RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/138 
13 September 2004  
 
(04-3668) 
Trade Policy Review Body Original:  English 
   
 
  
 
TRADE POLICY REVIEW 
 
NORWAY 
 
Report by the Government 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by the Government of Norway is attached. 
 
 
Note: This report is subject to restricted circul ation and press embargo until the end of the meeting 
of the Trade Policy Review Body on Norway. Norway WT/TPR/G/138 
 Page 3 
 
 
CONTENTS 
Page 
I. INTRODUCTION:  TRADE AND ECONOMIC POLICY 5 
II. THE ECONOMIC ENVIRONMENT 5 
(1) E CONOMIC GROWTH  5 
 (2) G OVERNMENT FINANCES  6 
 (3) M ONETARY POLICY  6 
 (4) S TRUCTURAL REFORMS :  KEEPING NORWAY COMPETITIVE  7 
(i) Deregulating markets and cutting subsidies 7 
(ii) Tax reform 8 (iii) Competition policy 8 
(iv) State ownership 8 
(v) Facts on Norway’s trade 9 
III. TRADE POLICY OBJECTIVES AND DEVELOPMENT 9 
 (1) T
HE WORLD TRADE ORGANIZATION  9 
(2) T HE EUROPEAN ECONOMIC AREA (EEA) 12 
(3) F REE TRADE AGREEMENTS  13 
 
 Norway WT/TPR/G/138 
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I. INTRODUCTION:  TRADE AND ECONOMIC POLICY 
1. As the value of Norway’s external trade corre sponds to more than 75 per cent of its gross 
domestic product, Norway’s trade policy is an inseparable part of its economic policy. The 
Government’s trade and economic policy is designe d to promote sustainable economic growth and 
equitable distribution of the benefits of trad e and economic growth to its population.   
2. In order to benefit from comparative adva ntages and economies of scale, Norwegian 
companies need to participate in markets extendi ng beyond the domestic one.  Moreover, Norway’s 
open economy exposes domestic pr oducers of goods and services to an increasingly globalised 
environment, and one of the Government’s key priorities is to strengthen the international 
competitiveness of Norwegian goods and service pr oducers by ensuring that Norway’s business 
environment remains conducive to innovation, investment and growth.  
3. Sustainable development is a governing princi ple for the Norwegian Government’s domestic 
and foreign policy, and it is committed to pursuing tr ade and environmental policies that are mutually 
supportive.  
4. Trade is not only essential to Norway’s economy, but is of key importance for global 
economic growth and political stability. Trade polic y is therefore embedded in Norway's foreign 
policy, and Norway attaches great importance to inte grating developing countries – and particularly 
the least developed countries (LDC s) – into the world economy.  
5. Norway pursues its trade liberalisation polic y along three main tracks: multilateral trade 
liberalisation through the WTO; regional liberalisat ion through the European Economic Area with its 
EFTA/EEA partners and the European Union; and bila teral free trade agreements in co-operation with 
its EFTA partners, Iceland, Liechtenstein and Sw itzerland. Norway sees regional trade arrangements 
and free trade agreements as being complementar y to the multilateral regime by accommodating the 
need for deeper economic integration.  Thus, Norw ay will continue to purs ue 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 co-operation with it s partners and safeguard Norwegian business 
opportunities. However, regional and bilateral agreements cannot replace the need for a strong, rules-
based multilateral trade regime. 
6. Trade policy has increasingly beco me a topic for political debate in the public domain in 
Norway.  In addition to the traditional debate on th e economic merits of trade, increasing emphasis is 
being put on such aspects as health, environment, food and consumer safety.  To ensure the continued 
support of the general public for the multilateral trad ing system of the WTO, the Government consults 
extensively at the national level with non-govern mental groups, including representatives of trade and 
industry, labour, consumer and ot her interested organisations.  Norwegian trade policy enjoys broad 
political support in the Storting (the Norwegian parliament).  
7. Chapter II of this report gives a brief descrip tion of the Norwegian economic environment, 
and in Chapter III, the Government sets out the broad lines of Norway’s trade policy and 
its development since the last Trade Policy Review in 2000.   
