Norway: June 2000
Norway has continued to remove barriers to trade and investment through its participation in the wto and the european economic area (eea), says a new wto report on the trade policies of norway. This, and a skilful exploitation of natural resources, has helped norway attain high living standards and full employment. The report adds, however, that norway's liberal regime is marred by inordinate protection to agriculture and that a few remaining trade and investment distortions, including those that may arise from subsidies for regional and industrial policy reasons and from certain investment barriers to non-eea investors, need to be addressed to help assure the sustainability of living standards.
Norway's liberal trade regime is marred by a few but significant trade distortions - particularly in agriculture
wto secretariat report, along with a statement by the
norwegian government, will serve as a basis for the trade
policy review of norway which will take place in the wto
trade policy review body on 21 and 23 june 2000.
The report notes that most of norway's trade is conducted duty free under the eea and other preferential arrangements, with some 73% of industrial tariff lines also subject to zero mfn rates. In general, tariffs on industrial goods are low: the average mfn tariff on industrial products declined from 5.6% in 1995 to 2.3% in 2000. In contrast, the average mfn tariff on agricultural products is 38.7%. Various agricultural products are subject to tariff quotas. Overall, norway's average mfn tariff in 2000 is 8.1%, less than half the applied rate in 1995.
The report says that norway runs a wide-ranging generalized system of preferences (gsp); it also grants almost all imports from least-developed countries duty free entry. Under norway's gsp, imports of manufactures from ordinary beneficiary developing countries generally enjoy duty-free access, with textiles, clothing and footwear among the notable exceptions. Preferential treatment is also accorded to selected agricultural products. The average tariff for all imports from gsp ordinary beneficiaries in 2000 is 5.3%.
The report notes that norway pursues regional interests actively, particularly through its participation in the eea and the european free trade association (efta). As an efta member, norway participated in efta's free-trade agreements with central european and mediterranean countries. The report states that although such preferential agreements provide for free trade in goods except for some unprocessed agricultural products, the large and expanding preferential network raises concerns about possible distortions. The report suggests that such concerns would be diffused by extending these preferences on a non-discriminatory basis and securing them multilaterally. This would also prevent over-reliance on the eea market.
The report says that investment in most areas is largely open to foreigners and national treatment is generally granted to foreign investors except in some key sensitive areas such as fisheries and airline operation.
In agriculture, the report says, substantial border protection is combined with price support measures. The latter are being gradually replaced with direct income payments. The report notes that overall assistance to domestic producers remains high, at a level almost equal to the value added generated by the sector. Assistance is largely concentrated in a small number of products, namely dairy products, beef and veal, and pork meat.
Norway is the largest exporter of crude oil outside the organization of the petroleum exporting countries (opec), ranking second in the world after saudi arabia. Petroleum exports contribute some 30% of norway's total export earnings. The report notes that petroleum activities are generally open to foreign companies, although state ownership in the sector remains large.
Norway's wto services commitments grant unlimited market access and national treatment in a large number of services. Services account for some 57% of gdp and provide jobs to almost three quarters of the employed labour force. Shipping is norway's second largest source of export revenue. The report notes that norway has implemented a number of changes in recent years, mainly in the financial services, telecommunications and postal services, and maritime transport. For example, state participation in the banking system, although still significant, has been reduced since 1996. In the telecommunications sector, the market was fully liberalized in 1998 and the monopoly rights of the state-owned company, telenor, abolished.
Notes to editors
trade policy reviews are an exercise, mandated in the wto agreements, in which member countries trade and related policies are examined and evaluated at regular intervals. Significant developments which may have an impact on the global trading system are also monitored. For each review, two documents are prepared: a policy statement by the government of the member under review, and a detailed report written independently by the wto secretariat. These two documents are then discussed by the wtos full membership in the trade policy review body (tprb). These documents and the proceedings of the tprbs meetings are published shortly afterwards. Since 1995, when the wto came into force, services and trade-related aspects of intellectual property rights have also been covered.
for this review, the wtos secretariat report, together with the policy statement prepared by norway, will be discussed by the trade policy review body on 21 and 23 june 2000. The secretariat report covers the development of all aspects of norway's trade policies, including domestic laws and regulations, the institutional framework, trade policies by measure and by sector.
