Norway, Iceland and the UK have concluded an Agreement on trade in goods that will come into effect on 1 January 2021 and remain in place until a free trade agreement enters into force.
The Agreement ensures that general market access for trade in goods will continue. Among other things, this means that there will be no new tariffs on industrial goods when the UK leaves the single market at midnight on 31 December 2020.
‘Under this Agreement, trade in goods between Norway and the UK can continue with the same tariffs as today. It has been crucial for us to safeguard the immediate interests of Norwegian companies and avoid higher tariffs as the negotiations on a free trade agreement continue,’ said Minister of Trade and Industry Iselin Nybø.
At present, market access is regulated under the EEA Agreement. All existing tariff preferences, including duty-free access for industrial goods, will be extended. For tariff-free quotas for trade in agricultural and fishery products, relevant quotas will be extended based on actual trade between the UK and Norway using the corresponding EU quotas. The Agreement on trade in goods is based on the agreement signed by Norway and the UK in April 2019 to ensure trade continuity in the event of the UK leaving the EU without a deal. This new agreement was signed on 8 December 2020.
Negotiations for a free trade agreement continuing unabated
At the same time, negotiations on a free trade agreement between Norway and the UK continue unabated, and the parties aim to conclude these as soon as possible. The temporary agreement will apply until a free trade agreement is in place.
‘Concluding a comprehensive free trade agreement that ensures the best possible access to the UK market for Norwegian companies, is our main priority. The negotiations are continuing at full speed and I hope they will soon be concluded,’ said Ms Nybø.
The UK is Norway’s most important trading partner after the EU. As of 1 January 2021, when the UK leaves the single market, our two countries will no longer be able to benefit from the predictability and legal safeguards provided by the EEA Agreement.
Norway is negotiating a comprehensive free trade agreement with the UK together with the other EEA/EFTA countries Iceland and Liechtenstein. A free trade agreement cannot replace the EEA Agreement no matter how comprehensive and ambitious it is. Norwegian businesses must therefore prepare to face new trade barriers when the UK leaves the single market.
- In 2019, Norwegian goods exports to the UK were valued at NOK 184.2 billion. Oil and gas exports accounted for approximately NOK 151.4 billion, around 82 % of the total.
- In 2018, services exports from Norway to the UK were valued at approximately NOK 38 billion.
- Imports of goods and services to Norway from the UK were valued at NOK 85 billion in 2019.