Many Brexit-proponents, including Richard Tice, the co-chairman of the Leave.eu campaign, have pointed to Norway’s success as an example for Britain to leave the EU. But its fortunes have not come because of it remaining outside the EU, writes Paal Frisvold.
Paal Frisvold is the managing director of consultancy firm Geelmuyden Kiese’s Brussels office.
Norway’s economy has indeed thrived outside the EU since the 1994 referendum. No other market economy in the world has enjoyed such persistent high economic growth over the past two decades; coined as Norway’s golden era by the governor of its central bank. Today, the country’s sovereign fund is valued at a staggering €778 billion. Is it due to having remained outside the EU? Of course not.
A combination of unprecedented high oil prices, sound economic management and access to the Single Market is responsible for Norway’s wealth. In practice, Norway was never outside the EU: As a member of the European Economic Area Agreement (EEA), Norway adopts all Single Market legislation just like any EU member state, with the exception of the common agriculture and fishery policies.
But as a non EU-member, the government in Oslo is barred from attending EU negotiations taking place in the Council, and not a single Norwegian can be found in the European Parliament. Today, the Norwegian reality is one of political impotence as the government struggles to further develop key economic sectors at a time of declining oil revenues.
When Single Market rules run contrary to Norway’s interests, the democratic deficit of the EEA hurts the most. Requests for exemptions to EU law are in fact presented to the Council of Ministers by the EU’s own diplomatic service in Norway’s absence. A high price to pay for access to the Single market.
Back in 2009, a surprisingly honest appraisal of the EEA Agreement by the Norwegian ambassador to the EU was leaked to the press. It described how the establishment of EU agencies to manage sector-specific issues had significantly weakened Norway’s ability to influence the EU. Such agencies include areas of maritime safety, energy and financial markets, where Norway has strong economic and commercial interests.
As an observer, Norway can neither vote nor comment on political priorities and budgets. Hiring Norwegian staff is close to impossible, despite paying its fair share of each agency’s budget.
Another problem outlined in the report was the rapid pace of EU decision-making. It turned out that many significant political and legislative proposals had simply gone under the radar: From the European Parliament resolution on banning of trade in seal products to, more importantly, the banking deposit guarantee scheme.
Not long ago, it was discovered that Norwegian cities could no longer apply to become European cultural capitals, as the Commission’s proposal to change the selection criteria had gone by unnoticed.
Outside the Common Fisheries Policy, exports of Norwegian salmon, shrimps, mackerel and herring suffer from high tariffs. Norwegian fish farming industry has developed vastly since 1994, representing close to 70% of global production of Atlantic salmon of which 60% is exported to the EU.
Faced with fierce competition from the UK, as well as North and Latin America, EU tariffs on processed fish products are the industry’s biggest hurdle to further growth. The government-appointed EEA Review Committee from 2012 estimated that tariffs on processed fish had moved some 20,000 jobs from the Norwegian coast to Denmark, France and Poland.
Not being part of EU common trade policy leaves Norway sovereign, but lonely, and powerless towards unfair treatment. After Chinese dissident Liu Xiaobo received the Nobel Peace Prize in 2010, China practically stopped buying Norwegian salmon and continually refuses to engage in negotiations on a bilateral trade agreement. Oslo has not dared to replace its Beijing ambassador of eight years for fear that his successor will not be granted accreditation.
Russian veterinary authorities played yo-yo with Norway by periodically imposing trade embargos due to often-unclear accusations of breaching Russian veterinary norms. As Norway applies the same food safety laws as any EU member state, Oslo often turns to Brussels for help, asking the European Commission to put pressure on Moscow. Similarly, Norway´s largest telecom operator, Telenor, has turned to the EU for help in Asia.
Nigel Farage has repeatedly stated that the UK would gain access to the Single Market despite a Brexit, just like China and countries all over the world enjoy as WTO-members. The EU currently has 44 ongoing investigations for anti-dumping, 34 of them with China and the rest with large powerful countries such as Russia, Brazil and India.
This used to be the case for Norway: threats of anti-dumping measures forced Norwegian producers of aluminium and ferro silicon to unilaterally adapt to EU demands. Common competition laws under the EEA agreement made such trade measures obsolete.