II. THE ECONOMIC ENVIRONMENT 
(1) E CONOMIC GROWTH  
8. Following moderate to slow economic growth in  2000-2002, the growth rate has picked up 
throughout the second half of 2003,  and the Norwegian mainland GDP  is expected to increase by WT/TPR/G/138 Trade Policy Review 
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more than 3 per cent from 2003 to 2004.  The main growth impetus is privat e consumption, fuelled by 
low interest rates and high real wage growth.  Infl ation is being restrained by the appreciation of the 
Norwegian krone in 2002, the fall in prices fo r imported consumer goods, measured in foreign 
currency, and strong competition in many industries in Norway.  
9. The buoyant growth of the 1990s resulted in pr essures in the Norwegian economy, and several 
sectors had problems finding qualified labour.  Wage infla tion surged to more than 6 per cent in 1998.  
Since 1998 unemployment has increased, and wage  growth decreased from 5.7 per cent in 2002 to 
4.5 per cent in 2003. It is expected to decrease furt her in 2004.  The Government has co-operated with 
the trade unions and the employer organisations in  order to promote mode rate wage growth and 
thereby secure the basis for low unemployment and high participation rates. The unemployment rate 
was 3.7 per cent as of 1 July 2004, a moderate reduction from last year. 
(2) GOVERNMENT FINANCES  
10. General government finances are very sound.  The general government balance showed a 
surplus (net lending) of 9.2 per cent of GDP in 2002 and 8.3 per cent in 2003, primarily due to revenues from the petroleum sector.  In the Revised  National Budget for 2004, the surplus for the year 
2004 is expected to be 6.9 per cent of GDP.  General government net assets are estimated at 
NOK 1 320 billion or 81 per cent of GDP at the end of  2004.  Net revenues from the petroleum sector 
are transferred to the Pe troleum Fund, which is the government's instrument for transferring wealth 
from oil and gas reserves to a broad-based portfolio of international securities.  The Petroleum Fund 
has two main purposes: it provides a buffer against fluctuating revenues from the petroleum sector, 
and it helps to maintain a balance by distributing the petroleum wealth across generations. Although 
Norway's petroleum wealth is being depleted, th e return on the invested capital will benefit many 
future generations.  The market value of the G overnment Petroleum Fund is estimated to reach 
NOK 1 016 billion by the end of 2004, up from NOK 220 billion at the end of 1999. 
11. In accordance with the guidelines set out in a white paper on economic policy (Report No. 29 
(2000-2001)  to the Storting), fiscal policy is geared  towards a gradual and sustainable increase in the 
use of petroleum revenues. Over ti me, the structural, non-oil budget deficit is to correspond to the real 
return on the Petroleum Fund, which is estimated at 4 per cent.  This rule is not applied automatically, 
and the actual implementation takes into account bus iness cycle fluctuations around the medium term 
growth path.  
(3) M
ONETARY POLICY  
12. The white paper on economic policy also set out new guidelines that formed the basis for new 
regulations on monetary policy. The regulations lay down that Norway’s monetary policy shall be 
aimed at stability in the Norwegian krone’s domestic and international value.  The implementation of 
monetary policy shall be oriented towards low and stable inflation, defined as annual consumer price 
inflation that remains close to 2.5 per cent over time.  Monetary policy shall also contribute to stable 
developments in output and employment, and to stable expectations concerning exchange rate 
developments.  As a general rule, it is expected that consumer price increases will fall within an 
interval of +/– 1 percentage point from the inflation ta rget.  Furthermore, the interest rate decisions of 
Norges Bank (the central bank of Norway) shall be forward-looking, and pay due heed to the 
uncertainty associated with macroeconomic estimates and assessments.  It shall take into consideration 
that it may take time for policy changes to take  effect, and it should disregard disturbances of a 
temporary nature that are not deemed to affect underlying price and cost increases. Norway WT/TPR/G/138 
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13. The long-term role of monetary policy is to  provide the economy with a nominal anchor.  
Over time, low and stable inflation is an importa nt prerequisite for growth and welfare.  The 
regulations stipulate a flexible inflation target fo r monetary policy.  In th e short and medium term, 
monetary policy must balance the need for low and st able inflation, on the one hand, against the need 
for output and employment stability, on the other.  
