Made From Norwegian Wood

As Richard North notes, you can tell that the 'Norway' proposal has put the wind up the Europhiles made evident by the amount of attention that they're paying to it, imbue naturally with BBC bias by omission. By eliminating the apocalyptic economic warnings of leaving the single market that will inevitably be rolled out en masse, Norway leaves only the (untrue) 'fax democracy' argument against leaving the EU. Negate that and they are left with nothing.

Norway, like Lichtenstein and Iceland are members of the EEA and EFTA (with Switzerland being a member of EFTA only). They participate fully in the committees that assist the EU Commission in administering or developing framework programmes and specific programmes:

All in all, Norwegian officials take part in just over 200 committees under the European Commission. The presence of Norwegian experts provides an opportunity to exert influence through direct participation at a time when national points of view are usually still flexible and before positions have become firmly established.

This comes under Articles 99 and 100 of the 1994 Agreement of European Economic Area. Artcle 99 (page 32) states (my emphasis):

1. As soon as new legislation is being drawn up by the EC Commission in a field which is governed by this Agreement, the EC Commission shall informally seek advice from experts of the EFTA States in the same way as it seeks advice from experts of the EC Member States for the elaboration of its proposals.

2. When transmitting its proposal to the Council of the European Communities, the EC Commission shall transmit copies thereof to the EFTA States.
At the request of one of the Contracting Parties, a preliminary exchange of views takes place in the EEA Joint Committee.

3. During the phase preceding the decision of the Council of the European Communities, in a continuous information and consultation process, the Contracting Parties consult each other again in the EEA Joint Committee at the significant moments at the request of one of them.

4. The Contracting Parties shall cooperate in good faith during the information and consultation phase with a view to facilitating, at the end of the process, the decision-taking in the EEA Joint Committee.

And Article 100 says:

...when drawing up draft measures the EC Commission shall refer to experts of the EFTA States on the same basis as it refers to experts of the EC Member States.

Clearly then Norway has the opportunity to have input into the formation of single market rules via the EEA Joint Committee and the EEA Council. Then ultimately Norway, and other members of EEA, has the insurance of a veto as a longstop. It is a right that Norway has already deployed when, in 2011, it vetoed the EU's 3rd Postal Directive (2008/6/EC), as this quarterly report from Posten Norge (Norway's Postal Service) writes:

The postal market in Europe was liberalised with effect from 01.01.2011 in accordance with the EUs third Postal Directive. However, a decision made at the Labour Party National Conference makes it clear that the Norwegian government does not wish to implement the EU's Third Postal Directive. The consequences of a possible veto are uncertain, but the Board of Directors considers the risk of the EU imposing sanctions on Norway Post's activities outside Norway as low.

Contrast this with the UK, who eagerly implemented the relevant EU Directive into the Postal Services Act 2011:

The Bill implements provisions of Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services.

This Directive amends Directive 97/67/EC which was previously amended by
Directive 2002/39/EC. References are to the consolidated version of the Directive.

The same EU Postal Directives that have done enormous damage to our Royal Mail service.

And not only has Norway used the veto but it also uses the right as a threat to enhance its negotiating position on a number of occasions. For example in 2011 the Norwegian government considered using its veto against a new EU Directive, then being discussed by the EU Parliament attempting to set a limit to the European banks deposit insurance guarantee. In an interview with the Norwegian newspaper “Nationen,” Norwegian minister of finance, Sigbjørn Johnsen, refuse to accept the upcoming regulations from Brussels (via Google translate):

"[The EU] understand well the arguments we make, and I feel that the arguments go in, but time will tell if we get through", says Johnsen "But yes, the veto is even considered. But our main line is getting through."

However one shouldn't get carried away. The Norway solution is anything but a permanent solution for us - and most certainly it is not perfect. In many ways Norwegians suffer from the same problems as us, ruled by homegrown Europhile politicians, stitch-ups in their Parliament as a result - which make, despite the power of the veto - Norway one of the most obedient countries towards the EU and the EEA:

Norwegian lawmakers and bureaucrats obediently follow directives issued by the European Union (EU), now probably on controversial data storage rules as well, even though Norway isn’t an EU member. The latest example of obedience brought together arch-rivals Labour and the Conservatives, because of their leaders’ desires to avoid an EU veto.

Despite Norwegian public's scepticism about the EU, made clear in two referendum rejections of membership, Norway has incorporated approximately three-quarters of all EU legislative acts into Norwegian legislation as part of the EEA - according to this massive 900 page report commissioned in 2010 by the Norwegian Government as a comprehensive review of Norway’s agreements with the EU. 

Thus the willingness of Norway's parliament to bend to the will of the EU is not because of a 'democratic deficit' as a consequence of Norway being a member of the EEA, as the introductory text claims (page 7):

The most problematic aspect of Norway’s form of association with the EU is the fact that Norway is in practice bound to adopt EU policies and rules on a broad range of issues without being a member and without voting rights. This raises democratic problems.

...instead the deficit lies between Norway's parliament and its own people. Norway has more power over EU regulations in relation to the single market than ourselves, but it chooses by and large not to utilise it. Now doesn't that sound familiar? So ultimately exiting the EU in whatever format we choose still requires a massive overhaul of democracy at home in relation to how we're governed.