11 December 2019

Financial Times: The EU needs new relationship models for non-members to prosper

In a world newly hostile to multilateralism, these are challenges but also opportunities. As a pole of attraction for more countries to orient their economic models to, the EU could can project its values, spread its standards, and protect multilateralism far beyond its own borders. Fall short of that, and do not be surprised if neighbours deem their interests better served by aligning with China or Russia instead.

What the bloc lacks is a settled, publicly understood and strategically intelligent answer to a central question: what is the desired long-term relationship between this or that country and the EU? A joined-up approach is essential — that is what the EU is up against in Beijing’s Belt and Road Initiative. But also, it can achieve more under a single framework than by treating every relationship separately.

Three basic principles matter. The EU must define what is on offer. It must reconcile what it wants with what can attract others. And it must create a wide enough range of possible relationships to accommodate as many countries as possible in its wider neighbourhood, including throughout Africa.

There has been much talk of allowing “concentric circles” of varying degrees of integration inside the EU, but it is more urgent to design such circles of non-membership. France, stung by criticism of its veto on Albania and North Macedonia’s accession talks, has tentatively proposed a ladder of stages on the way to membership. European leaders should engage with these ideas — not just as temporary way stations for prospective members, but as a permanent menu of formal, graduated association models for non-members.

Two standardised models currently exist: full membership and membership of the European Economic Area. Both are legally well-defined and, in principle, open to all eligible countries. But these models are unrealistic for many countries. The task is to define “outer circles” of association, beyond full and EEA membership, so that more distant countries can comfortably plug into to the EU’s markets, its regulatory zone and its system of governance.

These outer circles should grant an extensive set of rights and access to EU markets in return for adopting the relevant parts of the EU rule book and for remaining aligned as it evolves. But the amount of sovereignty given up to the centre would be less the further out a country chose to be.

It is for the EU to define discrete packages of rights and obligations it could live with, but subsets of the EEA agreement, with the possible addition of a customs union, would be a good place to start. The Brexit talks have shown us that once the EU defines trade-offs, smaller countries must pick between the options on offer. The EU’s governance model would have to be respected, in particular automatic adjustment to rule changes and the ultimate authority of the European Court of Justice.

An obvious package would centre on frictionless trade in goods, without free movement of services and people. That would mean sacrificing the dogma that the single market’s four freedoms are inseparable. In return it would require interested countries to accept a customs union and EU rules on goods. There are dozens of countries for which this could be a realistic target — and more attractive than being a Belt and Road satellite.

The prize for the EU would be the formal acceptance of its rulemaking authority, more weight in trade talks, and an expansion of its own single market in goods. Above all, it would bring many more countries closer to the European core and give them a reason to choose Europe over China as the centre of gravity for their economic links. As Beijing understands very well, political alignment would not be far behind.

Concentric circles would make a high degree of European alignment rewarding, even for countries no one imagines as potential members. Those determined to join could proceed with the difficult work of adapting to EU rules, with a genuinely attractive antechamber in which to wait for however long it takes for the stars to align. [...]

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