On the 4th of June, the Norwegian government announced that Norway has entered into the largest free trade agreement since the EEA agreement. The government is now waiting for the consent of the Norwegian parliament to enter into the agreement before it is ratified by Norway. The agreement is expected to take effect at the earliest during the summer of 2021.
After the United Kingdom left the EU, there has been uncertainty about how Norway will relate to one of its most important trade relations. A free trade agreement has now been negotiated between the EEA countries Iceland, Liechtenstein and Norway on the one hand, and the United Kingdom on the other.
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A core principle for Norway in the negotiations has been that Norwegian companies should have similar opportunities in the British market as countries within the EU. The Norwegian Government has stated in its press release that this has been achieved, and that Norway in some cases has achieved better conditions than the EU countries.
One of the most important things to note about the agreement is that tariff exemption for industrial goods will be continued. The United Kingdom is by far one of Norway's largest single markets for the export of industrial goods. The free trade agreement continues the historic tariff exemption for industrial goods between Norway and the United Kingdom, which has lasted for almost 60 years.
Another important part of the agreement is that Norwegian citizens who want to establish a business in the UK can stay there for three months to do so, and vice versa. Norwegian citizens on a business trip can stay in the UK for up to 3 months.
If you are Norwegian and employed by an international company established in the UK, you can get up to 3 years of residence with your spouse / partner and children. If you operate in certain industries, for example as an installer, researcher, musician, etc., you can also stay for up to 3 months with the other party.
Seafood and agriculture
The agreement also ensures good conditions for the seafood industry, in the form of tariff rates and duty-free quotas corresponding to what Norwegian exporters had to the UK before Brexit. This strengthens the predictability for seafood businesses, as they know what to expect from tariff preferences and duty-free import quotas.
When it comes to agriculture, the agreement opens for increased trade between Norway and the United Kingdom. Norway has nevertheless wanted to protect its grass-based productions within the dairy and meat industry, as the Government sees this as important for supporting Norwegian agriculture. For this reason, priority is given to import quotas for goods where Norway has a need for this.
Board composition for limited companies
The agreement also clarifies an uncertainty related to requirements for board composition for limited companies. Pursuant to Article 3.9 of the Agreement, neither party will set regulations on the domicile or nationality of the management or member of the board of a company that exists or will be established.
The agreement contains several other chapters, where a selection can be summarized as follows:
- Technical barriers to trade - Norway shall have similar conditions as the EU, where the rules apply to the preparation, adoption and application of standards, technical procedures etc.
- Trade measures - Protective measures, such as rules against dumping and on equalization fees.
- Trade facilitation - Regulate what transparency there should be between the parties when it comes to announcements of new laws and rules that may affect cooperation.
- Trade in services and investments - Ensures stability in investor access, with clear framework conditions.
- Financial services - Enterprises from the parties' countries may establish themselves in each other's markets in accordance with the rules that apply to the country in which they are established.
- Maritime Transport - Ensure open access and non-discriminatory conditions for the parties' ships in international traffic.
- Legal services - Lawyers are given the right to provide legal assistance under the title of the home state with the other party.
- Trade and sustainability - The agreement emphasizes that all trade between the parties must take place in a way that contributes to sustainable development, and that is as climate neutral as possible.
The agreement will enter into force as soon as the parties have completed their internal procedures for approval, and the agreement will then be signed.
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Also see: Brexit overview