European Economic Area: UK Membership

Robert Neill Excerpts

Monday 6th November 2017 Commons Chamber

[Stephen Kinnock]

I agree absolutely with my hon. Friend. On the automotive sector, we know that a WTO-based Brexit would add 10% to the cost of every car we export to the EU. What is more, given the complex, integrated supply chains the automotive industry relies on, there would be tariff and non-tariff barriers on every component that crosses the border. The result would indeed be catastrophic.

[Robert Neill (Bromley and Chislehurst) (Con)]

rose—

[Stephen Timms (East Ham) (Lab)]

rose—

--- Later in debate ---

[Stephen Kinnock]

The EFTA court exists as a sovereign body. It of course takes some of its guidance from the European Court of Justice. Nevertheless, were the UK to have judges on the EFTA court body, it would clearly have extra clout and the ability to exercise its sovereign right to interpret the guidelines that come from the ECJ in such a way that suits the membership of EEA and EFTA.

[Robert Neill]

Is not the critical issue that many courts may choose to follow decisions of those with similar jurisdictions? Our courts have historically done that, but with the decisions of common law courts. The EFTA court, however, is institutionally separate from the ECJ and therefore not subject to its direct jurisdiction—is that not the important distinction?

[Stephen Kinnock]

The hon. Gentleman hits the nail on the head. I would add that EU member states are required to refer rulings to the ECJ, whereas EEA-EFTA states are not required to refer rulings to the EFTA court. This is a vital distinction, because it has significant implications for the functioning of the two markets. The EU single market is predicated on the treaty of the European Union, with its commitment to ever closer union. The EEA, however, is governed by the EEA agreement, article 1 of which states that the aim of the EEA is to:

“promote a continuous and balanced strengthening of trade and economic relations between the Contracting Parties”.

The fundamental differences between the founding mission of the EU and the founding mission of the EEA mean that for the EU the four freedoms are indivisible, whereas for the EEA they are negotiable. This, in turn, means that the EEA membership would allow a post-Brexit Britain to square the circle between market access and sovereignty when it comes to that most thorny of issues, the free movement of labour.