Norway promises to reduce tax on imported EU meat and cheese

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The newly-elected Norwegian government has promised to reduce the tax that the previous government had put on goods imported from the EU, such as cheese and meat. The tax breaches the rules of the EU’s single market, of which the Scandinavian country is a part.

Norway’s new centre-right government aims to change the current tax regime on farm and food products imported from the EU.

However, it will take some time to assess the current situation before a proposal can be put forward, Norwegian EU and European Economic Area (EEA) Minister Vidar Helgesen told the Europe committee in the Norwegian parliament on Friday (15 November).

On New Year’s Day 2013, Norway introduced a tax on certain goods imported from the EU. This meant, for example, that the price on cheese from EU producers went up by 277%. Norway also raised the price of imported hydrangea flowers from the EU by 72%.

The meeting on Friday was held to inform the Norwegian parliament of which areas the new government will lead a different EU policy than the previous one.

“Tariffs are important for the profitability of Norwegian agriculture, but the consideration for the Norwegian consumers and food industry supports a reduced tax,” Helgesen said.

“The government believes that Norwegian agriculture production could do with competition on quality from other countries. New international trade deals in the future could also in the future make bigger rearrangements of the agricultural policy necessary,” the minister added.

Sharp criticism from the EU

Earlier this year, a European Commission draft report looking at the functioning of the EEA, criticised the Scandinavian country, which is not an EU member but has access to the EU’s single market via its EEA membership.

The Commission criticised Norway for not only imposing tariffs on EU products from 2013 and “resisting EU efforts for ambitious liberalisation” of the EU’s single market but also for failing to implement 427 directives, including the EU’s postal directive.

“This situation might thus lead to competitive advantages for operators based in the EEA-EFTA countries, and more fundamentally risks undermining the legal certainty and homogeneity of the single market,” the report stated.

Dacian Ciolo?, the commissioner responsible for agriculture and rural development, also threatened Norway last year with sanctions ahead of the introduction of the taxes.

“The Commission will, if the changes [the increased taxes] are adopted, investigate the possibilities of a court trial. Regarding possible sanctions or retaliatory measures, the Commission will consider every possibility there is if the changes are adopted,” Ciolo? told the European Parliament’s international trade committee.

While Johannes Hahn, the commissioner for regional policy, said he did not expect such actions “from friends and neighbours”, Danish MEP Bendt Bendtsen from the European People’s Party (EPP) called Norway a “selfish” country.

Running EU errands

Helgesen, who represents the Norwegian Conservative and pro-EU party Høyre, mentioned the sharp criticism from the EU and some member states as a reason for reducing the tariff.

Norway will also inform the EU that the country will implement the EU’s postal directive and make it possible in the future for the EFTA supervisory body ESA to fine Norwegian enterprises which breach the rules on marketing of medicines. This is also part of Norway’s EEA agreement.

Nils Bjørke, the director of the Norwegian Farmers’ Union, said that the Norwegian government was acting “dramatically”.

“The government is now running errands for the EU industry instead of preserving Norwegian interests,” Bjørke told the daily Nationen.

“The EU is of course occupied with its own interests, but I had expected that the government stood up for Norwegian interests. They are trying to be the good student in the class, but you rarely get something in return for being that,” he said.

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.

Timeline

  • 19 Nov.: Norway to inform the EU on the taxes as part of the half-yearly EEA Council meeting in Brussels.
  • End 2013: EU to publish review of the functioning of the European Economic Area.

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