Monograph No 1

Monograph 1: Single Market participation and free movement of persons.

•Contrary to claims by the Commission, including Donald Tusk and Angela Merkel, freedom of movement provisions are negotiable.

A legal base within the EEA Agreement exists for a settlement. After the Dano Case the ECJ declared that the treaties and secondary legislation had "qualified and limited" freedom of movement. Articles 112 and 113 of the EEA agreement open the door to “safeguard measures” and negotiations. On 10 March 1995, the EEA Council recognised that had "a very small inhabitable area of rural character with an unusually high percentage of non-national residents and employees. Moreover, it acknowledged the vital interest of Liechtenstein to maintain its own national identity". It thus concluded that the situation "might justify the taking of safeguard measures by Liechtenstein as provided for in Article 112 of the EEA Agreement". Under the current arrangement, Liechtenstein issues a limited number (less than 100) of residence permits for economically active persons and a very much smaller number for economically non-active persons.

It matters not that Liechtenstein is a micro-state. It is a fully-fledged contracting party within the terms of the EEA Agreement. What applies to one legally can apply to any or all. Liechtenstein is an EFTA State within the EEA.

What exactly are “safeguard measures”? These are actually much vaguer than the name suggests and also much more common. Details are in the original document. They are not a barrier to continued immigration control in Liechtenstein.

The sheer size of Liechtenstein, which is not much bigger than a provincial town, is not a barrier either because Switzerland was also granted immigration control in 1994 under Protocol 15 of the EEA Agreement.1. What is remarkable is the way that Article 112 is entirely dynamic, being invoked by Iceland and praised by Martin Schultz.2

•There is a possibility that other members states could block the transition of the UK from EU member of the EEA to Efta member – assuming that the UK was able to rejoin Efta.

So far, we have taken our advice from the Efta Secretariat on this, which takes the view that transitional arrangements are nowhere set out in the EEA Agreement, and will thus have to be settled politically. The evidence for this rests with the EEA Agreement of 1992, when Austria, Finland, Sweden and Switzerland were also members of Efta, becoming members of the EEA by

1 It is a matter of record that, after a referendum, the Swiss government was unable to ratify the EEA Agreement and its name was removed from Protocol 15. Had Switzerland not failed to ratify, the likelihood is that both countries would currently enjoy exclusion from freedom of movement. Certainly, unilateral safeguard measures are currently being sought by the Federal Government as a resolution to the 2014 referendum on limiting immigration.22

2 On 15 December 1995, via Regulation No 2907/95</a>, the Commission invoked Article 112 on its own account, making the release for free circulation of salmon of Norwegian origin conditional upon observance of a floor price.

virtue of their Efta membership as they joined the EU. There was, therefore no issue to deal with on transition. Switching the names from one pillar to the other was dealt with as a minor administrative adjustment.

One might take it that, in view of the positive response from Schultz to the Swiss proposal to introduce unilateral safeguard measures, and the recent statement by French finance minister Michel Sapin, declaring that everything will be on the table in the future talks with the UK, including freedom of movement, there may be some political support for a seamless transition.

•But imposition of controls, by itself – enabled by leaving the EU - does not, in itself, bring immigration under control: illegal immigrants can melt into their own resident communities and disappear.

Those who hold that we must abolish unrestricted freedom of movement need to understand that imposition of controls, does not, in itself, bring immigration under control. Enforcement of immigration controls and a substantial raft of other measures will be required.

•The initial exit settlement is only an interim measure, adopted for the purpose of easing our rapid exit from the EU.

And this is a temporary settlement. If the initial exit settlement is only an interim measure, adopted for the purpose of easing our rapid exit from the EU, there is an argument for accepting a sub-optimal settlement if no other outcome is available. Once we are no longer members, it will be possible to work on a longer-term settlement which deals more satisfactorily with the freedom of movement provisions.

•What the UK needs to do now:

A fully worked-up case must be made for restrictions, using the Article 112 criteria of "serious economic, societal or environmental difficulties". In a 1992 proposal for a Council Regulation (EEC) "concerning arrangements for implementing the Agreement on the European Economic Area", procedures were laid down for implementing Article 112. It thus proposed that, where a Member State requested the Commission to apply safeguard measures, "it shall provide the Commission, in support of its request, with the information needed to justify it".37

That should provide a sufficient template for the UK in relation to its Brexit negotiations, permitting a reasoned settlement which is capable of attracting political support. The bulk of these negotiations are not conducted within the framework of the Article 50 negotiations. The EEA Joint Committee and Council is the forum. This will require some deft legal footwork if the actions of the EEA Joint Committee and Council are integrated with the UK exit settlement.

But all in all, the prospect of a managed compromise on trade and free movement of people, via the EEA Agreement, looks to be worth further exploration.

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