In 1995 the U.S. trade deficit with Norway reached $1.8 billion, an increase of
$693 million from 1994. U.S. merchandise exports were $1.3 billion, $25 million
greater than those in 1994. Norway was the United States' forty-ninth largest
export market in 1995. U.S. imports were $3.1 billion, an increase of 30 percent
The stock of U.S. foreign direct investment in Norway was $4.3 billion in
1994, a 13.8 percent increase over that in 1993. U.S. direct investment in
Norway is concentrated largely in the oil and gas sector and related
On November 28, 1994, Norwegian voters rejected membership in the European
Union. Norway retains membership in the European Economic Area (EEA) which
consists of the EU member countries together with Norway, Iceland, and
Liechtenstein. As an EEA member, Norway has assumed most of the rights and
obligations of the EU Single Market. However, Norway has very little ability to
influence EU decisions.
Norway has its own tariff system, but nearly all trade and investment
barriers which limit U.S. access to the EU are being implemented in Norway
either on the basis of EEA obligations or Norwegian government policy. There are
a number of non-tariff barriers in addition to preferential tariff rates for EEA
members. The most significant EEA non-tariff barriers which affect U.S.
commercial interests in Norway concern labeling, mutual recognition agreements,
restrictions on agricultural goods (related to genetically modified organisms
and growth hormones) and preferential treatment of EEA-based firms in publicly
tendered major projects.
Norway's trade and investment regime is in a state of flux, with continuing
implementation of Uruguay Round and EEA commitments. Additional liberalization
steps may be possible based on the successful conclusion of ongoing WTO
negotiations in specific areas.
In July 1995, Norway accelerated its WTO implementation commitments for
tariff reduction on agricultural commodities by immediately adopting the year
2000 bound tariff rate targets. In actual fact, many agricultural product
tariffs rose considerably compared to pre-Uruguay Round levels, and the new
nontransparent variable system adopted by the Norwegian government has made
imports from the United States of fruit, vegetables and other perishable
horticulture products more difficult than under the previously existing import
regime. New Norwegian regulations permit duty increases and reductions with
little or no notice based on domestic production levels. These frequent ad hoc
duty changes are typically announced only a week or two in advance and last from
a few weeks to several months.
Commercial uncertainty caused by such duty fluctuations or the possibility of
such fluctuations, even within Norway's Uruguay Round bound rates, could
effectively prevent the U.S. exports of price sensitive and perishable products,
and favor nearby European suppliers.
Tariff-Rate Quota Administration
The Norwegian Ministry of Agriculture has established an auction for the
rights to import under the tariff- rate quotas established for meats, butter,
eggs, and cabbage. If the auction proceeds to the Norwegian Government, plus the
applicable tariff, exceed the bound rate, then Norway may be in violation of
Article II of GATT 1994.
Norway's barriers to entry and operation for foreign financial service
providers are in transition. Implementation of the EEA accord removed many such
barriers for EU and EFTA member countries and recent deregulation of financial
markets appears to have eliminated many of the barriers facing U.S. financial
institutions seeking to operate in Norway. Norway has also adopted the EU's
Second Banking directive which, among other provisions, allows financial
institutions established in the EEA to open branches in Norway. Branch banking
from the United States is still not permitted, although the Norwegian government
has expressed its intention to introduce legislation which would permit it.
At present, foreign investors must have permission of the Norwegian
Government to purchase more than 10 percent of the equity of an existing
financial institution, and foreign investors may not own more than 33 percent of
the equity of any financial institution without a government concession.
On January 1, 1995, in accordance with EEA National Treatment Directives, the
Norwegian Government changed the rules governing foreign investment in
industrial companies. Under the new system, foreign investors no longer need to
obtain a government concession before buying limited shares of Norwegian
corporations. However, both foreign and Norwegian investors are still required
to notify the government when their ownership in a company exceeds certain
levels (e.g., 33 percent, 50 percent, 67 percent). The Norwegian Government can
then take action if the purchase is considered contrary to national
There are no specific performance requirements imposed on foreign investors.
In the offshore petroleum sector, Norwegian authorities encourage the use of
Norwegian goods and services. The Norwegian share of the total supply of goods
and services to the offshore petroleum sector has been between 50 to 70 percent
in the past decade.
Certain investment barriers for telecommunications and information services
also exist, and the U.S. will continue to seek action to lower these barriers to
a more acceptable level.
Despite ongoing reform of its telecommunications market, Norway still
maintains some restrictions that limit market access for U.S. telecommunications
services and equipment. The state–owned corporation, TELENOR, maintains an
effective monopoly on fixed-line voice services, infrastructure and telex
Equipment which has not been tested and certified under the European Economic
Area's common technical regulations must be type approved by the Norwegian
telecommunications authority. American companies report that this type of
approval process is slow and costly for companies offering new products.
Import Monopoly for Alcoholic Beverages
In accordance with EEA Directives, Norway lifted its national monopoly for
the importation and wholesale distribution of alcoholic beverages. However, for
political and social reasons, Norway retains its high taxes and retail
distribution monopoly for alcoholic beverages, with the exception of beer.
Government Support for the Shipbuilding Industry
In 1995, Norway continued its direct subsidy scheme, which provides
government aid up to 11 percent of vessel contract value. The Norwegian
Government has announced its intention to eliminate shipbuilding subsidies once
the OECD Shipbuilding Agreement -- designed to eliminate shipbuilding subsidies
and to establish a mechanism to addresses the dumping of ships -- enters into
force in July 15, 1996.