TELEGRAPH 18.10.07 3.Let the UK take a Swiss role in the EU By Sir Rocco Forte There are many things to celebrate about Europe. We enjoy the freedom to travel on the Continent with few, if any, obstructions. Some of us own houses, live, work and do business there. We enjoy the French wine, Spanish sun and German cars. Many of us appreciate the openness of Europe and the cultural exchanges. Many European nationals work here, bringing us economic benefits. There are considerable lifestyle benefits of being part of a "European family". And many of us would feel substantially poorer if we lost these benefits. Similarly, many nationals from the other EU member states benefit from their relationship with Britain. They value the freedom to travel and work here. And they import over £200bn of our goods and services – from pharmaceuticals to financial services. The relationship between the UK and the other EU member states is positive and mutually beneficial. If we were to adopt a looser relationship with the EU, based on trade and cooperation, whilst opting out of political and economic union, the critical question has to be, would we lose out on these benefits? The simple answer is that it would depend on how the British Government negotiated our new relationship with the EU. But it is inconceivable that, in the negotiations, they would throw away the lifestyle benefits that so many, on both sides of the Channel, value. Switzerland is an interesting "model" which we can learn from. The Swiss trade freely with the EU through agreements going back to the early 1970s – though they do retain their customs controls as they are not in the EU's Customs Union. This is, however, no block on trade. Their economy is more closely integrated with the EU than Britain's. And, principally through two sets of bilateral agreements negotiated with the EU, they have close associations in many other policy areas.* Indeed they have more bilateral agreements with the EU than any other state. The first set of bilateral agreements was agreed in 1999 and covered seven specific areas from the free movement of persons to civil aviation to overland transport. There is now complete freedom of movement for Swiss citizens in the "old" 15 EU countries and vice versa, with transitional arrangements between Switzerland and the 10 "new" EU members. The Swiss Government has, however, retained a right to impose quotas during the transitional period if they experience an unmanageable influx of immigrants from the EU. Swiss and EU citizens enjoy the benefits of mutual recognition of qualifications. And Swiss citizens who work in an EU member state have the same rights as the nationals of that EU country, covering equal wages, working conditions, taxes and social benefits. The second set of bilateral agreements included membership of the "Schengen area", which allows for the free movement of people across national borders without the need for passport checks. It involves the harmonisation of external border controls and cross-border police co-operation. The Swiss people agreed to Schengen membership by referendum in 2005 and Switzerland is due to join in 2008. Ironically, the UK and Ireland are not members of Schengen – so you could argue that, on this issue, Switzerland will be more integrated with the EU than Britain is! But even now, prior to Swiss membership of the Schengen area, even though Swiss citizens and EU citizens have to show their passports at the Swiss-EU border, they are free to move around once in the EU or Switzerland. The second set of bilaterals also included issues as far-ranging as taxation on savings, the fight against fraud, the environment, media and education. Swiss citizens can retire in the EU, provided they have sufficient financial means to support themselves, and EU citizens can retire in Switzerland under reciprocal arrangements. Swiss people can also purchase homes in the EU. I quote the Swiss experience as an example of what can be achieved through mutual agreement between the EU and a friendly European country. A British Government negotiating new terms may feel that some of the Swiss arrangements are too restrictive, whilst others are too free. That would be the choice of that British Government. Switzerland does seem to be in a "win-win" situation with the EU. It has the benefits of trade and it has the "lifestyle benefits", including the freedom to travel and work, it judges to be beneficial. But it does not have the increasing restrictions, costs and burdens that Britain is currently experiencing as a full member of the EU. As it is not in the Single Market, it does not have to worry about the EU's business regulations, though it can, of course, comply with them if it wishes to for business reasons. With the prospect of the Financial Services Action Plan, and its 42 measures, bearing down on the City of London, Zürich must indeed be relieved that Switzerland is not in the EU. Norway, the other rich western European country that is outside the EU, is in the Single Market. It is not hampered by the Common Agricultural Policy, and its grotesque waste, choosing to directly subsidise its own agricultural sector. Swiss cows are, by the way, some of the most heavily subsidised in the world. It is not restricted by the environmentally-damaging Common Fisheries Policy either – though this has more relevance for the UK than a land-locked country like Switzerland! It is also free to develop its own trade and development programmes for the third world, without the involvement of Brussels. The Swiss do contribute to the EU budget to the tune of about SFr550m a year for the period 2007-13. But this is far short of the estimated cost of EU membership. If Switzerland joined the EU, the annual net contributions could increase to SFr3.4bn annually, with gross contributions of SFr4.9bn. Switzerland can, under these circumstances, afford to be generous to the "new" EU countries and the Government has agreed to contribute SF1bn, disbursed on specific bilateral projects. This robustly answers those critics that assert Britain would be unable to help the poorer EU countries if it opted out of political union. Of course it could. *Clive Church (ed), Switzerland the European Union, Routledge, 2007. ........................................ Sir Rocco Forte is Chairman & Chief Executive of The Rocco Forte Collection TELEGRAPH 19.10.07 4.How Britain can negotiate a new relationship with the EU By Martin Howe, QC As mentioned in previous articles in this series, polling undertaken by Global Vision shows that there is strong public support for a new looser relationship with the EU based on trade and cooperation whilst opting out of political and economic union. The critical questions are not, therefore, about the popularity of this desired outcome. They are about its legal and negotiating feasibility. Britain's current membership of the European Union is defined by a series of international treaties between the member states, agreed by unanimity. The main treaties are The Treaty of Rome, The Single European Act, and the Treaties of Maastricht, Amsterdam and Nice. Each of the treaties has been given effect under UK law through an accompanying Act of Parliament. The unique nature of these Treaties is that they penetrate directly into the legal systems of the member states and provide mechanisms for laws to made - in most cases by QMV procedures - which then operate as part of our law. The new relationship would require the UK's adherence to those Treaties to be replaced by a new agreement between the UK and the other member states. A key feature of this new relationship would be that the UK would retain the basic freedom to trade with the existing EU member states (and vice versa) but would no longer be subject to the EU's law-making apparatus or Court system. Of course it would still be necessary for businesses which sell goods or services into the EU internal market to comply with EU rules and standards, in the same way as businesses have to comply with US standards if they want to export there. But it would no longer be necessary for us to comply with EU requirements when goods or services are supplied within the UK, or on export sales to third countries. This would give us a unique opportunity to go through the existing so-called acquis communautaire (the 100,000 pages of the EU's laws, policies and practices), revising and jettisoning rules and requirements which are unduly burdensome. The current agreement between Switzerland and the EU provides one existing, workable model which demonstrates that the new relationship as advocated by Global Vision is perfectly feasible. Switzerland, as a member of the European Free Trade Area, has had a free trade agreement for industrial goods with the EU since 1972, and has an extensive list of bilateral agreements with the EU which give it effective access to the EU internal market, and yet is not a member of the EU. While it would be open to the UK to declare that it wished to renegotiate a new relationship with the EU at any time, the current negotiations over the so-called Reform Treaty provide an ideal opportunity for Britain to instigate the proceedings. No EU Treaty can proceed without unanimous agreement by all member states. The price of Britain's agreement to the Reform Treaty would be a new treaty defining a new, looser, relationship between the EU and Britain. It is clear that there are no legal barriers to Britain's changing the terms of the relationship with the EU at all. It is perfectly feasible legally speaking. But what of its negotiating feasibility? Would our EU partners allow us the "benefit" of free trade with the EU without paying the "price" of full involvement in the political union? Looking at the issue in these terms is a mistake. A free trade relationship is of mutual benefit to both parties. It is not a gift by one party to the other. Since Britain has consistently run a large balance of payments deficit in its trade with other EU states, the benefit of a free trade relationship is actually greater to them than it is to us. And what of political union? The EU's recent history has been bedevilled by persistent conflict between the majority view of Continental politicians in favour of further integration, fulfilling the dream of the Rome Treaty's "ever closer union among the peoples of Europe", and the "awkward squad" who have no desire for political union. Chief of the awkward squad is, of course, Britain. Removing us from our entrapment in the process of ever closer union is of course of huge benefit to us as a nation. But it is also of great benefit to those who aspire to build a federal Europe. By removing our awkward squaddishness from their processes, we would allow them to proceed at their own speed towards that goal. We should wish them luck, if that is their chosen destiny as nations. Valery Giscard d'Estaing, the Chairman of the Convention on the Future of Europe which drafted the Constitution, inserted a withdrawal clause into the Constitution (which is also in the Reform Treaty) with the UK specifically in mind. He and many other top EU politicians would not be outraged if Britain declared its wish for a looser relationship. On the contrary they would be relieved. The friction between Britain and the rest of the EU, that has bedevilled relationships since the UK joined, would be solved. In addition, there is the matter of the Eurozone. Historically, currencies have only survived and thrived when they are backed by political and economic union. It may be that the euro will prove to be an exception, but a euro backed by political union surely has a better prognosis than one that is not. But a euro-based political union which includes the UK as a non-euro economy will be increasingly awkward for both sides. Hopefully the UK's new, looser, relationship with the EU would set a precedent for other existing or potential future EU members. For example, it now seems highly unlikely that Turkey will be permitted to be a full member of the EU yet there are many reasons for wishing to anchor Turkey within a wider "European family". The concept of "privileged partnership" has been suggested to, but rejected by, Turkey. If the UK had a similar "privileged partnership" then surely the whole tone of the debate would change. And we should not be surprised if some other new members also choose the same route. In that way the UK's move to negotiate a new relationship could be the catalyst to a much wider reform of the whole EU. After all what is required is political will to negotiate by both the British Government and our EU partners. Any British politician should feel emboldened by consistent polling which shows that the British people want a new relationship. The people are there already. The politicians should follow. And if Britain were to pursue a new relationship with the EU, I believe that European politicians would welcome the opportunity for positive and fruitful discussions.