14 June 1996
POLICY REVIEW BODY: REVIEW OF NORWAY
TPRB'S EVALUATION Back to top
The Trade Policy Review Body of the
World Trade Organization (WTO) conducted its second review of Norway's trade policies on
11 and 12 June 1996. The text of the Chairman's concluding remarks is attached as a
summary of the salient points which emerged during the two-day discussion.
The review enables the TPRB to conduct a collective
examination of the full range of trade policies and practices of each WTO member country
at regular periodic intervals to monitor significant trends and developments which may
have an impact on the global trading system.
The review is based on two reports which are
prepared respectively by the WTO Secretariat and the government under review and which
cover all aspects of the country's trade policies, including: its domestic laws and
regulations; the institutional framework; bilateral, regional and other preferential
agreements; the wider economic needs and the external environment.
A record of the discussions and the Chairman's
summing-up, together with these two reports, will be published in due course as the
complete trade policy review of Norway and will be available from the WTO Secretariat,
Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been
completed: Argentina (1992), Australia (1989
& 1994), Austria (1992), Bangladesh (1992), Bolivia (1993), Brazil (1992), Cameroon
(1995), Canada (1990, 1992 & 1994), the Czech Republic (1996), Chile (1991), Colombia
(1990), Costa Rica (1995), Côte d'Ivoire (1995), the Dominican Republic (1996), Egypt
(1992), the European Communities (1991, 1993 & 1995), Finland (1992), Ghana (1992),
Hong Kong (1990 & 1994), Hungary (1991), Iceland (1994), India (1993), Indonesia (1991
and 1994), Israel (1994), Japan (1990, 1992 & 1995), Kenya (1993), Korea, Rep. of
(1992), Macau (1994), Malaysia (1993), Mauritius (1995), Mexico (1993), Morocco (1989
& 1996), New Zealand (1990), Nigeria (1991), Norway (1991 & 1996), Pakistan
(1995), Peru (1994), the Philippines (1993), Poland (1993), Romania (1992), Senegal
(1994), Singapore (1992 & 1996), Slovac Republic (1995), South Africa (1993), Sri
Lanka (1995), Sweden (1990 & 1994), Switzerland (1991 & 1996), Thailand (1991
& 1995), Tunisia (1994), Turkey (1994), the United States (1989, 1992 & 1994),
Uganda (1995), Uruguay (1992), Venezuela (1996) and Zimbabwe (1994).
TRADE POLICY REVIEW BODY: REVIEW OF
CONCLUDING REMARKS BY THE CHAIRPERSON Back
The Trade Policy Review Body has now
completed the second review of Norway's trade policies and practices. These remarks, made
on my own responsibility, summarize the main points of the discussion. They are not
intended to substitute for the collective evaluation and appreciation of Norway's trade
policies and practices. Details of the discussion will be reflected in the minutes of the
The discussion developed under four main themes: (i)
Norway's economic structure and its multilateral and regional relations; (ii) trade
practices by measure; (iii) agriculture and fisheries; and (iv) other sectoral issues.
Norway's economic structure and its multilateral
and regional relations
Members noted the improved performance of the
Norwegian economy since the previous Trade Policy Review in 1991, with strong economic
growth and low inflation. Unemployment was falling, although not to the level of the early
1980s. Oil was a key feature of the Norwegian economy and a question was raised about
progress in implementing the Petroleum Fund. In commenting on the generally open nature of
the Norwegian economy, members also asked about the process of domestic adjustment in
response to liberalization.
Members welcomed Norway's active participation in
the Uruguay Round and in the WTO, and the level of its commitments. They also noted the
high and increasing level of trade with regional preferential trading partners in Europe
under the EEA, EFTA and agreements with Central and Eastern Europe. Questions were asked
about the consistency of such arrangements with the GATT and the GATS, and differing views
were expressed on possible trade diversion effects. Appreciation was expressed by many
developing country members for the favourable access afforded by Norway's GSP scheme,
although some further improvements were urged in extending the scope of the scheme, in
particular to textiles and clothing.
