), why suppose they will be keen on it?

As you point out, switching to an EFTA position would significantly reduce the mandate of SNP to hold a referendum anytime soon.

kennethmac2000

Thu, 02/02/2017 - 17:40

I'm a believer in the European project and feel a strong attachment to my European identity and EU citizenship (which I am about to lose, at least in the short term). I accept that England and Wales may not be a great fit in the European Union, but I take the view that Scotland is materially different to England and Wales when it comes to our willingness to pool sovereignty in larger political entities - as is evidenced by Scotland voting Remain by *over 15 percentage points* more than England in last year's EU referendum.

A couple of more specific points:

- First of all, you make a plea to the movement to take tricky issues more seriously. It is therefore surprising that this article does not refer to the European Economic Area once. It is membership of the European Economic Area which is synonymous with membership of the single market, not EFTA membership. Switzerland is a member of EFTA but not a member of the single market. Being party to the EEA Agreement is a far greater curtailment of sovereignty than being a member of EFTA - but it seems that it's exactly this you're referring to (with remarks like "inside the single market"). You may wish to be honest and precise about this.

- Secondly, there is already going to have to be a solution found regarding trading arrangements between NI (soon outside the EU) and the Republic of Ireland (inside the EU). Won't evidence of the reality of that solution be sufficient to show that a similar solution could work between Scotland and rUK (as indeed it works today between Norway and Sweden, where cultural similarilties mean there is still a large amount of Norway-Sweden trade in spite of the customs border)?

thom cross

Thu, 02/02/2017 - 20:17

What is vital is that this discussion EFTA or EU or some third option becomes part of popular discourse. Meanwhile we must recognise the incredible global insecurities driven by the Trump ascendency. I have appealed elsewhere for EU stability and rational diplomacy in the face of the absurd reductionism emanating from Washington. This is not the time for disparate forces creating western disarray inevitable under Brexit .

mireille.pouget

Thu, 02/02/2017 - 21:03

Completely agree with kennethmac2000.
Just as I believe in an independent Scotland I believe in Europe. That simple, sorry if it is too simple for you Robin.
I am a French national, have lived here for a very long time and it seems to me that the benefits of that European "belonging" outweigh the disavantges, at least from a personal point of view but also from a collective point of view. I also feel that my life is being ripped apart (words from another EU national) by Brexit.

The assumption that people who voted Leave will accept a single market through EFTA which binds us to freedom of movement is a questionable one. The fee to which you so lightly allude, is not insubstantial. We will pay but have no decision-making power on very important issues. Is that really what we want? Being yet again second-class citizens in the European club? Certainly T May will not be able to negotiate free trade deals without accepting the 4 freedoms while the 27 EU partners will not accept that either, EFTA or EU membership. No chance.

OK, we can pander to the fisherfolks and farmers in EFTA, but hey, with a stronger EU parliament and a Scottish government at the European Council, we could renegotiate CAP and fisheries policies, which so far have been dealt with by aloof Tories who could not tell their Arbroath from their Stornaway.

I feel that the ex-yes voters who might now vote No because of Europe were either not that serious about independence (after all, we kept refuting the better-together campaign's argument that a yes vote would take us out of the EU), or they need to examine the EU's achievements a bit more seriously too. Either way if they are really keen on independence they'll have to swallow their misgivings and once we have independence they then can fight for whatever role they want Scotland to have on the international and European scene.

The UK-Scotland border issue is surely a red-herring. If the UK can negotiate an open trade border policy with Ireland then so can we.
Yes, our exports to the rUK are greater than to the EU now, but that has perhaps something to do with the fact that the UK gov controls the economic and financial levers to manipulate exports and currency, which we don't. Once independent we can also grow our exports to the EU thanks to having a seat at the table like big girls and boys, instead of being represented by Tory sceptics.

Finally, I am not sure I can campaign on the doorsteps arguing for EFTA as a better option than the EU. I feel, no disrespect to the good people of Scotland, that there is a level of subtleties that doesn't transpose very well as campaigning tactics.

At the end of the day, we are at a crossroads between two ideologies, Trump-May on the one hand and the fundamental principles on which the EC, then the EU, were created. Time to remember those. We have been a pampered generation who often forget why the European union was created. Far from perfect I grant you, but then, nothing is.
I think that Brexit, Trump and Putin threat are concentrating European politicians' minds and I very much look forward to participate in the fight to defeat the new fascism from within, not from outside European political alliances.
My views.

sidh

Thu, 02/02/2017 - 22:47

1) EFTA members are able to negotiate their own free trade agreements; they do not have to be negotiated collectively through EFTA. A Scotland-rUK FTA would be of high priority for both countries, and both countries would be fully able to negotiate such a treaty.

