RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/70 
24 May 2000  
 
(00-2000) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
NORWAY 
 
Report by the Secretariat 
 
  
 
This report, prepared for the third Tr ade Policy Review of Norway, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from the Government of Norway on its trade 
policies and practices. 
 
Any technical questions arising from this report may be addressed to 
Mr. A. Silvy (tel. 739 52 49) or Mr. R. Valdés (tel. 739 53 46) 
 
Document WT/TPR/G/70 contains the policy statement submitted by the 
Government of Norway. 
 
 
 
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/S/70 
 Page iii 
 
 
CONTENTS 
 
    P a g e  
SUMMARY OBSERVATIONS vii 
 (1) O VERVIEW  vii 
 (2) E CONOMIC AND INSTITUTIONAL ENVIRONMENT  vii 
 (3) T RADE POLICIES BY MEASURE  viii 
 (4) S ECTORAL POLICIES  ix 
 (5) T RADE POLICIES AND FOREIGN TRADING PARTNERS  x 
I. ECONOMIC ENVIRONMENT 1 
 (1) I NTRODUCTION  1 
 (2) R ECENT ECONOMIC DEVELOPMENTS  1 
 (i) Structure of the economy 1  (ii) Economic growth and employment 2 
 (iii) Prices and wages 4 
 (iv) Monetary and exchange rate policy 4  (v) Fiscal policy 5 
 (vi) The balance of payments 7 
 (3) D
EVELOPMENTS IN TRADE  8 
 (i) Composition of trade 9 
 (ii) Direction of trade 9 
 (4) T RENDS AND PATTERNS IN FOREIGN DIRECT INVESTMENT (FDI) 12 
 (5) O UTLOOK  12 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 14 
 (1) I NTRODUCTION  14 
 (2) T RADE POLICY FORMULATION AND IMPLEMENTATION  14 
 (i) Main trade laws 14  (ii) Agencies involved in trade policy implementation 15 
 (3) G
ENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK  16 
 (i) Trade policy objectives and formulation 17 
 (4) F OREIGN INVESTMENT REGIME  17 
 (5) I NTERNATIONAL RELATIONS  19 
 (i) World Trade Organization 19  (ii) Preferentia l agreements 19 
 (iii) Generalized System of Preferences (GSP) 22 
III. TRADE POLICIES AND PRACTICES BY MEASURE 23 
 (1) O
VERVIEW  23 
 (2) M EASURES AFFECTING IMPORTS  24 
 (i) Import procedures 24 
 (ii) Customs valuation and rules of origin 25 
 (iii) Tariffs 26  (iv) Other charges affecting imports 38 
 (v) Import prohibitions, restrictions and licensing 39 WT/TPR/S/70 Trade Policy Review 
Page iv 
 
 
    Page 
 (vi) Contingency measures 44 
 (vii) Standards and other technical requirements 45 
 (viii) Government procurement 49 
 (3) M EASURES DIRECTLY AFFECTING EXPORTS  51 
 (i) Export taxes, charges and levies 51 
 (ii) Export prohibitions, restrictions, and licensing 52  (iii) Export finance, insurance, and guarantees 52 
 (iv) Export promotion and marketing assistance 54 
 (v) Export subsidies 54 
 (4) O
THER MEASURES AFFECTING TRADE  54 
 (i) Competition policy and regulatory issues 54 
 (ii) State trading enterprises, stat e-owned enterprises, privatization 57 
 (iii) Marketing arrangements 58 
 (iv) Support programmes 58 
 (v) Intellectual property rights 63 
IV. TRADE POLICIES BY SECTOR 72 
 (1) I NTRODUCTION  72 
 (2) A GRICULTURE  72 
 (i) Features 72 
 (ii) Border measures 75  (iii) Internal measures 78 
 (iv) Export subsidies 81 
 (v) Assistance to specific subsectors 82 
 (3) F
ORESTRY , WOOD AND PAPER PRODUCTS  84 
 (4) F ISHING AND FISH FARMING  86 
 (i) Features 86  (ii) Legal and institutional framework 87 
 (iii) Aquaculture 92 
 (5) M
INING   92 
 (6) H YDROCARBONS  93 
 (i) Features 93 
 (ii) Policy framework 94  (iii) Institutional and legal framework 95 
 (iv) Activities related to the petroleum sector 97 
 (7) M
ANUFACTURING  97 
 (i) Features 97 
 (ii) Policy framework 97 
 (iii) Main manufacturing activities 98 
 (8) S ERVICES  100 
 (i) Introduction 100  (ii) GATS commitments 100 
 (iii) Financial services 101 
 (iv) Telecommunications and postal services 107  (v) Transportation and related services 111 
 (vi) Tourism 115 
REFERENCES   117 APPENDIX TABLES  119 Norway WT/TPR/S/70 
 Page v 
 