14. In June 2004, the Norwegian 3-month interba nk rate (NIBOR) was 2.0 per cent, on a level 
with the euro interbank rate.  The yield on Norw egian 10-year government bonds was 4.6 per cent, 
which was 0.5 per cent higher than the yield on German 10-year government bonds (Bunds). 
(4) STRUCTURAL REFORMS :  KEEPING NORWAY COMPETITIVE  
15. A large number of structural reforms have been  implemented in Norway over the last two 
decades.  The main objectives of these reforms have b een to improve the efficiency of financial and 
product markets and to increase user-orientation and efficiency in the production of public services. Competition has been enhanced through liberalisati on of markets and modernisation of the regulatory 
framework. Privatisation has been pursued gradua lly and on a pragmatic basis. Generally, co-
operation within the context of the European Econom ic Area (EEA) Agreement has promoted reviews 
and reforms of a number of regulations.  
(i) Deregulating markets and cutting subsidies 
16. Product markets have been liberalised to a large extent, and new legislation has been 
introduced for example for various network ser vices. The Energy Act of 1990 deregulated the 
electricity market in one step. Electricity generati on, supply and trade are based on competition, while 
transmission and distribution are regulated monopolies. Nord Pool was established in 1993 as a 
commodity exchange in the Norwegian electric ity market, and was extended in 1996 with the 
incorporation of Sweden, and later Finland a nd Denmark. Telecom markets were deregulated 
gradually, with the last exclusive rights of the former monopoly supplier abolished on 1 January 1998.  
Restrictions on entry into air traffic markets were lifted in the early 1990s. With the opening of Oslo 
Airport Gardermoen in October 1998, limited slot  capacity is no longer a hindrance for establishing 
competing air transport services.  
17. Market-based instruments have been established as an alternative to regulation. A CO2 tax 
was introduced in 1991, and the Government inte nds to introduce an emission allowance trading 
scheme for CO2 emissions from 2005. Fishing quotas have been made transferable (within vessel groups) when a vessel is permanently withdrawn from the fishing fleet (this is known as the unit quota 
system). Unit quotas apply to the ocean-going fish ing fleet.  In 2004, similar schemes have been 
introduced in most coastal fisheries (the structural quota system ), and trials with periodic exchange of 
quotas between operational coastal vessels (the quota exchange system) have been initiated. 
18. The reforms started with deregulation of currenc y, financial and housing markets in the 1980s. 
Budgetary support for industries was reduced through the 1990s, and nearly eliminated for state-
owned corporations and in the fishery sector.  Total allocations to industry amounted to 2.7 per cent of 
GDP in 1992, and 1.2 per cent in 2002. During the period from 1992 to 2002, support to agriculture has been reduced by 20 per cent in real terms. B udgetary subsidies to farmer s have shifted from price 
support to support with less impact on production. In 1990 price support accounted for 30 per cent of 
total direct support, while the corresponding figur e for 2002 was 16 per cent – a reduction of 46 per 
cent. The level of assistance to the agricultural sector  has remained high by international standards in 
order to promote small-scale farming in all parts of the country, and to address non-trade concerns. 
Agriculture received 70 per cent of total budgetary support to the private sector in 2002.  Remaining WT/TPR/G/138 Trade Policy Review 
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budgetary support is mainly of a horizontal nature, such as subsidies to R&D and remote regions.  
(Any tax concessions are not included in these figures.) 
(ii) Tax reform 
19. Corporate profits are taxed at a rate of 28 per cent, as is the total tax on received dividends as 
shareholders benefit from a full imputation system. Du e to Norway’s dual income system, with a flat 
28 per cent tax rate on capital income and progressive taxation of labour income, a need to bridge the 
gap between the taxation of individua ls and companies has persisted.  The highest marginal tax rate on 
labour incomes has increased during the last deca de, and is currently 64.7 per cent (including 
employers’ social security contributions). 