attached to this press release is a summary of the observations in the secretariat report and parts of the government's policy statement. The secretariat report and the governments policy statement are available for the press in the newsroom of the wto internet site (www.wto.org). These two documents and the minutes of the tprbs discussion and the chairmans summing up, will be published in hardback in due course and will be available from the secretariat, centre william rappard, 154 rue de lausanne, 1211 geneva 21.
since december 1989, the following reports have been completed: argentina (1992 and 1999), australia (1989, 1994 and 1998), austria (1992), bangladesh (1992 and 2000), benin (1997), bolivia (1993 and 1999), botswana (1998), brazil (1992 and 1996), burkina faso (1998), cameroon (1995), canada (1990, 1992, 1994, 1996 and 1998), chile (1991 and 1997), colombia (1990 and 1996), costa rica (1995), c˘te divoire (1995), cyprus (1997), the czech republic (1996), the dominican republic (1996), egypt (1992 and 1999), el salvador (1996), the european communities (1991, 1993, 1995 and 1997), fiji (1997), finland (1992), ghana (1992), guinea (1999), hong kong (1990, 1994 and 1998), hungary (1991 and 1998), iceland (1994 and 2000), india (1993 and 1998), indonesia (1991, 1994 and 1998), israel (1994 and 1999), jamaica (1998), japan (1990, 1992, 1995 and 1998), kenya (1993 and 2000), korea, rep. Of (1992 and 1996), lesotho (1998), macau (1994), malaysia (1993 and 1997), mali (1998), mauritius (1995), mexico (1993 and 1997), morocco (1989 and 1996), new zealand (1990 and 1996), namibia (1998), nicaragua (1999), nigeria (1991 and 1998), norway (1991 and 1996), pakistan (1995), papua new guinea (1999), paraguay (1997), peru (1994 and 2000), the philippines (1993), poland (1993), romania (1992 and 1999), senegal (1994), singapore (1992, 1996 and 2000), slovak republic (1995), the solomon islands (1998), south africa (1993 and 1998), sri lanka(1995), swaziland (1998), sweden (1990 and 1994), switzerland (1991 and 1996), tanzania (2000), thailand (1991, 1995 and 1999), togo (1999), trinidad and tobago (1998), tunisia (1994), turkey (1994 and 1998), the united states (1989, 1992, 1994, 1996 and 1999), uganda (1995), uruguay (1992 and 1998), venezuela (1996), zambia (1996) and zimbabwe (1994).
The Secretariat s report:Back to top
POLICY REVIEW BODY: NORWAY
Report by the Secretariat Summary Observations
POLICY REVIEW BODY: NORWAY
Report by the Government - Part III
Trade policy objectives and development
A. The world trade organization
1. The uruguay round of negotiations was of major importance to norway. The stronger, broader and clearer legal framework resulting from the negotiations has laid the foundation for more equal terms of competition between large and small trading nations, thus reducing the risk of unilateral trade measures. The world trade organization is there to ensure that no member country pursues national policies to the detriment of other members' trade interests, and that global trade is conducted according to an open, multilateral trading system based on common rules.
2. Since 1947, norway has played an active role in the development of the gatt and the wto in order to ensure the stability, security, transparency, and predictability necessary to an open, outward-oriented economy such as ours. We see the preservation and development of a strong rules-based system as the best guarantee against unilateralism and protectionism.
3. Norway favours further trade policy negotiations aimed both at strengthening the multilateral trading system and the gradual opening of markets. Norway is therefore a strong advocate for the launch of a broad and comprehensive round of multilateral trade negotiations. Norway participated actively in the preparations for the seattle ministerial conference and tabled proposals for mandates in most areas under consideration for negotiations. Norway sees the unsuccessful talks on a mandate for the negotiations at seattle as a temporary setback.
4. Norway actively participates in the mandated negotiations on the built-in agenda. However, for these negotiations to lead to substantial improvements in the trading environment, they should be seen as contributions to a broader, more comprehensive round of multilateral trade negotiations. It is in norways trade policy, economic and political interest that such a broad round of negotiations includes, in addition to the built-in agenda, inter alia special and differential treatment for developing countries; market access for industrial products including fish and fish products; transparency in government procurement; trade facilitation; trade and investment; trade and competition and trade and environment. The round should also cover issues resulting from a review of the implementation of the uruguay round agreements in such areas as anti-dumping, subsidies and countervailing measures.