 
CHARTS 
    P a g e  
I. ECONOMIC ENVIRONMENT 
I.1 Merchandise trade by product, 1993 and 1998 10 
I.2 Merchandise trade by partner, 1993 and 1998 11 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Frequency distribution of MFN tariff rates, 2000 27 
III.2 Composition of Norwegian tariff, 1999 28 
III.3 Tariffs on manufactured products by HS chapter, 2000 29 
III.4 Tariffs on agricultural products by HS chapter, 2000  31 III.5 Tariff escalation by 2-digit ISIC industry, 2000 33 
 
TABLES 
I. ECONOMIC ENVIRONMENT 
I.1 Gross domestic product by sector, 1995-99 2 
I.2 Basic macroeconomic indicators, 1995-00 3 I.3 Balance of payments, 1995-99 8 
I.4 Foreign direct investment by country, 1995-99 13 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
II.1 Selected trade laws and regulations 15 
II.2 Norway's participation in fre e-trade agreements, January 2000 20 
II.3 Disputes brought to the EFTA Court of Ju stice in which Norway was involved, 1996-99 22 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Summary analysis of Norway's MFN tariff, 2000  28 
III.2 Seasonal tariffs applied on  selected vegetables, 2000  32 
III.3 Summary analysis of Norway's preferential tariff, 2000  34 
III.4 Tariff quotas applied by Norway in 2000  37 III.5 Government revenue from duties and excise taxes in Norway, 1996-99 38 
III.6 Main excise duties, 1999 40 
III.7 Inspection and foodstuff taxes, 2000 41 III.8 Types and scope of restrictions affecting imports 41 
III.9 Main Technical Regulations notified by Norway to the WTO Committee on Technical 47 
 Barriers to Trade, 1995-99 III.10 Threshold values in the GPA, 1998-99 49 
III.11 Government procurement statistics, 1996-97 51 
III.12 Cases handled by the Norwegian Competition Authority, 1996-99 56 III.13 Industry-wide and se lected sector-specific sup port programme in Norway 60 
III.14 Patent, design and trade mark applications, 1993-98 65 
III.15 Enforcement of intellectual property rights in Norway, 1996-98 71 
IV. TRADE POLICIES BY SECTOR 
IV.1 Gross domestic product and value added by industry at current prices, 1997-99 73 
IV.2 Value of agricultural production, 1994-97 74 WT/TPR/S/70 Trade Policy Review 
Page vi 
 
 
     Page 
 
IV.3 Tariff quotas and total imports for pr oducts under minimum access commitment, 1999 77 
IV.4 Support to the agriculture sector 78 IV.5 Product-specific Aggregate Measure of Support:  market price support, 79 
 associated fees and di rect payments, 1995-98 
IV.6 Deficiency payments, 1997-99 80 IV.7 Measures exempt from the reduction commitment, 1995-98 80  
IV.8 Export subsidies, budgetary outlays and annual commitments under the WTO 81 
 Agreement on Agriculture, 1995-98 IV.9 Assistance to the fo restry sector, 1997-98 85 
IV.10 Quantity of catch by fish species, 1995-99 86 
IV.11 TAC allocations, 1998 and 1999 89 IV.12 Transfers associated with Norway's fishery policies, 1997 and 1998 91 
IV.13 Petroleum operations, 1994-99 93 
IV.14 Production of petroleum products, 1994-98 97 IV.15 Structure of the financial sector, 1997-99 102 
IV.16 Telecommunications basic indicators, 1995-99 107 
IV.17 Regulations in the telecommunications sector, 1996-99 110 
IV.18 Vessels registered in Norwegian ship registers 1992-97 111 
IV.19 Civil aviation statistics, 1994-99 114  
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT 
AI.1 Exports by group of products, 1990-98 121 
AI.2 Imports by group of products, 1990-98 122 
AI.3 Exports by destination, 1990-98 123 AI.4 Imports by origin, 1990-98 124 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
AII.1 Status of selected notification requirements to the WTO, 1995-99 125 III. TRADE POLICIES AND PRACTICES BY MEASURE 
AIII.1 Applied MFN tariff averages by HS2, 2000  129 
AIII.2 Bound tariff averages by HS2, 2000  133 
IV TRADE POLICIES BY SECTOR 
AIV.1 Tariff quotas and filling rates in agriculture, 1996-98 135 
AIV.2 Summary of Norway's specific commitments in indi vidual service sectors 139 
AIV.3 Summary of Norway's GATS MFN exemptions 142 
AIV.4 Norway's specific commitments in Fina ncial Services as upgraded under the  143 
 Fifth Protocol to the GATS 
 