20. In March 2004, the Government presented a white  paper on tax reform with proposals to cut 
taxes in the region of NOK 12 billion over the peri od 2005–2007.  The proposals included a reduction 
of the tax on labour income, taxati on of dividends and capital gains exceeding a risk-free return on the 
personal shareholder’s hand (the sh areholder model), gradual aboliti on of the net wealth tax, and 
repeal of the tax on imputed rent from housing.  Th e proposed reduction of the marginal tax rate on 
labour income combined with a tax on dividends an d gains will make the taxpayer broadly indifferent 
(on the margin) as to whether income from work is  received in the form of wages or ownership 
income.  The Storting decided in June 2004 that th e new model for taxation of share incomes was to 
be implemented from 2006.  This autumn, the Go vernment will propose tax exemption on dividends 
and gains derived by companies as from 26 March 2004 (the publishing date of the white paper on tax 
reform).  Combined with the shareholder model, dividends and gains will be  taxed upon withdrawal 
from the corporate sector, and only to the extent th at such incomes exceed a risk-free return.  The 
Government intends to reduce the marginal tax ra tes on labour income gradually from 2005 and 2006, 
preparing the ground for the shareholder model. 
(iii) Competition policy 
21. A new Competition Act entered into force on 1 May 2004, strengthening the framework for 
competition policy established by the 1993 Competiti on Act.  The new Act prohibits the abuse of 
dominance and agreements that restrict or distort competition, and introduces a general obligation to 
report mergers and acquisitions.  Moreover, th e Norwegian Competition Authority has been 
empowered to impose large fines on companies that  violate prohibitions and to reduce fines to 
enterprises that contribute to the investigation of suspected violations. 
(iv) State ownership 
22. The participation of the Norwegian state in the ec onomy is still extensive.  It is estimated that 
the state controlled some 41 per cent of the Oslo Stoc k Exchange capitalisation in January 2004.  It is 
government policy to privatise when there is no valid  reason to maintain an enterprise in the public 
sector. Privatisation must be handled in a way th at maintains share values and at the same time 
contributes to positive developments for the companies in question.  Decisions to privatise are thus 
taken on a case-by-case basis. 
23. State ownership has also undergone a number of structural and legislative reforms since 2000. 
The Norwegian Government has during the last y ears organised the management of its ownership 
interests in such a way as to keep  the role as owner separate from the roles as policymaker, regulator, 
supervisor, etc. The Ministry of Trade and Indust ry has therefore been ch arged with the task of 
managing ownership in most state-owned enterprises,  while regulatory responsibility remains vested 
in the various ministries.  As a principal rule, state ownership of commercial activities is organised as 
limited liability companies.  Re maining state-owned enterprises no longer benefit from state liability Norway WT/TPR/G/138 
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for loans incurred after 1 January 2003.  State guara ntees apply only to older loans until expiry, and a 
market-based commission is required. This mean s that state-owned enterprises can now go into 
bankruptcy. 
24. State ownership remains extensive in the energy, transport and telecommunication sectors.  
Telenor ASA, the incumbent tele com operator, was partly priva tised in December 2000. After 
subsequent sell-offs the state now holds 53.1 pe r cent.  Statoil ASA, a major company in the 
petroleum sector, has been partly privatised since June 2001.  As of 1 August 2004, the state interest 
in Statoil stands at 76.3 per cent.  The largest electric ity generator, Statkraft SF, is wholly state-owned.  
The banking crisis in the late 1980s and early 1990s  resulted in state take-over of major commercial 
banks. These banks have later been privatised with  the exception of the largest bank, DnB NOR ASA, 
where state ownership currently stands at 33.7 per cent.  
(v) Facts on Norway’s trade 
25. Although Norway has a diversified economy, its  dependency on natural resources is clear.  
Norway is the third largest oil exporter in the wo rld and the petroleum sector (oil and gas) provides 
approximately 45 per cent of Norway’s total export revenues.  Norway is also one of the world’s 
largest exporters of fish and fish products, which account for 5 per cent of export revenues.  Other 
commodities (machinery, ships, metals, chemicals, pulp and paper, etc.) accounted for approximately 
25 per cent of Norway’s total export revenues,  while the service sector accounted for about 
25 per cent in 2002, nearly half of which came from international shipping.  
26. The EU remains Norway’s dominant trading partne r, although the relative share of trade with 
the EU has fallen somewhat since 2000.  In 2003, the EU-15 received about 76 per cent of all 
Norwegian merchandise exports and provided approxi mately 67 per cent of all merchandise imports.  