5. Norwegian trade policy towards developing countries plays an increasingly important role in the formulation of norwegian foreign and development cooperation policy. Norway will continue to promote improvements to the multilateral trading system and encourage greater integration of the developing countries, especially the least developed countries, by means of improved market access, transitional arrangements, technical and financial support and other measures. To this end, norway has contributed approximately us$3.3 million to the wtos programmes for technical assistance. Furthermore, norway continues to advocate that the wto programmes in this field be financed over the organizations regular budget, rather than mainly by voluntary contributions to a global trust fund. Norway has also signed the agreement to establish an independent legal advisory centre on wto law.
6. Norway continues to target and strengthen its bilateral efforts to promote trade with developing countries, for example by implementing improvements to the generalised system of preferences (gsp). Of particular importance is improving in a real and effective way market access conditions for products originating in the least developed countries.
7. The process of ensuring that trade and environmental policies are mutually supportive is one to which norway attaches particular importance. We therefore find it important that environmental aspects are taken into account in future trade negotiations. In this regard sustainability reviews are a valuable means of helping to achiev the objective of integrating environment and development concerns into trade policies. Norway has, for its part, initiated environmental reviews and has encouraged others to do the same.
8. Norway also participates actively in the ongoing trade and environment discussions in the wto. Analysis of the interaction between trade and environment policies is a priority. Identifying win-win, or even win-win-win situations (trade/environment/development), is of special importance, for example in analysis of the relationship between subsidies, trade and the environment. Norway also finds it important to continue studying trade-related aspects of eco-labelling and meas.
9. In the area of services, a fundamental step towards trade liberalization was taken in the uruguay round with the gats agreement, which outlines the framework for trade in services. In the present negotiations, norway is looking for real trade liberalisation over a broad range of sectors, including maritime transport and other maritime services, telecommunications, environmental services and offshore-related services, as well as improvements of the gats agreement itself.
10. For norway, as one of the worlds major suppliers of maritime transport services, it is of particular concern that binding market access and national treatment commitments have not been entered by major trading nations for that sector. Ships account for about 90% of international goods transport. Liberalization in this sector would therefore benefit all countries. It is a paradox that negotiations on the fairly liberalised maritime transport services sector, which is crucial to the flow of goods, were not more successful in 1996.
11. The market access negotiations of the uruguay round resulted in increased export opportunities for a number of industrial products of interest to norway. However, the results had a limited effect on trade in fish and fishery products. As of today more than 150 countries import norwegian seafood, establishing norway as the worlds largest exporter of seafood. Further growth in the fishing industry is, however, limited by market access restrictions, for example due to high tariff rates on seafood exports. We therefore attach great importance to a new broad round of multilateral negotiations to provide the necessary forum for achieving increased market access through substantial reductions of bound tariffs for industrial goods, including fish and fish products. As the fishery sector is very vulnerable to non-trade measures, we also favour that forthcoming market access negotiations include non-tariff measures.
12. The norwegian import regime for agricultural products changed fundamentally following the implementation of the wto agreement on agriculture. All non-tariff import measures have been replaced by customs tariffs. Domestic support measures have been adapted in accordance with the wto agreement. Export subsidies have been reduced in compliance with wto commitments.
13. Article 20 of the wto agricultural agreement provides for the continuation of negotiations in the agricultural sector and refers to the "long-term objective of substantial progressive reductions in support and protection". It also lays down that further negotiations shall take into account inter alia experience gained from implementing the existing agreement and non-trade concerns.
14. As regards non-trade concerns, norway has emphasised the multifunctional and multifaceted nature of agriculture as a supplier of public goods such as rural settlement, food security and a living cultural landscape, cultural heritage and biodiversity. These are key aspects of the agricultural sector that need to be properly reflected in the continuation of the reform process.
15. The goal is to safeguard national flexibility in agricultural policy design by allowing the use of appropriate measures to ensure viable agricultural production throughout the country.
