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04/12/2016

Norway backpedals on EU single market compliance pledge

Innovation & Industry

Norway backpedals on EU single market compliance pledge

norway_single_market.jpg

Though Norway promised in November it would live up to its obligations under the EU single market, the Liberal Party which supports the Norwegian government has changed its mind and said it would forge ahead with punitive taxes on imported EU goods.

For more than a year, the European Commission has complained that Norway, a country which is not an EU member state but has access to the single market via its membership of the European Economic Area (EEA), has put extra taxes on imported goods from the EU and failed to implement more than 400 directives, effectively obstructing the EU's single market.

On 1 January 2013, Norway introduced a tax on certain imported goods, bringing the price of imported EU cheese up by 277% and the the price of imported hydrangea flowers by 72%.

Vidar Helgesenthe minister for the EU and European Economic Area (EEA), visited Brussels in November to assure the European Commission that the new government would start following EU rules.

However, Helgesen did not have a mandate to do so, says the Liberal Party, which supports the centre-right government coalition in Norway.

Shortly before Christmas, the Liberals voted 'no' to eliminating the extra taxes on EU goods during a group meeting in the Norwegian parliament. Speaking about Helgesen's Brussels visit, the Liberal Party's industry spokesperson Pål Farstad told the newspaper Aftenposten that this "happened too fast".

"We in the Liberal Party are in a situation where we wish to affect the agricultural policy and wish that the government takes this into account. I also see that Erna Solberg [the Norwegian prime minister] isn't interested in going too fast on this matter. In the Liberal Party we think that we should process things, take things into consideration, before acting. This is what we're aiming at," Farstad said.

He added that individual Norwegian farmers could risk seeing a drop in profits if they applied the EU's single market rules.

"We have a pragmatic view and want to be part of a process where an eventual change to the cheese tax in Norway should be viewed in a bigger context together with other changes that could strengthen the competitiveness and revenue opportunities for Norwegian farmers and food industry. We want the taxes to be minimised over time," Farstad continued.

Apart from the Liberal Party, Norway's opposition parties, which previously introduced the extra taxes, are also against changing Norway's tax regime.

Marit Arnstad, industry spokeswoman from the Centre Party, currently in opposition, said the lesson for the Norwegian government was to clear these cases with the parliament before sending ideological signals to the EU as the EU minister did.

The European Commission declined to comment.

Background

Norway is not a member of the EU, but closely associated with the Union via its membership in the European Economic Area (EEA), in the context of being a European Free Trade Association (EFTA) member.

After Norwegians voted against an EU membership in 1994, the country subsequently joined the EEA, along with Iceland and Liechtenstein. Iceland is now on course to join the EU.

Norway's trade is dominated by the EU and Norway is the EU's  4th most important partner.

Norway to EU trade amounted to €91.85 billion in 2008, primarily energy supplies (only 14.1% is manufactured products). EU exports to Norway were worth €43.58 billion, and primarily constituted manufactured products.

Further Reading