Image: Terje Engo

The business community can now implement the free trade agreement with the United Kingdom

UNITED KINGDOM
Thursday, December 02, 2021, 07:00 (GMT + 9)

From today, the business community can implement the free trade agreement between Norway and the United Kingdom. This contributes to trade, value chains and competitiveness continuing after Brexit.

This summer, Norway agreed with the United Kingdom on the most comprehensive free trade agreement ever, with the exception of the EEA agreement. The agreement can now be implemented.

"This is good and long-awaited news for Norwegian companies and workplaces. The conditions are now in place for trade with one of our most important trading partners to continue to grow", says Minister of Trade and Industry Jan Christian Vestre.

Historically important agreement for Norwegian business and industry

The United Kingdom is Norway's second most important single market, after the EU. In 2020 alone, Norwegian companies exported goods worth almost NOK 135 billion (around U$D 15 billon) to the United Kingdom, while imports amounted to about NOK 42 billion (around U$D 4,6 billion).

"Trade, investment and business cooperation with the United Kingdom contribute to increased value creation, employment and innovation in Norway", says the Minister of Trade and Industry.

Norwegian industrial companies will continue to be exempt from customs duties, so that Norwegian exporters do not face more cumbersome customs procedures in the UK than competitors from the EU. It will also be easier to get customs exemption when exporting to the UK.

"Even though the agreement does not replace the important connection we had through the EEA agreement, it ensures Norwegian companies at least as good access to the British market as the EU countries. This is crucial for Norwegian business and industry to be competitive in the world", says Vestre.

From left: Liz Truss, UK’s International Trade Secretary, Ranil Jayawardena, UK's International Trade Minister, Guðlaugur Þór Þórðarson, Iceland's Foreign Minister, Dominique Hasler, Liechtenstein's Foreign Minister, Iselin Nybø, Norway’s Minister of Trade and Industry.

The free trade agreement also contributes to predictability for Norwegian investors and service providers. Among other things, the agreement allows Norwegian companies to establish and sell services in the United Kingdom under predictable framework conditions, and facilitates British companies to continue their operations in Norway.

Customs preferences for important seafood products

The free trade agreement ensures the continuation of all tariff preferences for seafood that Norway had while the United Kingdom was a member of the EU. In addition, the agreement entails improvements for certain, important products, such as duty-free treatment for frozen peeled shrimp from 2023.

"We now ensure the necessary predictability in the trade in seafood to one of our most important export markets. The agreement contributes, among other things, to the computer industry and the whitefish industry getting competitive tariff conditions to the United Kingdom. Thus, the agreement contributes to value creation and jobs in the Norwegian seafood industry", says Minister of Fisheries and Marine Affairs Bjørnar Skjæran.

The agreement also forms a framework for further cooperation between Norway and the United Kingdom in the veterinary field, which includes trade in food, feed and live animals. The agreement means that effective border control is planned to ensure that goods enter the market quickly. There is also agreement that Norwegian exports will have the same good conditions as exports from the EU.

Background on the free trade agreement

•     In June, the EEA / EFTA countries Iceland, Liechtenstein and Norway agreed with the United Kingdom on a free trade agreement. Negotiations began in August 2020 and ended in June 2021.
•     Norway has been a spokesperson for Norway, Iceland and Liechtenstein. Ongoing negotiation meetings have been held, both at expert and negotiation leader level, as well as political meetings.
•     The free trade agreement is broader than Norway's other free trade agreements through EFTA cooperation. It contains, among other things, separate chapters on small and medium-sized companies, professional certification and digital commerce.
•     The agreement entails several important improvements for products, such as frozen peeled shrimp. This can be exported with reduced tariffs to the UK from today, 1 December, and duty-free from 1 January 2023. The agreement also provides zero tariffs or access to duty-free import quotas for frozen whitefish fillets. Thus, almost all exports of whitefish to the United Kingdom will be duty free.
•     Although the agreement will provide more predictable framework conditions for Norwegian investors, exporters and service providers, it cannot be compared with the EEA agreement. Before Brexit, Norway had free movement of goods, services, capital and people into the United Kingdom through the EEA agreement. A free trade agreement will not provide equivalent access to the UK market.
•     The free trade agreement with the United Kingdom will be temporarily partially applied between Norway and the United Kingdom from 1 December 2021. The reason why there is no ordinary entry into force is that the United Kingdom has not implemented the necessary national regulations for public procurement. The agreement's chapter on public procurement will therefore not be used temporarily. The UK is expected to be on target for public procurement in March 2022, and the agreement will then come into force in the ordinary way.

Background on trade with the United Kingdom

•     The United Kingdom is the country in the world to which Norway exports the most. In 2020, Norwegian companies exported goods worth almost NOK 135 billion to the United Kingdom, corresponding to 22 per cent of all Norwegian exports, while imports amounted to almost NOK 42 billion.
•     Oil and gas, metals and seafood make up the largest share of Norwegian exports to the United Kingdom.
•     In addition, Norway sells services to the British annually for almost NOK 40 billion. The United Kingdom is among the largest and most important single markets for Norwegian shipping services, engineering services and financial services.
•     The United Kingdom is also one of the largest single markets for Norwegian direct investment.
•     According to the latest available figures, from 2018, Norway imported goods and services worth NOK 85 billion. Industrial machinery, cars and medicines make up a significant proportion of imports.

Source: Kystmagazinet (translated from original in norwegain)

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