16. The transition to tariff-based protection in agriculture in norway facilitated market access for agricultural products from developing countries, in particular from the least developed countries. Under the norwegian generalised system of preferences, all agricultural products from the least developed countries are eligible for preferential treatment, with zero duty on all products except for grain, flour and feedingstuffs. The latter qualify for a 30% cut in duties up to certain quantitative ceilings. In the year 2000, the special safeguard mechanism within the gsp system will be invoked if imports of duty-free beef from the least developed countries exceed 2700 tons. For other developing countries, all products except milk and dairy products, live animals and certain processed agricultural products are included in the scheme. The reductions for these countries range from 100% to 10%.
17. The trips agreement represents a significant step towards safeguarding patents and other intellectual property rights. A well-functioning patent system is of vital importance to innovation, trade and economic growth. Norway has experienced that the patent system has demonstrated an ability to adapt to shifting needs for the protection of technology in new areas. Without the security of respect for their rights, owners of intellectual rights would be reluctant to agree to the introduction of products and services to new markets. It is therefore of great importance to both exporting and importing countries that the obligations under the trips agreement are fully implemented.
18. Given the increasing globalisation of the world economy, it is also necessary to devise rules that encompass areas of trade not yet covered by the multilateral trading system. In our view, new multilateral rules within the wto should be developed in areas such as competition, investment, and trade facilitation.
19. Investment policy related to services is already covered by the gats, but there are no global rules for international investment that affect trade. The enormous increase in foreign direct investments as well as the proliferation of bilateral investment agreements underline the need for global rules.
20. Though the uruguay round succeeded in allaying many of norway's concerns regarding trade rules, there is still need for further improvement in future rule-making, for example on anti-dumping.
21. Norway has noted the increasing resort to anti-dumping and other trade remedy actions, both regarding the number of actions as well as the number of countries applying actions. This development is a cause for concern to norway and poses a challenge to the multilateral trading system. Some wto rules, for example provisions regarding anti-dumping, lack clarity. Norway would generally advocate clear provisions, narrowing the scope for national discretion. In this connection, norway would welcome discussions regarding the limitations under the anti-dumping agreement in respect of the dispute settlement understanding.
22. Norway follows a cautious policy with respect to application of trade remedy instruments. No safeguard, anti-dumping or countervailing measures or investigations have been applied or initiated during the past ten years.
23. The agreement on subsidies and countervailing measures provides important discipline regarding subsidies. Norway believes that the agreements structure regarding prohibited as well as non-actionable subsidies should be maintained.
24. In norways view, the dispute settlement mechanism has proven its value over the first years of its operation. Although norway has only participated as third party in a few cases, we have noted with satisfaction that not only large industrialised members, but also developing country members have taken advantage of the mechanism.
25. New technologies, including e-commerce, for distributing services and goods have introduced new and demanding challenges for both exporters, importers, users of intellectual property rights and governments. Norway is in the forefront of the development and use of electronic networks. From a norwegian point of view the trading system must continue to evolve in such a way that it fosters this development and helps reduce the potential conflicts between interested parties to an absolute minimum. Only through a well-balanced and open trade regime based on the principle of technological neutrality can this be possible.
26. For norway, the average reduction in import duties resulting from the uruguay round was, for industrial products, including fish and fishery products, 39.5% (weighted average). The reductions resulted in a weighted average tariff rate of 2% for manufactured goods. The reductions have been implemented on schedule. In addition, norway has, on a unilateral basis, launched an ongoing process of simplification of our customs tariff, leading i.e. To the abolition of tariffs of less than 3%.
27. Norway has faithfully implemented the agreement on textiles and clothing, and has come a long way in integrating textiles and clothing into the gatt. Of the 54 quantitative restrictions maintained at the start of wto, norway has liberalised all but three quotas for one product (fishing nets).
28. Norway recognises the primacy of the multilateral regime for trade established by the wto. At the same time norway is a party to several regional trade agreements, i.e. As a member of efta (the european free trade association), and thereby party to several free agreements, as well as a party to the eea agreement. Norway sees regional trade and inter-regional arrangements as instruments to complement the global regime and accommodate the need for deeper economic integration. Regional agreements promote trade and economic development at regional level, and will in the longer run pave the way for multilateral and broad trade liberalisation. Consequently, norway will continue to pursue regional and bilateral agreements, in conformity with article xxiv of the gatt and article v of the gats, in order to expand trade and economic cooperation with our partners in europe, the mediterranean area and further afield, and thus safeguard norwegian business opportunities.
