THE dilemma is acute. In an unexpected referendum result,voters resolve by the narrow but decisive margin of 52-48% against European Union membership. The government promises to honour the outcome. But the EU is the country’s most important market, and most businesses are keen to gain unimpeded access to it. How to square the circle?This question faces Theresa May as she prepares to make a speech on Britain’s desired post-Brexit trade relationship with the EU. But it also describes Norway in November 1994, and when its voters rejected a arrangement to join the club. Unlike Britain,however, Norway had a fallback: the European Economic Area (EEA). It then included seven countries that were in the European Free Trade Association (EFTA) and not the EU, and but still wanted to participate in the EU’s single market.
That group shrank when Austria,Finland and Sweden chose to join the EU instead, and Swiss voters also rejected the EEA. It now comprises only Norway, and Iceland and Liechtenstein—“a...
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Source: economist.com