 Norway WT/TPR/S/70 
 Page vii 
 
 
 SUMMARY OBSERVATIONS 
 
(1) OVERVIEW  
1. Norway has attained high living 
standards and full employment through a skilful exploitation of its bountiful natural resources and the adoption of sound economic policies;  these include a liberal trade regime 
marred, however, by inordinate protection to 
agriculture.  Since its last Trade Policy Review in 1996, Norway has continued to remove barriers to trade and investment in the wake of its participation in the WTO and the European 
Economic Area (EEA).  For most industrial 
goods tariffs are now zero or low, and non-tariff import restrictions appear minor.  Norway also runs a wide-ranging GSP scheme, granting almost all imports from 
least-developed countries duty free entry.  
Norway's WTO GATS schedule grants unlimited market access and national 
treatment in a large number of services. 
2. Against this positive background, 
Norway faces the long-term challenge of an aging population and an economy closely linked to the production of exhaustible 
hydrocarbon resources.  Sustaining current 
living standards will thus be linked to reducing remaining distortions and hastening the relatively low pace of productivity growth, particularly through further liberalization 
efforts.  Above all, this would call for 
rationalizing assistance to the agricultural 
sector.  Other distortions also need addressing, including those that may arise from certain investment barriers to non-EEA 
investors and from subsidies for regional and 
industrial-policy reasons.  Undertaking such liberalization on an MFN basis and securing it in the WTO would prevent over-reliance on the EEA market, and trade or investment 
diversion. 
(2) E
CONOMIC AND INSTITUTIONAL 
ENVIRONMENT  
3. The period since Norway's last Review 
has been characterized by declining unemployment, low inflation, and strong fiscal and external positions.  Economic growth, 
however, fell from 4.9% in 1996 to less than 1% in 1999;  growth in the mainland economy (i.e. excluding oil and gas activities and ocean 
transport) was expected to remain subdued in 
2000 and 2001.  Although returning to solid, non-inflationary growth represents a short term challenge, the economy as a whole should benefit from the current developments 
in the oil sector, namely from higher oil prices.  
Currently, Norway is the largest exporter of crude oil outside OPEC, ranking second in the world after Saudi Arabia;  petroleum exports contribute some 30% of Norway's total export 
earnings.  
4. Norway's solid economic performance 
reflects prudent management of petroleum and 
gas revenues, sound macroeconomic policies, 
as well as structural reforms and trade and investment liberalization in various sectors.  Fiscal policy has been assigned the task of stabilizing growth in the demand for goods 
and services and is actively used to counter 
external shocks.  Monetary policy seeks the stability over time of the Norwegian krone vis-à-vis the Euro, while recognizing that a low and stable inflation rate is a precondition for 
this stability.  A policy of wage settlement 
moderation has contributed to curbing inflation, while seeking an upward trend in real wages;  however, a tight labour market, particularly since 1998, has put pressure on incomes policy management, leading to 
increases in real wages beyond productivity 
gains. 
5. A key element of economic policy is 
the strategy of investing oil revenues abroad.  Since 1996, the Government has transferred oil-related fiscal surpluses (averaging 5% of GDP annually) to the State Petroleum Fund 
(SPF), which invests solely in foreign 
securities;  mainly as a result of this policy, Norway's net external assets have increased from 3.7% of GDP in 1996 to an estimated 17.2% of GDP in 2000.  The SPF plays an 
important role in moderating real 
appreciation of the krone, thus preventing the emergence of a severe "Dutch disease" situation, whereby th e increase in income WT/TPR/S/70 Trade Policy Review 
Page viii 
 