29. The norwegian government holds the view that the trading regime of the individual wto members should be based on basic rights, including core labour standards as defined in the ilo. Norway participates actively in the ilo and has ratified all major conventions relating to labour standards. An active dialogue with the parties on the labour market is a prerequisite for facilitating a better understanding of national principles honouring core labour standards. The norwegian government has established integrated national labour market policy frameworks, which recognise the links between the labour market, social development and economic performance.
B. The european economic area (EEA)
30. The agreement on the european economic area (eea) extends the single market of the fifteen eu member states to the three efta countries norway, iceland and liechtenstein. The agreement on the european economic area substantially widens and deepens the free trade relations through the free trade agreement concluded in 1973 between the ec and norway. The eea agreement unites the 15 eu member states and the three efta-eea states into one single market governed by the same basic rules. These rules cover free movement of goods, persons, capital and services (the four freedoms). Under the agreement the efta-eea states are able to contribute to the shaping of this legislation.
31. In addition to internal market legislation the agreement includes flanking and horizontal policies intended to strengthen the internal market. These additional fields of cooperation include research and development, statistics, education, social policy, the environment, consumer protection,
Tourism, small- and medium-sized enterprises, culture, information services and audio-visual services. The efta-eea states participate in eu programmes in these fields and have a voice in developing and managing them through participation in their committees.
32. The agreement on the european economic area does not cover the eus common agricultural policy or the common fisheries policy, but contains provisions on various aspects of trade in agricultural and fish products. As the eea agreement is not a customs union, trade policy towards third countries remains outside its scope.
33. One of the central features of the agreement on the european economic area, and the one which distinguishes it most from other international agreements under public law, is that its common rules are continuously updated by adding new ec legislation. This aspect is essential given the large output of community legislation on the internal market. Each month a number of eea-relevant pieces of legislation are incorporated into the agreement by decision of the eea joint committee. The agreement provides for information and consultation procedures at all stages of the communitys decision-shaping process. Efta experts are consulted by the eu commission in its preparation of draft legislation. The efta-eea states can ask for consultation on matters of concern, and can negotiate adaptations to community legislation as it applies to the efta countries when special circumstances make this necessary. Since the entry into force of the agreement, more than 2000 ec legal acts have been incorporated into the agreement. Important new legislation has for example been incorporated into annex i regarding veterinary and phytosanitary matters.
C. Free trade agreements
34. In the ministerial declaration from the efta ministerial meeting in bergen in june 1995, ministers expressed their intentions to make a dynamic and independent contribution to improving economic conditions across europe and beyond. Starting in 1992, the efta states have concluded free trade agreements with poland, hungary, the czech republic, the slovak republic, bulgaria, romania, slovenia, estonia, latvia, lithuania, israel, turkey, morocco and the plo for the benefit of the palestinian authorities. Negotiations on free trade agreements with canada, macedonia, tunisia, egypt, jordan and cyprus are currently under way, and technical talks have taken place with chile and mexico in order to explore the basis for free trade negotiations.
35. Efta's free trade agreements cover free trade in industrial products, fish and marine products and processed agricultural products. In addition, each efta country has concluded bilateral agricultural protocols with each of the third country partners. The bilateral agricultural protocols are an integral part of efta's multilateral agreements. The free trade agreements incorporate provisions on a number of new trade issues, including rules of competition, state aid, public procurement and protection of intellectual property. The agreements also contain evolutionary provisions for services and investments, as the parties recognise the growing importance of these areas and will co-operate with the aim of achieving the gradual liberalisation and mutual opening of markets for investments and trade in services, taking into account developments in european integration and the wto.
36. Most of these agreements are of an asymmetrical nature; while the efta states abolish barriers to trade at the outset, the partner countries can, for certain sensitive products, phase them out during a transitional period, leaving them the necessary time to adapt their economy to free trade conditions.
37. Norway also takes part in the european cumulation of origin system, established as of 1 january 1997 between the european union, the efta states and the central and eastern european countries.