The comparable figures for the 10 new EU member states are 2 per cent and 4 per cent respectively, and for North America 13 per cent and 8 per cent,  while the figures for developing countries as a 
whole are approximately 6 per cent and 13 per cent, largely attributed to trade with Asian countries. 
III. TRADE POLICY OBJECTIVES AND DEVELOPMENT 
(1) T
HE WORLD TRADE ORGANIZATION  
Norway remains strongly committed to the WTO and the Doha Development Agenda 
27. Norway was one of the founding members of the GATT in 1947 and remains strongly 
committed to the multilateral trade framework under the auspices of the WTO.   The strong, rules-
based system is the best guarantee against unila teralism and protectionism, and provides, stability, 
security, transparency, and pred ictability for traders.   
28. Norway firmly believes that all members stand to gain significantly from further trade policy 
negotiations aimed at strengthening the multilatera l trading system and improved market access for 
goods and services.  Economic growth and development in all nations – and particularly in developing 
countries – depends on a strong and fair multilateral trading system.  Norway is therefore strongly 
committed to the Doha Development Agenda (DDA). 
World trade must benefit developing countries 
29. Norwegian trade policy towards developing countri es plays a central role in the formulation of 
Norwegian foreign and development co-operation policy.  Norway will continue to promote 
improvements to the multilateral trading system and encourage greater integration of the developing WT/TPR/G/138 Trade Policy Review 
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countries, especially the LDCs, by means of im proved market access, transitional arrangements, 
technical and financial support and other measures .  Since the launch of the Doha Development 
Agenda in 2001, Norway has cont ributed approximately CHF 4 million to the WTO’s programmes for 
technical assistance (DDA Global Trust Fund).  Ho wever, Norway continues to advocate that the 
WTO programmes in this field be financed over the organisation’s regular budget, rather than mainly 
by voluntary contributions to a global trust fund. 
30. Norway has also taken a number of unilatera l steps to promote trade with developing 
countries by implementing improvements to its Generalised System of Preferences (GSP).  To this end, Norway unilaterally abolishe d tariffs and quotas on all produc ts from LDCs on 1 July 2002.  
Although a special safeguard mechanism remains in  place for certain products, safeguard measures 
have never been imposed on these products. 
Trade in Services 
31. In the present negotiations, Norway is looking for real liberalisation in trade in services over a 
broad range of sectors, including maritime transpor t and related services; telecommunication services; 
financial services; environmental services; and ener gy and offshore-related services.  Norway believes 
that the scheduling of high quality commitments to market access in the service s sector will benefit all 
members by providing the predictability and stability needed for a substantial increase in the volume 
and quality of trade in services as well as  in foreign direct investment.   
32. As one of the world’s major suppliers of maritime transport services, Norway is particularly 
concerned that major trading nations have not undertaken market access and national treatment 
commitments in this sector.  Ships account for about  90 per cent of international goods transport, and 
committing to liberalisation in this sector would be a means of lowering trade costs to the benefit of 
all countries.  It is cause for some concern that nego tiations on the fairly liberalised maritime transport 
services sector have not been more successful thus far. 
Trade in industrial products 
33. Lowering tariffs on industrial products has been th e main focus of trade negotiations since the 
establishment of the GATT.  However, the job rema ins unfinished, with significant tariffs still in 
place.   Norway’s ambition is to see the elimina tion of all tariffs on industrial goods, including fish 
and fish products.  As one of the largest exporte rs of seafood in the world, exporting seafood to more 
than 150 countries, Norway attaches particular impor tance to substantial reductions in bound tariffs 
for industrial goods, including fish and fish products.  In order to achieve real improvement in market 
access, non-tariff measures must also be addressed.  
Trade facilitation 
34. In addition to reducing and elim inating tariffs and non-tariff measures, Norway is in favour of 
starting negotiations on common rules for trade fa cilitation.  Norway believes that measures to 
facilitate trade, such as simplified procedures for border control and reducing delays in cross-border 
movement of goods, will increase the economic  benefits of trade to all members  
Trade in agricultural products  
35. Small production units, a short growing seas on and difficult topographic and climatic 
conditions characterise Norwegian agriculture.  In  the ongoing agricultural negotiations, Norway has 
therefore argued that countries should be granted flexibility in national policy design in order to 
maintain agricultural production. For countries like Norway, maintaining agricultural production is a Norway WT/TPR/G/138 
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means of addressing important non-trade concerns such  as rural settlements, the environment and food 
security. Non-trade concerns are also part and parcel of the Doha mandate. 
