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The United Kingdom's post-Brexit relationship with the remaining European Union members could take several forms. A research paper presented to the UK Parliament in July 2013 proposed a number of alternatives to membership which would continue to allow access to the EU internal market. These include remaining in the European Economic Area (EEA) as a European Free Trade Association (EFTA) member (alongside Iceland, Liechtenstein, and Norway), or seeking to negotiate bilateral terms more akin to the Swiss model with a series of interdependent sectoral agreements. The exit from the EU without EEA membership or a trade agreement is known as the WTO option.
A transitional arrangement may apply between the time the UK leaves the EU and the coming into force of the final relationship. The report from the first phase of Brexit negotiations (June to December 2017) mentioned the possibility of agreeing a transitional arrangement during the second phase.
The UK could seek to continue to be a member of the European Economic Area as a member of EFTA. In January 2017, Theresa May, the British Prime Minister, announced a 12-point plan of negotiating objectives and said that the UK government would not seek continued membership in the single market. EEA membership would mean being under existing EU internal market legislation that is part of the EEA Agreement. Some EU law originates from various international bodies on which non-EU EEA countries have a seat. EFTA members free to set their own policies in areas such as agriculture, fisheries, Customs Union, trade, the Common Foreign and Security Policy, direct and indirect taxation and criminal matters. EEA countries are required to contribute to the EU Budget in exchange for access to the internal market. The UK would be subject to the EFTA Court rather than the European Court of Justice.
Seeking to negotiate bilateral terms more along the Swiss model with a series of interdependent sectoral agreements. Britain has not negotiated a trade agreement since before 1973, and the government is looking to the private sector for assistance.
The EEA Agreement and the agreement with Switzerland cover free movement of goods, and free movement of people. Many supporters of Brexit want to restrict freedom of movement; Liechtenstein has a de facto permanent limit on the free movement of persons, though the EEA Joint Committee said this was because of Liechtenstein's specific geographical situation. Also, an EEA Agreement would include free movement for EU and EEA citizens, although the EEA Agreement allows EEA EFTA states to suspend it temporarily due to serious economic, societal or environmental difficulties. Passport systems allow EEA institutions to access markets in EU Member States, for the most part, without having to establish subsidiaries in each EU Member State and incur the costs of full authorisation in those jurisdiction. Others[who?] present ideas of a Swiss solution, that is tailor-made agreements between the UK and the EU, but EU representatives have claimed they would not support such a solution. The Swiss agreements contain free movement for EU citizens. (The Swiss immigration referendum, February 2014 voted narrowly in favour of an end to the 'free movement' agreement, by February 2017. However, the bilateral treaties between Switzerland and the European Union are all co-dependent: if one is terminated then all are terminated. Consequently, should Switzerland choose unilaterally to cancel the 'free movement' agreement then all its agreements with the EU will lapse unless a compromise is found. A compromise was reached in December 2016, effectively canceling quotas on EU citizens but still allowing for favorable treatment of Swiss-based job applicants c).
Several thousand British citizens resident in other EU countries have after the referendum applied for citizenship where they live, since they fear losing the right to work there.
An EU position paper stated: “The Withdrawal Agreement should establish institutional arrangements to ensure the effective management, implementation and enforcement of the Agreement. It should include appropriate dispute settlement mechanisms regarding the application and interpretation of the Withdrawal Agreement. The Withdrawal Agreement should respect the Union's autonomy. The Withdrawal Agreement should provide that both The Union and the United Kingdom supervise the implementation of the Withdrawal Agreement.”
The EEA Council recognises that Liechtenstein has a very small inhabitable area of rural character with an unusually high percentage of non-national residents and employees. Moreover, it acknowledges the vital interest of Liechtenstein to maintain its own national identity.
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