While terms of access for foreign direct investment
in Norway had become even more open than at the previous TPR, partly as a result of
application of EEA rules on an erga omnes basis, questions were asked about further
opening, including whether this would also be on a non-discriminatory basis. Norway's
views were sought on the possible inclusion of rules on foreign investment within a
In response, the representative of Norway explained
that, while the oil sector contributed positively to the overall economic performance,
economic policies had also been geared actively to achieving increased employment, reduced
inflation and competitiveness. Unemployment had not fallen as rapidly as hoped, inter
alia, because of a rapid growth of the labour force. Details were provided on the
Petroleum Fund as a budgetary measure with a view to the future; allocation for the
current year was estimated at 2.5 per cent of GDP.
The representative of Norway explained that
liberalization of capital movements under the EEA was made on an erga omnes basis
and that investment screening was non-discriminatory. OECD rules on export credits and
guarantees were followed; assistance was provided for Norwegian investment in developing
countries through a special credit arrangement.
The representative said that Norway saw no
contradiction between further regional integration and efforts to liberalize at the global
level. Norway hoped to contribute to the debate on regionalism in the new Committee on
Regional Integration. The progressive inclusion of agriculture in the EEA was to be
reviewed every two years. The provisions under which the EEA Agreement had been notified
did not, in the Norwegian view, require review in a working party.
Norway appreciated the comments on its GSP scheme
and took note of the suggestions made on how this might be improved, particularly in the
areas of textiles and agriculture and by the possible inclusion of footwear. He mentioned
the fund that Norway had established in the WTO to help provide technical assistance to
developing countries. Appreciation of this fund was expressed by a number of developing
Trade practices by measure
Members commented on the generally low level of
Norwegian industrial tariffs, which had been further reduced as a result of the Uruguay
Round, autonomous tariff cuts of low, "nuisance" tariffs and more substantive
reductions. Nevertheless, there were some areas of tariff escalation. In the areas of
forestry, pulp and paper, which were major export items, members wondered whether such
tariff escalation was necessary.
It was noted that quotas for textiles and clothing
continue to be applied by import licensing, which also affected some products from non-WTO
members. A question was raised about the need for high VAT levels, given the fiscal
A number of members commented on the various subsidy
schemes used by Norway, including for regional development, R&D, environmental
improvement, export promotion and in support of agriculture and shipbuilding; it was felt
that these could have disruptive trade effects. Members asked about future plans in this
area. A number of questions were asked about state trading operations, including for
alcohol, grains and animal feedstuffs, as well as, more generally, on plans for
privatization of State enterprises. There were several questions about government
procurement policies, in particular whether these favoured firms with local presence and
which used a higher degree of local content.
Members expressed considerable interest in Norway's
environmental policies, including the White Swan labelling programme and the electric
vehicle programme. There were also specific questions on the application of technical
standards and SPS regulations.
In response, the representative of Norway said that
Government support for strong environmental policies could be positive, provided there
were no trade distorting or discriminatory effects. Norway was aware of the need to strike
the right balance in this area. Further details were provided on the voluntary
eco-labelling scheme, which had been discussed informally in the WTO; the authorities, he
said, were considering a notification under the TBT Code of Good Practice. He emphasized
that support measures for the forestry sector were designed to prevent deforestation and
ensure regeneration. Details were provided on the electric vehicles project.
The representative noted that, in the Uruguay Round,
higher tariffs had been cut to a greater extent; full implementation of the results would
further reduce tariff escalation. Agricultural tariffication had increased Government
revenues, although he emphasized that the contribution of tariffs to the budget was
minimal. The elimination of further "nuisance tariffs" was being considered in
relation to the 1997 budget.
The representative confirmed that Norway had not
used anti-dumping, countervailing or safeguard actions for ten years, nor had the EEA
during its existence. The new Trade Act was designed to bring legislation into line with
present practice. Current VAT rates would help maintain budget surpluses against the
future run-down in oil revenues that was anticipated.
The delegate provided details on the Norwegian
Government holdings in industry, and stressed that the authorities were not involved in
day-to-day management. In banking, State participation, which had increased during the
banking crisis, would be further reduced. The alcohol monopoly for imports, exports and
wholesale trade had been abolished on 1 January 1996, but there were no plans to eliminate
the retail monopoly.
The representative said that technical regulations
and SPS measures were consistent with WTO obligations. He provided further details on
assistance to developing countries and the labelling of genetically-modified foods or
ingredients. EEA rules would generally prevail over non-binding international standards.
