Britain could in effect remain part of the single market by becoming a member of the European Economic Area. Norway, Iceland and Liechtenstein are outside the European Union, but in the European Economic Area. Meanwhile the Swiss, who are members of the European Free Trade Association but not the European Economic Area, have established free trading relations with the European Union and access to the single market through a series of bilateral agreements. Although their trade with the bloc is subject to Brussels’ ‘rules of origins’ regulations, both Norway and Switzerland have the freedom to determine their own trade policy and arrangements with third party countries. (See Figure 6 and Figure 7.)
The option of remaining in the European Economic Area (like Norway) seems an undesirable one in the event of Brexit. The whole point of leaving the European Union would be to gain substantial extra freedoms – which in that case would not be possible. At the same time, some of the United Kingdom’s influence over the European Union would be lost. The Swiss option is more plausible but would be subject to tough negotiations.