UK Unlikely to Get Equally Good EU Single Market Deal as Norway - Economist

MOSCOW (Sputnik) – The United Kingdom will not be able to conclude as good a deal with the European Union on staying in the EU single market as Norway, Peter Dixon, a senior economist at the Commerzbank AG, told Sputnik following reports that Oslo had warned Brussels against giving in to London's demands for Norway-model trade deal.

"The UK will never get as good a deal on access [to the EU single market] as Norway because the UK is not (currently) prepared to accept free movement of labour, and the EU’s view is that such an arrangement would not work for the UK, which is a larger and more complex economy than Norway. The UK will thus push for the best possible free trade agreement with the EU which pays more attention to services, whilst the EU continues to look for a deal which ensures its own best interests," Dixon said.

Dixon noted that Norway’s negotiating power was "limited."

"Norway is a very small player compared to the UK, which has much stronger trade and financial links with the EU. If a deal between Brussels and the UK risks ruffling a few Norwegian feathers, the likelihood is that the EU27 will look to its own interests first. Moreover, the negotiations between the UK and EU27 do not include Norwegian representatives," the economist explained.

He concluded by suggesting that UK Prime Minister Theresa May and her government were pushing for an agreement which offers less access to the EU single market than Oslo currently enjoys.

On Tuesday, The Guardian newspaper reported, citing diplomatic sources, that Norway had made repeated representations to the European Union over fears that a favorable EU offer to London concerning a post-Brexit trade deal might cause Norway to renegotiate its own agreement with the European Union. 

Norway is not an EU member state but is tied to the bloc through its membership of the European Economic Area (EEA). The Norwegian-EU EEA agreement allows Oslo to be in the EU single market, but the country also accepts free movement of EU nationals and makes significant financial contributions to the European Union.

READ MORE: Majority of UK Citizens Support Remaining in Single Market, Customs Union — Poll

Brexit negotiations between the United Kingdom and the European Union started in June and are due to be completed by the end of March 2019.

In December, the sides finished the first phase of talks, which included a discussion on the issue of citizens' rights. The sides subsequently moved to the second phase of the talks, which is dedicated to the transition period in EU-UK relations after Brexit, and their future long-term trade and security cooperation.

Despite the long-awaited progress in the talks, both sides have suggested the possibility of a hard Brexit — the United Kingdom's withdrawal from the European Union without a mutually favorable trade agreement.

The views and opinions expressed by Peter Dixon are those of the expert and do not necessarily reflect those of Sputnik.