The representative provided specific responses to a
series of questions on Norway's competition legislation and experience with its
application. He noted that the EEA Agreement on competition rules had made anti-dumping
measures redundant within the EEA. He provided a list of the notifications still to be
made to the WTO in the areas of TBT, import licensing and agriculture.
The representative informed members that amendments
to the regulation on Government procurement were expected to be adopted within one month,
for immediate entry into force. However, he noted that current practice was not
discriminatory. Environmental aspects could be one criterion in determining the
"economically most advantageous tender". Further details were provided in
response to specific questions.
Agriculture and fisheries
While welcoming the opening of the agricultural
sector as a result of the Uruguay Round and the intention to bring prices closer into line
with those in neighbouring countries, some members noted that these were still high and
asked what further action the Norwegian Government intended to reduce the high levels of
protection and assistance. There was additional unpredictability stemming from the use of
seasonal tariffs which could be varied at short notice. Questions were also asked about
the auctioning system being considered for the allocation of tariff quotas, some members
expressing the preference that quotas be allocated on the basis of historical market
share. It was noted that the EEA and EFTA agreements effectively excluded agriculture, and
Norway was asked how this sat with the requirement of Article XXIV of the GATT that
substantially all trade be covered under such arrangements.
In response, the representative of Norway said that
administrative adjustments to tariffs were within international obligations, and carried
out under guidelines to ensure transparency. The Import Council advised the Government on
the import régime. There was no intention of increase applied rates. In Norway's view
auctioning of quotas was compatible with the WTO Agreement on Agriculture, allowing new
entrants and increasing quota utilization. Auctions had been introduced for minimum access
quotas and for some items under the GSP.
Details on the operation of the Norwegian Grain
Corporation had been notified to the WTO Committee on State Trading Enterprises.
Information was provided on the import quota for deer meat.
The delegate concluded by giving an overview of the
conditions affecting Norwegian agriculture and the rationale of its agricultural policy,
including geographic, climatic and food security reasons.
A number of questions were asked about fisheries,
including several questions about access to the Norwegian market for fish and to Norway's
fishing grounds. A question was asked about the consistency of minimum prices for
determining dutiable value for imported fish with the WTO Agreement on Customs Valuation.
In response, the representative of Norway said that the Royal Decree providing for the
possibility of minimum prices for fish and fish products was a safeguard measure against
market disruption from import surges, not for customs valuation purposes. Minimum prices
were determined in negotiation between fishermen and sales organizations.
Other sectoral issues
Members welcomed Norway's liberal offer in the
maritime services negotiations, its commitments in financial services and the opening of
its telecommunications market. A number of specific questions were asked about conditions
of access to the Norwegian financial services market. While the State was divesting itself
of its acquisitions during the 1992 banking crisis, it was noted that two trading banks
would remain under state control. Some questions were asked about the Norwegian fleet and
explanations were sought on the shipping registers. A question was also asked about the
proposed revision of the mining law, in particular whether access afforded to EEA
countries would be extended to other WTO members.
In response, the representative of Norway said that
Norwegian mining law did not restrict exploration rights to EEA nationals; however,
non-EEA nationals required a specific concession. Revision of the law would be proposed in
The representative said that there was no intention
to replace the current restrictions on the cross-border supply of banking services, which
had been duly tabled under the GATS. EEA conditions were different because of the
"single licence" and other provisions in the agreement. The requirement that
insurance broker activity be organized as a joint stock company would be abolished.
The representative indicated that he could make
available a summary of the White Paper on maritime services to interested delegates. He
gave details on the two Norwegian shipping registers, noting that the Norwegian
International Shipping Register (NIS) was a national quality register, not a
Tendering procedures for the supply of
telecommunications equipment were open; type approval was no longer a time-consuming
exercise and foreigners should have equal opportunities to compete with nationals.
Overall, Members were favourably impressed by the
strength and openness of the Norwegian economy. Such qualifications as were expressed
related largely to Norway's agricultural régime, as well as to the heavy concentration of
trade in countries with which Norway has preferential trading arrangements. There was
encouragement for further opening up of the agricultural sector and for increased
geographical diversification of trade; the commitment of the Norwegian Government to
further liberalization was noted and the hope was expressed that there would be a
continuation of current positive trends. Back to top