2) As an EFTA member, Scotland would follow the rules of the single market, but would not have to abide by the political integration of the EU (for better or worse), the common fisheries and agriculture policy, and so on. We throw away the ability to have a say on certain matters, in order to have more of a say on other matters. I think what makes this argument compelling is that it achieves a compromise between independence, European membership, and continued close ties to the rUK.

3) For committed leavers, the EU option is never going to bring them back anyway, so moving to a softer EFTA position is only going to be a boost for that demographic. But at what cost? Well, this is obviously where it gets tricky. The Scottish electorate are obviously generally pro-EU (as evidenced by the referendum), but also seem moderately tepid on the issue. The EU referendum did not elicit the large shift in favour of independence many had hoped for. I think this is the most difficult bit - how will this decision play out politically with the different demographics? It's very hard to say.

4) In 2014, the vote was on whether Scotland should be part of the UK as a member of the EU, or whether it should become independent and try to obtain EU membership on its own. The next vote, if there is one, will be whether Scotland should be a member of the UK, outside the single market (never mind the EU), or whether it should be an independent country with whatever European arrangement it will have (e.g. EFTA). The SNP mandate, which is based on there being a material change to the circumstances on which the 2014 vote was based, is fairly clear.

Arthur Blue's picture

Arthur Blue

Fri, 02/03/2017 - 07:15

Interesting article and well worth serious consideration. It would require independence, since EFTA seems cool about UK membership - the size of the UK economy is out of proportion to the others - and the current UK government is hell-bent on a non-European future. However it might also help to sell that independence, particularly among the agricultural and fishing communities, and that might just swing the vote. I would expect, though, that any serious move towards an independent Scotland in EFTA would elicit a fairly intemperate reaction from the rabbit-holers.
Whether joining EFTA would turn Scotland into a Nordic nation is another set of questions. Norway for example has no large landed estates - if you own a farm you have to live on it - and most uncultivated rural land is owned either by the local authority ( kommune ) or the state. That's because their historical development took a different form from ours, but any move by Scotland in that direction would require a far more radical approach than has hitherto been evident here.

OliviaBenson

Fri, 02/03/2017 - 01:57

EEA membership would cause issues with food exports as these fall outside the scope of the agreement.

Also, I don't think the EU will be the weaker party with an EU-rUK trade deal. rUK will pretty much take anything it can get.

Northeastloon

Fri, 02/03/2017 - 11:50

1) It would be of much higher priority for Scotland than for rUK, and as such the deal we end up getting could well be inferior to what the EU would negotiate with rUK down the line (e.g Norway largely chooses not to conduct bilateral deals due to it's poor negotiating position). Regardless of the reality, during the campaign period the UK gov will have no qualms in repeating that we will *not* be getting that quick trade deal we are after.

2) New EU treaties would require member states (i.e Scotland's) permission, so it's not clear how Scotland would ultimately be forced to accept 'ever closer union' if we really didn't want it. If we are strongarmed, well we have the option of article 50.

An additional difficulty is that under EFTA/EEA route, Scotland would be outside the customs union and therefore subject to EU rules of origin (which are often higher barriers than default WTO tariffs). This would harm Scottish manufacturing exporters, and moreover, make it less attractive to rUK firms seeking to relocate (who instead might just choose Ireland).

3) Among committed leavers, I imagine very few are of the 'lexit' sort. Immigration will therefore be a real issue, and EFTA/EEA doesn't solve this. Regardless, we need to be very careful about pandering to this demographic.

4) Leaving the single market would constitute a 'material change in circumstances' but I don't see how this would be convincing to a referendum weary electorate. Especially given that the rhetoric has centered around being dragged out the EU against our will (after which the Scot gov would be admitting they aren't really that keen on the EU after all, and implicitly, that the UK electorate made the right choice to vote leave).

MarkMcK

Fri, 02/03/2017 - 11:43

Very good piece Robin. While I am a committed supporter of the European project, I am concerned that the road-map to an independent Scotland in the EU seems very tricky indeed, littered with pitfalls, sequencing issues and opportunities for other to derail it. Aiming for EFTA membership could well be a very worthwhile step for now, and (as you say) somewhat more straightforward. ('Somewhat' is of course a relative term!)

