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Brussels, 29 January 2010

Negotiations between the EU and Norway on agricultural products: initialling of Agreed Minutes

Norwegian and EU negotiators initialled agreed minutes concluding negotiations that have been ongoing for the last three years with a view to further liberalising bilateral trade in agricultural products. The draft accord is subject to the approval of the respective authorities. This is part of the regular process of progressive trade liberalisation in agriculture foreseen by the EEA Agreement. It will allow the EU exporters to reinforce their position on the Norwegian market. The additional liberalisation represents roughly 20% of the current value of EU exports to Norway; when taking into account already existing bilateral preferences, around 60% of EU exports to Norway will be completely freed (in term of trade value).

The 1992 Agreement on the European Economic Area (EEA) allows Norway to benefit from the EU internal market. However, Agriculture and fisheries are exempt from free circulation. Preferential trade in agriculture between the EU and Norway is ruled by the Art.19 of the EEA Agreement, which foresees regular reviews, with a view to progressive bilateral trade liberalisation.

As regards less sensitive products, the new preferences will consist in the elimination of all tariff barriers, which will significantly increase the number of tariff lines subject to full liberalisation. It represents close to €250 million of EU exports to Norway. The EU will reciprocate this by offering similar liberalisation of the EU market to Norway.

As regards more sensitive products such as meat, dairy, fruit, vegetables and ornamental plants, Norway will grant some tariff quotas or tariff reductions. In particular, Norway will offer some opening of its meat market in the form of tariff quotas (900 tons bovine meat; 600 tons swine meat, 800 tons poultry meat), on the condition that when a future WTO agreement is implemented, these quantities are transformed into WTO MFN quotas. Further small quotas are offered for a few meat products, which should match consumer expectations for speciality products. A number of tariff reductions address ornamental plants, which should allow for a wider offer and some competition between Norwegian production and imported products from the EU. As for the EU side, it will offer tariff quotas corresponding to certain Norwegian interests, notably as regards pet food (13 000 tons).

Bilateral trade preferences in cheese have been gradually increased since the first bilateral cheese concessions in the 70's. At the same time, the conditions attached to these preferences have been progressively relaxed. With the new agreement, a quantity of 2700 tons of cheese will be added to the existing quota of 4500 tons. This will result in a total cheese quota of 7200 tons, which corresponds to existing trade and represents around 8 -10% of the current Norwegian cheese market. There will be no more conditions as regards the type of cheese.

Exports of EU cheeses have boosted the Norwegian domestic market, by bringing progressively more competition and a wide quality choice for Norwegian consumers. This resulted in an increase of per capita consumption, leading to an increase in Norwegian dairy production and upgrades of Norwegian cheese products to match competition. There is still potential for growth on the Norwegian cheese market, when comparing per capita consumption in Norway with neighbouring countries.

The exports of EU agricultural products to Norway have been steadily growing over the last decade and doubled between 2000 and 2007 to €1.6 billion. Norway is a net importer of agricultural products and the agricultural trade balance is in favour of the EU. The increase of EU exports to Norway has also to do with the evolving expectations of Norwegian consumers asking for more diversity in products. As regards total trade, Norway enjoys a positive trade balance with the EU.

The outcome of these negotiations represents a positive step towards progressive bilateral trade liberalisation in agriculture as foreseen by Article 19 of the EEA Agreement.

The main features of the concluded negotiations are as follows:

Concessions granted by Norway to the EU:

  • Additional full liberalisation representing roughly some 20% of the EU exports to Norway, or €250 million.

  • New tariff quotas, in the meat sector (600 t for swine meat, 800 t for poultry and 900 t for bovine meat))

  • Additional tariff quotas concerning cheese (2700 t) cereals (durum wheat 5000 tons, maize 10000 tons, rye 1000 tons), fruits and vegetables (strawberries 300 tons, potatoes 3000 tons, lettuce 400 tons), meat products (sausages 200 tons, ham 200 tons, bacon crisp 100 tons) and juices (apple 1000 tons, bilberry 200 tons, blackcurrant 150 tons). The trade value is estimated at around 50 million.

  • Tariff reductions applying for some ornamental plants and flowers, namely begonias, roses, tulips and lilies. The trade concerned by these concessions is of €3.5 million.

Concessions granted by the EU to Norway:

  • Full liberalisation on products on which Norway offers full liberalisation;

  • Additional Tariff quotas for cheese (3 200 t), fresh raspberries (400 t), potato chips (200 tons) and pet food (13 000 t).

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