GIBBERISH
Britain will simply join the European Free Trade Association, or EFTA.
You do not have to be in the EU to trade with the EU!
EFTA members are either members of the EEA (which requires submission to EU regulations) or, in Switzerland’s case, have “bilateral agreements” with the EU that also stipulate compliance with EU regulations.
Note that the UK is singled out here.
And the threat was basically that the UK couldn’t obtain the “single market” benefit that Norway and Switzerland do - both countries being EFTA countries, not part of the EU. IOW, that the EU would reject UK “entry into EFTA,” and would treat the UK as totally “outside the Community.”