Britain could retain access to the European single market and considerably more national sovereignty if it joins the European Free Trade Association (Efta), the president of the body’s court has said.



In an interview with the Guardian, Carl Baudenbacher urged Britain to study the advantages of joining Efta seriously. Baudenbacher’s private secretary has submitted a 19-page paper to the Cabinet Office, setting out how an updated version of Efta could be “a natural home for the UK post-Brexit”.

Speaking from Luxembourg, Baudenbacher said the Efta court over which he presides was quick, flexible, would allow the UK to leave the European customs union and preserve the sovereignty of UK law. It would also give the UK business access to the single market.

Efta currently consists of Norway, Lichtenstein, Switzerland and Iceland. Together with the EU member states they form a trading zone called the European Economic Area.

Carl Baudenbacher. Photograph: CarlBaudenbacher.com

It “is a clear route to access the single market, but you keep sovereignty with regard to common policies, and in particular to foreign trade policies because we are not a customs union. Our structure exists, the structure is well tested”, said Baudenbacher, who is Swiss.

The Efta court handles cases against Efta member countries for failing to implement the rules of the single market. “We are fast. You get a preliminary ruling within eight months,” he said.

“I am not British and I do not have role, but I think it would be worthwhile for the British to seriously evaluate the European Economic Area, and to look at the pros and cons.

“I do not see much understanding in the debate so far. The EEA and Efta is little known. Most people have not looked into it deeply.” He said some of the understanding of Efta in the UK had been coloured by a Norwegian political elite that would like to leave and join the EU.

UK ministers and civil servants have been looking at the option of joining Efta either permanently or as a temporary arrangement after leaving the EU, but Eurosceptics have so far rejected it because membership requires acceptance of the principle of free movement and an external judicial body overseeing UK law.

EU diplomats in the UK, however, are known to be lobbying ministers not to close down the Efta option, pointing out that the cost of UK contributions would be halved, forms of co-determination rights could be offered and national sovereignty would rest in national hands.

The paper Baudenbacher private secretary, Michael James-Clifton, submitted to the Cabinet Office was written in a personal capacity and says the EEA is “a workable framework for the UK”.

He writes: “There is no ‘ever closer union’. There would be no judicial oversight by the ECJ [European court of justice] once the European Communities Act 1972 is repealed. The UK could join the existing free trade agreements Efta states have signed and would have the freedom to make its own FTAs [free trade agreements] and set its own trade policy as the EEA is not a customs union.” Efta states have 27 free trade agreements covering 38 countries.

Baudenbacher said the UK judiciary could have greater influence over the Efta court’s decisions than over those of the European court of justice, because the Efta court was smaller. “If you have court of three or four, the individual judge will have more influence than in a court of 13 sitting in a grand chamber.”

He said his court was also less intrusive than the ECJ. “Our setup is more sovereignty friendly than the EU’s. There is no written obligation on any court of last resort to make a reference to us, and our rulings in these reference cases are strictly speaking advisory. There is no direct effect and no primacy of EEA law, and if you do not implement an infringement judgment there is no possibility to impose a penalty payment. That shows greater flexibility.”

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He acknowledged Efta members were required to follow EU commitments on free movement, but said he saw the potential for change.

“Right now there is not such a big difference between the EEA and the EU,” he said. “Our court has also accepted the free movement of persons, particularly in relationship to workers and the right to reside. But European citizenship is not, as such, part of our setup. There is a difference in that regard.”

He said he could see possible reform of free movement ahead. “Speaking as a citizen and consumer of media, and not as a judge, I see that Donald Trump has won the US presidential election. Immigration was a big issue there and a lot of economists are critical of the current system in Europe.

“The Bruegel thinktank in Brussels argues that free movement of goods, services and capital is economically motivated, but free movement of persons is politically motivated. So there are new arguments.”

He also said his court, which operates in English, largely followed UK common law principles.

“The Efta court was not set up in a historic vacuum,” he said. “The Efta way of thinking has always been dominated by the idea of free trade and we do not carry a French civil law rucksack. That becomes manifest, for instance, in our judicial style.

“We have to reason our judgment because we are small. We must try to convince our audiences. We cannot just give judgment on a few pages, so that is already a parallel with a common law court.”

Baudenbacher was sceptical of claims the UK could simply leave the EU and remain a member of the EEA without applying to join Efta. “According to international law the Norwegians, Icelanders and Liechtensteiners would have to have a say on this,” he said. “That the UK would automatically become part of the Efta pillar is hard to imagine. The UK would have to reapply.”