36. Norway recognises that improved market access is  a key element of the agricultural reform 
process. Many agricultural products imported to Norway  are subject to no or very low tariffs. Because  
production conditions are unfavourable in Norway, only a few product groups are produced 
domestically.  Such products are ge nerally subject to high tariffs.  A tariff reduction formula must take 
into account the need for flexibility for sensitive pr oducts.  Norway accepts that the Doha round will 
lead to substantial reductions of trade-distorti ng domestic support and set an end date for the 
elimination of export subsidies. 
37. In recent years, Norway has facilitated market access for agricultural products from 
developing countries, in particular from the LDCs. Under its Generalised Sy stem of Preferences, 
Norway grants duty- and quota-free market access fo r all agricultural products from the LDCs.  For 
other developing countries, tariff preferences rangi ng from 100 per cent to 10 per cent are granted for 
imports of all products except milk a nd dairy products, and live animals.  
TRIPS 
38. The TRIPS Agreement represents a significant st ep 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 right s 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 th e TRIPS Agreement are fully implemented. 
39. Norway has been actively invo lved in efforts to ensure that the TRIPS Agreement is 
supportive of measures to protect public health. In particular, patent protection should not prevent 
access to essential drugs against major threats to pub lic health such as HIV/AIDS and malaria.  The 
Declaration on TRIPS and Public Health in Doha in 2001 provided much-needed clarification in this 
respect.  Moreover, Norway strongly suppor ted the decision by the General Council of 
30 August 2003 waiving restrictions on exports  on the basis of compulsory licences for 
pharmaceutical products.  Norway was also the firs t country to implement the decision in domestic 
law.  
Anti-dumping and other rules on trade remedies 
40. Although the Uruguay Round succeeded in allaying  many of Norway's concerns regarding 
trade rules, there is still a need for further improve ment in future rule-making, in particular on 
anti-dumping. 
41. Norway has noted an increasing tendency to resort to anti-dumping and other trade remedies, 
as shown by the rise in the number of actions and in the number of countries applying them.  Norway 
is concerned about this development, which poses a challenge to the multilateral trading system.  
Some WTO rules, for example provisions regardin g anti-dumping, lack clarity.  Norway generally 
advocates clear provisions that narrow the scope for na tional discretion.  In this connection, Norway 
would welcome discussions regard ing the limitations under the Anti-dumping Agreement in respect of 
the Dispute Settlement Understanding.  WT/TPR/G/138 Trade Policy Review 
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42. Norway follows a cautious policy as regards the a pplication of trade remedy instruments.  No 
safeguard, anti-dumping or countervailing measures or investigations have been applied or initiated 
during the past ten years. 
43. The Agreement on Subsidies and Countervailing Measures provides important discipline 
regarding subsidies.  Norway believes that the Agreement’s structure regarding both prohibited and 
non-actionable subsidies should be maintained.  Norw ay particularly supports the elimination of 
subsidies in the fisheries sector that lead to over-capacity and the depletion of fish stocks.  
Dispute Settlement 
44. The Dispute Settlement Mechanism has proved to be one of the most valuable aspects of the 
WTO, providing developing and developed countries, small and large, with access to a procedure for 
legally binding settlement of disputes.  Since 2000, Norway has been a complainant in one case and a 
third party in five cases.  Norway has noted with  satisfaction that developing country members are 
increasingly using the mechanism to solve their disputes with other members.  
Norway has fully implemented the Agreement on Textiles and Clothing 
45. Norway has fully implemented the Agreement on Textiles and Clothing. On 1 January 2001, 
Norway abolished the three remaining quantitativ e restrictions (fishing nets) of a total of 
54 quantitative restrictions in application when the Agreement entered into force in 1995.  