 
 stemming from oil exports could have caused a 
crowding out of the non-resource tradeable sector.  The SPF also helps smooth out 
fluctuations in oil revenues.   
6. State participation in production 
activities remains large, notwithstanding 
privatization efforts undertaken in recent 
years.  Government procurement is in consequence substantial, accounting for some 7-8% of GDP;  of this some 12% is covered by the WTO Government Procurement Agreement 
(GPA).  Government procurement rules are 
designed to conform to EEA standards and do not grant preferences to domestic suppliers.  Although suppliers from countries that are not members of the GPA may participate in tenders, they may not have recourse to courts to challenge adjudication decisions. 
7. Norwegian competition policy 
legislation functions in parallel with EEA regulations.  Some technical changes to Norway's competition law were introduced in the spring of 2000;  other changes to extend the Competition Authority's competencies are under consideration. 
8. Investment in most areas is largely 
open to foreigners, and national treatment is 
generally granted to foreign investors except in some key sensitive area s such as fisheries 
and airline operations, where foreign ownership is restricted.  Specific conditions 
apply for investment in banks, insurance 
companies, securities firms, for registration and trading area coverage in maritime transport, and for the granting of exploration and production licenses to individuals in the 
petroleum sector.  Norway has some 
horizontal restrictions to investment and foreign ownership, inter alia, regarding residency requirements. 
(3) T
RADE POLICIES BY MEASURE  
9. Since its last Review, Norway has 
continued to further its traditionally liberal 
trade policy, both at the multilateral level, building on the implementation of the Uruguay Round results, and in the context of preferential arrangements.  The average MFN 
tariff in 2000 is 8.1%, less than half the applied rate in 1995.  Most of Norway's trade is conducted duty free under the EEA and 
other preferential arra ngements, 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, mainly those for which Norway made minimum access commitments under the WTO Agreement on Agriculture, are subject to tariff quotas.  
Norway implemented its Uruguay Round tariff 
commitments in agriculture in 1995, also enhancing market access for products subject 
to tariff quotas.  
10. Under Norway's Generalized System 
of Preferences (GSP), im ports 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.  Imports from least-developed 
countries, including most agricultural goods,  
receive duty free treatment.  The average tariff 
for all imports from GSP ordinary beneficiaries was 5.3% in 2000;  the average tariff rate faced by imports from least-developed countries was 1.2%. 
11. A number of domestic indirect taxes, 
chiefly  a value-added tax and various excise duties, are used.  Although these taxes make no distinction between foreign and domestic goods, in some cases they fall mainly on 
imports (e.g., motor vehicles, alcoholic 
beverages, tobacco). 
12. Quantitative restrictions have virtually 
been eliminated, except for import quotas maintained under the Agreement on Textiles and Clothing, which have been reduced since 1996 and now only apply to part of an HS 
tariff heading (HS 56, relating to fishing nets).  
A number of products are subject to licensing requirements to grant preferential treatment Norway WT/TPR/S/70 
 Page ix 
 
 
 or for surveillance purposes.  Licensing 
requirements are generally automatic but a few goods are subject to non-automatic licencing, mainly whale meat and related 
products. 
13. Norway has not had recourse to the 
application of anti-dumping or countervailing duties, or safeguard measures since its previous Review.  Standards and technical 
regulations, as well as sanitary and 
phytosanitary measures have been largely harmonized with those of the European Union (EU), although in a few cases Norwegian regulations remain stricter than those of the EU.  Importation of genetically modified 
substances requires approval and is subject to 
an assessment of human health and 
environmental risk.   
14. Norway continues to grant substantial 
support for regional development, promotion of research and development, economic restructuring and certain sector specific 
programmes;  however, a number of 
programmes in existence at the time of Norway's last Review have been discontinued, and overall support has been somewhat reduced.  Moreover, with the main exception 
of agriculture, and to a lesser extent 
shipbuilding, support programmes are seldom 
sector specific.  
15. Intellectual property legislation 
reflects Norway's obligations in the WTO and other multilateral fora.  Only minor technical amendments to domestic legislation in this 
field have taken place since 1996. 
(4) S
ECTORAL POLICIES  
16. Since Norway's last Review, a number 
of sectoral policy changes have been implemented, mainly in agriculture and services, largely to comply with engagements under the WTO and EEA Agreements.  In agriculture, substantial border protection is 
combined with price support measures;  the 
latter are being gradually replaced with direct income payments.  Prices are fixed for a small number of products, mainly grains, but target prices well above world prices are more 
widely used.  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, which together account for some three quarters of 
the support granted to the agricultural sector. 
17. Petroleum activities are largely open 
to foreign companies, although state 
ownership in the sector remains significant.  
Policies towards state participation in the sector are being reconsidered , including the partial privatization of the national oil company.  Norway is also in the process of aligning its legislation in the petroleum and 
natural gas sector with EU regulations.  The 
1996 Petroleum Act already reflects the requirements of Directive 94/22/EC on granting and using licences. 
18. Norway has a relatively diversified 
manufacturing sector, with many activities 
linked to the petroleu m sector, shipbuilding 
and metal processing.  Protection to manufacturing is generally low.  Support programmes benefit mainly small and medium 
enterprises and are not industry-specific, with 
the exception of shipbuilding where aid must comply with EU rules. 
19. In the services sector, a number of 
changes have been implemented in recent years, mainly in financial services, 
telecommunications and postal services, and 
maritime transport.  Services account for some 57% of GDP and provides jobs to almost three quarters of the employed labour force.  Norway's GATS Schedule grants unlimited 
market access and national treatment for cross 
border supply, consumption abroad and commercial presence of a number of services, including telecommunications construction and related engineering services, distribution 
services and transport services.  
20. Financial services have been 
gradually deregulated and opened since 
Norway's last Review, a process reflected in an increased number of branches of foreign WT/TPR/S/70 Trade Policy Review 
Page x 
 
