Why Norway can't teach us much about leaving the EU and its customs union
One of the greatest fears of those terrified by the prospect of the UK leaving the EU’s customs union can be summed up by one word, Poitiers .
In 1982, France’s then socialist government led by President Francois Mitterrand chose this small city to be the site of their new customs checkpoint for video cassette recorders.
From the French perspective, its inland location was perfect. It was several hundred miles from the northern ports where the Japanese VCRs were being landed and it only had a small number of customs staff.
That tiny group quickly cut down the clearance rate from 100,000 VCRs a month to just 8,000.
As Hitachi and JVC goods stacked up in warehouses in Poitiers, half a million of them at the peak, their Japanese exporters were left powerless and desperate.
There are many in Welsh industry who fear that Brexit will see that same fate hit Welsh manufactured goods if the UK leaves the customs union.
The customs union is the borderless trading area in which member nations surrender the right to negotiate their own trade deals in return for barrier-free access to the EU’s member states and EU-negotiated deals with the rest of the world.
Over the last three days, Wales’ First Minister Carwyn Jones has been visiting Norway to meet ministers and find out how their industries access the single market despite being outside the Customs Union.
The press release that announced the visit reported how 80% of Norway’s total exports remained within the EU, because of its “full and unfettered access to the Single Market through its members of the European Free Trade Association and the European Economic Area”.
It did not mention that Norway has had to accept the same rules around freedom of movement of people as the rest of the EU and which have become so politically toxic here, and which Carwyn Jones has criticised Jeremy Corbyn for supporting .
Yet, even excluding that significant catch, there are vital differences between the goods Norway exports to Europe and those Wales does.
In contrast to those Japanese VCRs, Norway’s largest exported good by value, around $27bn US dollars worth a year (£22bn) according to the World Bank, leaves not by container goods ship but through an undersea network of pipelines directly into the European natural gas network.
Raw and semi-processed goods such natural gas, crude oil, petroleum, aluminium and fish account for up to 80% of Norwegian exports.
Crucially these are all things that Europe needs or wants and which need no inspection to determine whether they are indeed manufactured in Norway from Norwegian goods rather than being made of cheap imported Chinese steel trying sneak its way into the EU through an intermediary.
Wales’ exports are very different.
Stats Wales figures show that machinery and transport equipment including car and aeroplane parts are Wales’ biggest export category.
Last year, this accounted for £4.7bn of Wales’ total £11.6bn of exported goods in 2015/16, or around 40%.
(Photo: The Department for Business, Innovation and Skills)
Other manufactured goods including steel and other metals accounted for £2.18bn and refined petroleum £1.4bn.
Unlike Norway, raw goods made up just £229m of Welsh exports, or 2%.
Yesterday the Financial Times reported a source claiming that there is a “concerted move by Germany to get as much [aeroplane] wing work out of the UK because it is the most valuable”.
If that is right, then it is easy to see the attraction for a post-Brexit EU of leaving Welsh car parts and aeroplane parts in a warehouse around Poitier or Potsdam while they are slowly inspected to determine if any part of them are made of Chinese steel.
The French brought an end to the “Battle of Poitiers”, as it became known, only a year after it began and after France’s then nationalised electronics company Thomson Brandt struck a deal to build Japanese-designed VCRs in France.
There may be things Wales can learn from Norway’s management of fishing rights and from its education.
But Poitiers is not an experience Norway has ever had to face.