(2) T HE EUROPEAN ECONOMIC AREA (EEA) 
46. The Agreement on the European Economic Area (EEA) extends the internal market of the 
25 EU Member States to three European Free Tr ade Association (EFTA) countries: Norway, Iceland 
and Liechtenstein. The EEA Agreement covers the free movement of goods, persons, capital and 
services (the four “freedoms”). As it is one of the primary obligations of the Agreement to ensure 
equal conditions of competition, the substantive co mpetition rules of the Agreement correspond to the 
relevant acquis communautaire . This covers the rules concerning cartels, abuse of dominant positions, 
merger control, state monopolies and state aid, as well as public procurement. The Agreement also 
includes areas that have an impact on the comp etitive position of enterprises, such as consumer 
protection, environment, social policy (including  health and safety at work, labour law and equal 
treatment of men and women), statistics and certain elements of company law. Other fields of co-operation include culture, education,  information services, and small and medium-sized enterprises.  
47. The scope of the EEA Agreement does not incl ude the EU’s Common Agricultural Policy or 
the Common Fisheries Policy, but it contains provisi ons on various aspects of trade in agricultural and 
fish products.  As the EEA Agreement is not a cu stoms union, trade policy towards third countries is 
also outside its scope.  
48. A key feature of the EEA Agreement, whic h distinguishes it from most other free trade 
agreements, is its dynamic character. Its common rules are continuously updated by adding new EU 
legislation.  This aspect is essential given the larg e output of Community legislation on the internal 
market.  Each month, a number of EEA-relevant pieces of legislation are incorporated into the 
Agreement by decisions of the EEA Joint Committe e. The Agreement provides for information and 
consultation procedures at all stages of the Community’s decision-making process.  The EFTA-EEA states may ask for consultations on matters of con cern, and may also seek  adaptations to Community 
legislation in its application to the EFTA countries wh en special circumstances call for this.  Since the 
Agreement entered into force, more than 4000 EC legal acts have been incorporated into it.  Important Norway WT/TPR/G/138 
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new legislation regarding veterinary and phytosanitary  matters has for example been incorporated into 
Annex I.  
(3) F REE TRADE AGREEMENTS  
49. Since the early 1990s, Norway and its other part ners in the European Free Trade Association 
(EFTA) – Iceland, Liechtenstein and Switzerland  – have established an extensive network of 
contractual free trade relations in Central and E astern Europe as well as in the Mediterranean region.1 
Free trade agreements with Mexico and Chile have extended this network across the Atlantic, and the 
free trade agreement with Singapore is the first between European countries and an Asian country. 
Since 2000, Norway has signed free trade agreem ents with Chile, Croatia, Jordan, Lebanon, 
Macedonia, Mexico, and Singapore. At present, the EFTA network consists of thirteen free trade 
agreements and eight declarations on co-opera tion. Several agreements are currently under 
negotiation, including some with countries in the Middle East and Africa. 
50. It is the goal of EFTA third-country policy to  safeguard the economic interests of the EFTA 
States by complementing interregional European  trade co-operation and the WTO regimes and 
negotiations. 
51. EFTA's free trade agreements cover free trade in  industrial products, fish  and marine products 
and processed agricultural products.  In additi on, 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 and protection of intellectual 
property.  The scope of the agreements has been  expanded during the last four years to include 
services, investments and public procurement2, as the parties recognise the growing importance of 
these areas. Other agreements contain evolutionary provisions on these areas with the aim of achieving gradual liberalisation and mutual opening of markets for investments and trade in services, 
taking into account developments in Eu ropean integration and the WTO.  
52. Many of the EFTA free trade agreements have b een drawn up in a way that takes into account 
the different level of economic de velopment in the partner countries by providing for an asymmetrical 
approach. The EFTA States are required to abolish ba rriers to trade at the outset, while 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.  
53. Norway also takes part in the pan-European system of cumulation of origin, which will 
gradually be extended to the entire Euro-Mediterra nean area. This represents a major step in 
facilitating preferential trade with originating products.  
 
__________ 
 
                                                     
 
1 From 1 May 2004, the enlarged EEA Agreement re placed the FTAs with Estonia, the Czech Republic, 
Latvia, Lithuania, Poland, Slovakia, Slovenia, and Hung ary following these countrie s’ accession to the EU.  
2 This has been done for the EFTA free trade agreements with Singapore, signed on 26 June 2002, and 
Chile, signed on 26 June 2003.