 
 banks in Norway.  Market access through 
commercial presence is subject to certain establishment conditions, some relaxed since 1996.  The conditions include  a general 10% 
ownership limit for individual investors in 
commercial and savings banks, except for holdings and for foreign banks establishing or acquiring commercial bank subsidiaries;  functional nationality restrictions also apply.  
State participation in the banking system has 
been reduced since 1996 but remains significant.  The Government is considering options for the future of the banking system and its involvement in it. 
21. In the telecommunications sector,  in 
1998 the market was fully liberalized and the 
monopoly rights of the state-owned company, Telenor, abolished.  Since then, competition has increased, with 33 providers of fixed telephony services now registered, and tariffs 
widely deregulated.  A merger between the 
national company Telenor and Telia of Sweden was called off in late 1999;  alternative strategies for Telenor are under consideration, including its partial privatization.  New regulations for the 
provision of postal services introduced in late 
1996 and in 1997 have resulted in a wide liberalization and deregulation of services and prices. 
22. Maritime transport services play an 
important economic role, shipping representing Norway's second largest source of export revenue.  Norway does not participate in liner 
conferences, and price collaboration is, in 
general terms, banned.  The Norwegian International Ship Register is open to all ships but trading-area restri ctions apply;  only EEA 
nationals or firms may be registered in the 
Norwegian Ordinary Register. 
(5) TRADE POLICIES AND FOREIGN 
TRADING PARTNERS  
23. Norway is a founding member of the 
WTO, and participates actively in its work. Norway grants MFN treatment to all trading 
partners and fully implemented its Uruguay 
Round tariff commitments in agriculture in 1995, foregoing the phase-in period.  To comply with WTO commitments, Norway has 
both passed new legislation and amended existing legislation, notably in services, as international agreements must be incorporated 
into domestic legislation before they may be 
invoked in domestic courts.  Norway participated in the WTO Negotiations on Financial Services and in the Negotiations on Basic Telecommunications.  Both the Fourth 
Protocol on Basic Telecommunications and 
the Second Protocol on Financial Services have been ratified by Parliament;  the Fifth Protocol on Financial Services did not require ratification.  Norway has not been involved as plaintiff or defendant in any dispute in the 
WTO since its inception.  In the context of the 
preparations for the 1999 Ministerial Conference in Seattle, Norway submitted proposals in areas such as agriculture, services, competition policy, and fisheries subsidies. 
24. Norway pursues regional interests 
actively, particularly through its participation 
in the EEA and EFTA.  As required by the EEA Agreement, Norway has adapted to a large extent its domestic legislation to that of the European Union, granting largely 
unrestricted movement of goods, workers, 
services, and capital to other members.  As an EFTA member, Norway participates in EFTA's free-trade agreements with central European and Mediterranean countries; in 1999, agreements with Morocco and an interim 
agreement for the benefit of the Palestinian 
Authority entered into force.  Although all such preferential agreem ents provide for free 
trade in goods except some unprocessed agricultural products, the large and expanding 
preferential network compounds trade 
relations and magnifies the differentiation among trading partners.  On a MFN basis, Norway already grants a large share of its imports duty-free treatment and generally imposes no restrictions to investment;  
nevertheless, trade and investment preferences 
raise concerns about possible distortions:  such concerns would be diffused by extending these preferences on a non-discriminatory basis and securing them multilaterally.