Radish

Fri, 02/03/2017 - 13:03

I used to believe in the project when it was largely a social one. Now it has become a corporate project, I feel little commitment.

That is it in a nutshell and precisely what I think. Also, though I will vote for independence come what may, I sure don't like being held to ransom by the SNP linking an independence vote to full membership of the EU. EFTA is the halfway house that wouldn't leave me feeling like I'm being abused over the independence vote.

Justme

Fri, 02/03/2017 - 17:31

I have always had my doubts about EU membership. I have always been of the opinion that to be truly Independent we had to have no ties with the rUK, nor the EU.

Having taken your advice and read up on the EEA and EFTA it seems to me that, although we would not be shackled to the EU, there are inherent difficulties with this option. None, though, that with a little thought, and a lot of goodwill, can't be overcome. It does seem that, for some people, EU membership is more important than Independence. Really? Or are they just posturing for the sake of argument? As has already been said, I don't believe that anyone who is serious about Independence, and voted YES last time, would vote No because of the EU issue as everything will be up for grabs when we do achieve independent status.

During the 2014 campaign, I found, as I'm sure many others did, that the more divisive topic was the currency issue. I am sure that our Government is busy beavering away behind the scenes making contingency plans for IndyRef2, does anyone know if there is a blueprint for a Scottish Currency and a Central Bank? Or is it just Facebook rhetoric?

JimD

Sat, 02/04/2017 - 00:04

Sidh and Northeastloon are correct. The mandate for a referendum - 'a significant and material change of circumstances, such as Scotland being taken out of Europe against it's will.' - is efffectively gone if you go down this road.

If support for Independence is tepid at the moment, I don't see how this is going to rouse anyone.

Robin's arguements are characteristically subtle and clever, but in this case that would be the problem.

No one wishes for simplistic politics, but how is this going to play out on the doorstep and on the street? In political terms, this is 'playing the percentages'. It is reminiscent of the SNP's independence pitch, which Robin has criticised. It downplayed any visceral appeal and tried to appeal almost exclusively on the level of sound economic sense - but the economic arguements supporting the approach were not well thought through, and wilted in the heat of battle. Our opponents could easily drive a coach and horses through this change of tack and the indecisiveness it betrays.

To win the next indyref the appeal must be both more emotional and better thought through. Commonspace, as far as I can see, have done by far the best work on the economic roadmap, and I really hope senior people in the SNP are talking to Robin and Craig and considering getting their fingers out and implementing their ideas real soon. The emotional side should be based on righteous outrage that democracy only applies to England, and as usual - but never more starkly - we are being treated like slaves who have to do the UK's bidding.

There is plenty of scope for the polls to change as Brexit bites deeper. To Radish, Justme and other former Yessers who are anti-EU, the answer is simple. Vote for independence and then campaign to get out of Europe if you wish. The difference is, you have the power to make that choice as a sovereign nation, as England is doing now. Stay in the Union and you have the power to do squat.

Hold our nerve and ramp up the effort and we can do this.

RadioJammor

Sun, 02/05/2017 - 14:15

You are right that politically this would get used against, so the initial framing of joining is very important, so as to anticipate the counter - which is that joining a four country trading organisation is hardly a replacement for the EU.

This of course undermines some of the arguments for joining in the first place made here.

Rather than disagree with the idea - which i think is a good one - I think we should be more careful about how joining this organisation should be portrayed. I for one see this article as - shall we say - 'journalistically overblown' (particularly by the headline).

Joining EFTA is not "the" answer for Scotland. It has the potential to mitigate the effects of Brexit until such a time as an Independent Scotland can rejoin (or at least try to rejoin) the EU, which Scotland did not vote to leave.

That is how this should be portrayed.

Parkie

Thu, 03/16/2017 - 19:54

Very informative article, thanks for that

Ron Wilson

Sat, 11/04/2017 - 13:51

I was at a recent SNP constituency meeting and both, very senior, SNP politicians were adamant that Scotland could not seamlessly join EFTA, with EU countries having an effective veto.
Robin, would you care to comment?

CommonSpace journalism is completely free from the influence of advertisers and is only possible with your continued support. Please contribute a monthly amount towards our costs. Build the Scotland you want to live in - support our new media.