The Regulatory Policy Institute Research Group

The bespoke agreement option

This is an extract from a submission to the Scottish Parliament made on 15 August 2016.

One argument in circulation at the moment is that the UK should withdraw from the EEAA in order to negotiate a better, bespoke agreement with the EU. There are two points that I would make about this policy position.

First, there is the timing issue already raised. Bespoke arrangements may take a long time to be negotiated and hence might be expected to contribute to a protracted period of political and economic uncertainty. Added uncertainty can be expected to have adverse effects on investment. Such negotiations also tend to absorb significant administrative resources.

Second, whilst it is highly likely that there are arrangements that would be better for the UK/Scotland than the existing terms of the EEAA Agreement – the Agreement was, after all, negotiated and drafted a quarter of a century ago and I think that would fair to say that it is not one of the finest pieces of legal draftsmanship in existence – it should always be borne in mind that the possibility of achieving something better is accompanied by the possibility that something worse could be negotiated. One of the maxims I have used in my working life in public policy is “never underestimate the capacity of well-intentioned government to make matters worse” (and governments are not necessarily always well intentioned).

In current circumstances there are also some severe doubts about the availability of negotiating skills on the UK side. This is not just a matter of a dearth of experienced trade negotiators: the number of old-fashioned trade unionists (brought up in a culture of hard bargaining on behalf of their members) now to be found in front line politics, and who might in other circumstances have served, is much diminished.

A concrete example illustrates the possibility of ending up with something worse. In a referendum the Swiss rejected membership of the EEA at its outset and subsequently negotiated a series of bespoke agreements with the EU (reported to total over 120), including in relation to the free movement of persons. Much more recently, in referendum on 9 February 2014, the Swiss have voted to impose stricter immigration controls, but, under the terms of the relevant agreement, this has to be negotiated with the EU. Two and a half years’ later the negotiations are still ongoing. In contrast, as a Contracting Party to the EEAA, the relevant actions could have been taken unilaterally and without significant delay.

Negotiating bespoke arrangements could pose particular issues for Scotland. For example, I understand that Scottish fishermen have already expressed anxieties that the potentially beneficial effects of repatriation of fisheries policy powers will be bargained away in Brexit negotiations. My general view is that the Scottish Government and Parliament will have an easier task in monitoring developments and influencing outcomes in the context of a negotiation based on making “necessary amendments” to a relatively simple, existing Agreement than in staying abreast of the more complex, more protracted negotiations that starting from scratch would likely entail.

This last point is reinforced by the fact that the ‘off-the-shelf EEAA’ has been previously scrutinised by the Parliaments of Iceland and Norway, countries whose interests have a more than average degree of alignment with Scottish interests in some major policy areas.

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