Lesley Riddoch: Are Scots eyeing wrong Euro prize?

With the trade deal between Canada and the EU finally settled and political scientist John Curtice pronouncing that Scotland could remain in the EU as a successor member state, all attention is focused on Brussels.

By The Newsroom Monday, 31st October 2016, 12:44 pm Updated Wednesday, 16th November 2016, 4:47 pm

Picture: Getty

But are Scots eyeing up the wrong European prize? Might the halfway house of the European Economic Area (EEA) suit Scotland better? That question was posed this weekend by speakers from five Nordic nations at an event organised by policy group Nordic Horizons and attended by 300 people including the Cabinet Secretary for Cultural and External Relations, Fiona Hyslop.

Norwegian environmentalist Duncan Halley explained that in 1992 Norway joined the EEA (essentially the EU’s single market mechanism) as a precursor to full membership after a referendum in 1994. But fierce debate produced a no vote and the halfway house of the EEA became Norway’s permanent home.

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Iceland’s EEA entry the same year had a slightly different genesis. According to the former Social Democrat leader Jon Baldvin Hanibalsson who masterminded EEA membership, access to the European single market looked like a good way to liberalise a 1960s economy “more rigid than the Soviet Union”. But because of Iceland’s reliance on fishing and relatively recent independence from Denmark, a complete transfer of sovereignty to the EU membership was not on the cards. “People said; ‘We’ve had 600 years of European colonialism – no more.”

It took five years to negotiate the EEA agreement but according to Hanibalsson, it happened because an interim solution was mutually beneficial for the EU and small countries. EFTA members then conducted more trade with the EU than the USA and Japan combined.

From Iceland’s point of view, EEA membership has proved more useful than the full deal. EEA members are in the internal market but not the Common Fisheries or Agriculture Policies, Maastricht, the customs union or the Euro. They are not governed by the EU in areas like justice or home affairs but they do have free movement in Europe and useful educational and research funds in exchange for a financial contribution.

So might Brexiting Britain beat Scotland to the chase?

Hanibalsson thinks not; “One, Britain is too big for the EEA; two, its government isn’t keen and three, EU members would have to approve Britain joining the EEA and they’re not best pleased with Britain right now.”

It would be a different story for an independent Scotland, he thinks, and maybe more desirable. Opting out of the Common Fisheries Policy would not just please Scotland’s fishing communities, it could help ensure Scotland’s portion of the North Sea is as well protected as Norway’s portion of the North Atlantic.

Norwegian environmental scientist Duncan Halley says the Common Fisheries Policy has a terrible record protecting fish stocks in EU waters. Presently 30 per cent of stocks in the North Sea are outside safe biological limits and 93 per cent of cod are fished before they can breed. Meanwhile, according to the OECD “stocks in Norway are good” and 73 per cent of caught fish come from protected stocks – the highest proportion in the world.

Fishing boats in Norway must be owned by registered fishermen actively working at sea or actively administering boats on land. If Scotland was free to jettison the CFP, the practice known as “slipper fishing” (where owners of EU quotas trade them and receive income without actively fishing at all) could be stopped and better conservation of stocks could be achieved by having complete control over Scottish fishing waters like Iceland, Norway and the Faroes.

Fishing matters in Norway not just because it’s valuable – its second biggest export after oil and gas – but because fishing is the backbone of rural Norway and of vital importance for continued settlement of the Northern seaboard.

Perhaps Scots should consider such long-term interests before deciding which European club best suits our needs. And perhaps membership of a club dominated by small Nordic players could help Scotland shift from a market-dominated, top-down social and economic model towards a more cooperative and decentralised Nordic one.

According to Professor Mary Hilson of Denmark’s Aarhus University, Nordic cooperation flourished in areas like welfare and the arts while Europe was divided during the Cold War. Proposals for a Scandinavian defence and customs union failed in the 1950s but since the reunification of Germany created a Baltic dimension in Northern Europe they’re back on the table again. Of course, the majority of Nordic nations are EU members. But perhaps the EEA is a closer fit for Scotland than the EU? Perhaps too a viable halfway option would boost support for Scottish independence? Especially since Holyrood may not automatically retrieve powers from Europe post Brexit.

Professor Drew Scott, a member of Nicola Sturgeon’s Brexit committee speaking in a personal capacity, said Scotland might not automatically regain powers over fishing, forestry and farming even though they are devolved. “Scotland has no international legal identity so the First Minister currently can’t sign international agreements – and fishing agreements are most definitely international.” Equally, he suggested, the World Trade Organisation might object if the structure of tariffs was different within a member state and that could stymie attempts to have a different regime for farming or fishing north of the border without new legislation.

According to Professor Scott; “There might be a lot to be said for joining the EEA rather than the EU. There’s no customs union so no worry about borders with England should Scotland become independent post Brexit. The EEA won’t change in the next five years - the EU most certainly will - and inside the EEA an independent Scotland could straddle two internal markets, the UK and the EEA.”