Norway Not Enough

One of our less thoughtful MPs, Nick Boles is making a persistent fool of himself by advocating “Norway for Now”, in which he pitches to the UK that we will join EFTA, sliding over our EEA membership and make a bunch of changes, thowing our weight around and then after a while we will leave and do something else. Norway wasn’t really consulted, but responded by diplomatically telling us to shit or get off the pot. We can probably join EFTA, if we like EFTA and want to make that our new home. We can’t join in bad faith with the express intent of mucking about and then leaving. The EFTA council must be unanimous in approving new members of EFTA.

The bottom line is we will not succeed in joining EFTA if we have a stated intention to leave it.

Lets imagine for a moment that the UK government acted with good faith (imagine!) and joined EFTA. Would we be fine, able to trade frictionlessly with all the single market parts of the aquis but not the political stuff (I have no idea what political stuff we don’t want or why the single market isn’t considered political but lets run with this). Can our trusted traders do cross border trade with a minimum of friction? Well nope. The trusted trader scheme (as MPs like to call it) or Authorised Economic Operator scheme (as it is actually called) is an EU scheme. It is a benefit that accrues from our membership of the EU. Can we be in the EU AEO scheme when not in the EU? No. No we can’t. Can we be in it if we sign a withdrawal agreement? No. Can we be in it if we get a deal on a future relationship? No.

Norway is one of the countries that the EU has a mutual recognition arrangement with for AEO schemes. That is part of the frictionless process that allows pre-declaration and driving straight through the border.

“The EU has concluded and implemented Mutual Recognition of AEO programmes with Norway, Switzerland, Japan, Andorra, the US and China. Further negotiations are currently taking place or will be launched in the near future with the other most important trading partners. In addition, the EU is providing technical assistance to a number of countries to prepare them to set up AEO programmes.”

So, just being in EFTA/EEA like Norway is not sufficient by itself to get trusted trader access through EU customs.

So what is the latest on the way AEO is being treated by the UK government? Well, following the budget apparently we are going to speed up DIT administration halving the time it takes for HMRC to admit UK companies to the EU AEO scheme that we currently participate in

“HMRC will halve the time it takes companies to become Trusted Customs Traders from 120 to 60 days, delivering the UK’s ambition to be a world leader in global customs administration.”

There appears still to be no recognition that the AEO scheme is a benefit that accrues from our membership of the EU. We would have to set up our own red white and blue AEO scheme and ask the EU to mutually recognise our brand new untested trader scheme. If we welch on the financial settlement might cause our request to fail the laugh test. I know if I was sitting on the EU side of the table I would expect the full settlement of current obligations in cleared funds in the EU coffers before starting the meeting.

Some time ago I wrote to Jeremy Hunt pointing out that you can’t expect AEO to solve problems caused by leaving the EU when AEO is a benefit of being in the EU. He acknowledged that I was right, and then said it was a matter for the negotiations, which wasn’t unreasonable back in April 2017, but we kinda need some reality about this now.

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