Norway's 'out-but-in', a model for Brexit

The small Norwegian company Nordox has prospered in Oslo for 50 years, but it now stands to lose 15 percent of its sales due to an EU deal being hammered out in Brussels, just one of many upshots of Norway's decision to remain outside the bloc.

Hailed as a model by the pro-Brexit camp, Norway rejected European Union membership in two referendums in 1972 and 1994 but it is still closely linked to the bloc through its membership in the European Economic Area (EEA).

While the EEA gives Norway's five million inhabitants access to Europe's lucrative inner market of 500 million consumers -- the EU accounts for 80 percent of Norway's exports and 60 percent of its imports -- it does not give it a vote in setting the rules.

In Brussels, Norwegians have to leave the room when big decisions are made, hard enough as it is to get the 28 EU member states to agree. 

"In the corridor while the EU education ministers are discussing (but allowed to join them for lunch)," tweeted Norwegian education minister Torbjorn Roe Isaksen in 2013, illustrating the Scandinavian country's inability to influence European decision-making.

The inverse is not true: since the creation of the EEA in 1994, some 10,000 EU laws have been integrated into Norwegian legislation, half of which are still in force. Former prime minister Jens Stoltenberg, now NATO's secretary general, in 2001 dubbed the remote decision-making "fax democracy".

"The no side won in 1994 but has lost since then without any new referendum on the issue... with a lot of integration simply running by default since we're part of an evolving inner market," says professor Oivind Bratberg, an expert on European affairs at the University of Oslo.

- Rules dictated by EU -

Agriculture and fisheries are among the few areas where Norway has retained sovereignty.

"We follow the European rules much more than the Norwegian rules," admits Nordox's managing director Lars Tomasgaard.

"All the rules that apply to us in terms of workers' protection, product registration, all these kinds of rules are dictated by the rules in the EU. They are just a carbon copy of these European rules."

The biggest problem facing Nordox, which specialises in fungicides and antifouling paints, is the Transatlantic Trade and Investment Partnership (TTIP) deal Washington and Brussels are currently negotiating. Norway does not yet know if it will be part of the agreement.

By abolishing customs duties in transatlantic trade, a deal would make the products of Norway's European rivals less expensive on the North American market, and increase North American competition in Europe, Tomasgaard says. 

"We have all the disadvantages," he insists, alarmed by the prospect of losing 15 percent of the company's sales ($110 million, 99 million euros).

The same thing goes for Norwegian salmon, one of the country's main export products, likely to become much less competitive across the Atlantic than its Scottish, Danish or Faroese cousins.

Like Iceland and Liechtenstein, which are also members of the EEA, Norway has a veto right allowing it to oppose European regulations but it has never used it for fear of the consequences.

"There is a lack of democracy," admits European Affairs Minister Elisabeth Aspaker.

"Norway is not sitting at the table when the decisions are made but still we try to have as good a dialogue as possible with the Commission, (and) we also invest time in bilateral dialogue with the member states," she tells AFP.

While there is what some see as a democratic deficit, Norway is at the same time a net contributor to European budgets, paying in 391 million euros per year in the 2014-2021 period.

- Stay in, says Oslo -

US President Barack Obama says Britain ought to remain in the EU, and Oslo agrees. 

"The Norwegian government also thinks that Britain should stay in," Aspaker says.

"There are so many challenges these days in Europe: it's about migration, it's about climate change, it's about creating new jobs. There is a need for more cooperation within innovation and research ... This whole package calls for a more united Europe, more cooperation, not less."

While Norway is cited as a model for Britain thanks to its prosperity -- owed largely to its North Sea oil -- Scandinavian eurosceptics, who obviously favour a "Leave" vote on June 23, discourage Britons from following in their footsteps.

"The EEA is better than being a member of the EU," says Kathrine Kleveland, head of Norway's "No to EU" lobby. 

"But if it were up to me, I'd opt for a bilateral deal because with the EEA you have to accept some of the EU rules and directives and the EU influence is too strong for my liking."

Included among those rules: the free circulation of workers, one of the key complaints of Brexit advocates. 

Hailing the Norwegian model as an example to follow is the result of "a great misunderstanding", says Bratberg.

"An EEA assimilation similar to that of Norway would simply not work in Britain."

It "would create more problems than it could solve: they would sort of regain formal sovereignty in not being a member, but they would create an immense democratic deficit."