Scotland wants EU market access, more powers as UK goes for Brexit

By Elisabeth O'Leary EDINBURGH (Reuters) - Scotland wants to stay in the European Union's single market after the United Kingdom leaves the bloc and will push for more powers to protect its interests, the head of its pro-independence government said on Tuesday. Nicola Sturgeon said Scotland wants a deal that allows it access to the single market and free movement of the EU migrants that underpin its economy, its ageing population and its outlying rural communities. The Scottish devolved government set out three options in a paper entitled "Scotland's Place in Europe". Despite being a supporter of secession, Sturgeon said her preference in the Brexit aftermath was for the whole of the UK to stay in the single market, which trades goods and services tariff-free across 28 countries. A second option proposes a single market membership carve-out for Scotland from a UK outside the EU. The third option is independence from the rest of the UK. Britons voted to leave the EU by 52 to 48 percent but Scotland, one of the UK's four nations, voted by a large margin to stay. "There has to be a way to effectively square the circle," Sturgeon told a news conference, referring to the difficulty of matching Scotland's vote with that of the UK as a whole amid the complexity of Britain's Brexit negotiations. The wish list seems likely to be received as an impossibly tall order in London, which has set control of EU migration as one of its priorities. Sturgeon's opponents accuse her of setting up an impossible task so as to have a ruse to retry her luck with independence after losing a referendum in 2014. FUNDAMENTAL REVIEW Senior EU officials also voiced serious doubts about the feasibility of having different EU trade arrangements with the northern and southern halves of the island of Great Britain. "How would you treat some product that is made in Glasgow, but uses parts made in Manchester? Is it made inside the single market or not? Are you going to have customs posts between Scotland and England? I don't see it," one EU official said. Sturgeon said the option of independence, which Scots rejected by a 10-point margin, had to be kept available and was still "the best long-term future for Scotland". "Brexit is a problem not of Scotland's making," she said. Scotland needed a fundamental review of its devolution settlement, she argued, and powers over immigration were vital to protect Scotland's interests. The paper cited examples of immigration policy in Canada and Australia which had differentiated immigration systems for regions and states within the same land territory, addressing concerns on the prospect of a land border between England with Scotland to its north. Critics of Scottish nationalism point out that the rest of the UK is much more important to Scotland than the EU is because two-thirds of Scottish "exports" are to the rest of the UK, worth around 48 billion pounds ($60 billion). By contrast, Scotland exports just 12 billion pounds worth of goods and services to the EU. In London, May's spokesman said the prime minister would consider the Scottish proposals carefully. (Additional reporting by Sarah Young in London and Alastair Macdonald in Brussels; Editing by Alison Williams)