5.1 Staying in the EU Single Market after exit

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Part 1: Requirement to keep most EU laws

The EEA Agreement reproduces the parts of the EU treaties and the legislation (EU Directives and Regulations) made under them which count as being “internal market” rules. These are the rules on the free movement of goods, persons, services and capital, rules relating to employment and health and safety and labour law, EU competition law and the rules against State Aid, transport, consumer protection, environmental rules, intellectual property, company law and many other matters.

Not only the EU Treaties themselves, but all the legislation made under the relevant parts of the EU Treaties is mirrored in the EEA Agreement in vast Annexes which list the EU legislation which the EEA Member States must implement and follow. These Annexes have grown since the EEA Agreement was signed in 1992 as more and more EU legislation has been added to them. (EEA Agreement text with Annexes and Protocols)

An independent study commissioned by the Norwegian Government in 2012 calculated that, in return for its access to the EU market, Norway has had to incorporate approximately three-quarters of all EU laws into its own domestic legislation (Norway “Outside and Inside” Report 2012, at page 6):

“Under these agreements, Norway has incorporated approximately three-quarters of all EU legislative acts into Norwegian legislation and has implemented them more effectively than many of the EU member states. At the same time, Norway is neither a member of the EU nor involved in the decision-making processes to any significant extent.”

This includes not only sector-specific product and service rules, but also cross-cutting legislation in areas such as competition policy, State Aid, and intellectual property. Norway is also required to comply with EU legislation in areas not directly related to the Single Market, including elements of social policy, consumer protection and environmental standards. This includes the Working Time Directive, Agency Workers Directive and Renewables Directive.

In fact, it is easier to list the areas of the EU treaties which are not in the EEA Agreement.  First, as mentioned elsewhere, the EEA states are outside the EU Customs Union so the provisions on tariffs and on the common commercial policy of the EU do not apply to them.  Secondly, the EEA Agreement does not cover agriculture and fisheries, so the rules and regulations of the CAP and the Common Fisheries Policy do not apply to the EEA States. It is open to question, however, whether such a deal would be offered to the UK since, from the EU’s perspective, the inclusion of the UK inside the CAP provides a major net food importing market for Continental farmers and its inclusion in the CFP provides access to waters in which fishing vessels from other EU states would want to continue to fish.

Further, the EEA Agreement does not cover the Common Foreign and Security Policy or criminal justice and police and anti-terrorism cooperation.

If a key objective of the British people voting in the referendum was to take back control of our own laws, it is hard to see how continued Single Market membership after exit can possibly be said to be compatible with that objective.

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  • Harmonised interpretation and supranational enforcement
    Having required the EEA States to adopt identical laws to those within the EU over this vast range of matters representing about three-quarters of EU laws (see 5.1 Staying in the EU Single Market after exit), the EEA Agreement contains mechanisms to ensure that those laws are applied and are interpreted identically within the EEA States in accordance with the interpretation adopted within the EU. This necessarily entails a mechanism for the EEA States to follow the interpretation of EU laws by the ECJ.