The EFTA countries show how hard Brexit will be for Britain

NORWAY offers much to envy. The food is tasty, public services are great and the people are impossibly good-looking. Its trade policy looks equally desirable. Though it trades heavily withthe EU, Norway can also strike trade deals all over the world, either operating in concert withthe three other members of the European Free Trade Association (Iceland, Liechtenstein and Switzerland) or on its own. Members of EFTA have dozens of deals, including two with China, with which the EU cannot even start negotiations.After it leaves the EU, Britain will look much like an EFTA country: a rich economy with close links to Europe, but also seeking trade deals elsewhere. It is superficially an attractive prospect. Yet EFTA’s half-in-half-out relationship withthe EU hinders its trade as much as it helps.EFTA’s flexibility in trade stems from its odd relationship withthe EU. Switzerland has a series of bilateral agreements, whereas Norway, Iceland and Liechtenstein are part of the single market through the European Economic Area (though with opt-outs for agriculture and fisheries). Crucially, however, all are outside the EU’s customs union, an agreement which regulates...Continue reading

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