Speech/statement | Date: 25/09/2015 | Ministry of Foreign Affairs
'So, I reiterate; the outlook for our future seafood trade is promising! We would like to see more and freer markets in Europe because we believe that will benefit us all. This is a strong priority for the government of Norway', Minister of EEA and EU Affairs Vidar Helgesen said in his speech at the AIPCE's (European Fish Processors Association) meeting in Bergen on 25 September 2015.
Thank you for the invitation to a meeting that is fairly small in the number of people, but fairly big in terms of other numbers. That is why the government attaches great importance to this industry.
Obviously, it’s always very nice to come to Bergen. I am chief of staff of a Prime Minister who is born and bred here, and is representing Bergen, so I must say this. But this region is critically important for Norway.
Fisheries have always been important for the Norwegian economy. We have some other offshore activities these days that trump fisheries in terms of numbers. But what we do know is that fish and seafood will be there also in the low carbon economy of the future. This is currently our second largest industry, but it is an industry we know have great prospects for the future.
It is also important for us in a European context. Our economy, our companies and our citizens all benefit greatly from our trade with Europe, and all the other ways that Norway is connected to the European integration project.
Which we are. Even though we are not a member state we are deeply integrated, and actually more integrated than a number of EU member states. More than two thirds of Norwegian mainland exports go to Europe – 84 % if we include exports of oil and gas.
Seafood is Norway's bestselling mainland commodity, accounting for more than 17 % of the total value of exports from the mainland. We export seafood to over 140 countries, with Poland and France as our largest national markets. The European market is very important to us, and counts for 62 % of our seafood exports. This would be the equivalent of 170 heavy goods vehicles of Norwegian seafood – every day! And every day, 23 million seafood meals find their way from Norway to dinner plates all over Europe. Some might even have it for lunch.
Given this situation, I am sure you understand why I am pleased to have the opportunity to share some reflections with you.
The figures I have given so far describe the current situation. But what is the outlook for the future trade in seafood between the EU and Norway? The short answer is: it’s promising!
The long answer is more complex, but also more interesting.
This summer, we concluded the negotiations on the funding of the next EEA and Norway Grants period. We give a significant contribution, not to the EU budget, but to the 15 countries that are the least privileged countries in Europe.
In parallel, with those negotiations, we negotiate on market access for fish in the EU. I am pleased that we reached an agreement that benefits our companies and fishing industry. Market access for fish was – and still is – a top priority for the Norwegian Government.
The new seven-year agreement will run until 2021. Compared to earlier five-year agreements, this secures more predictable trading conditions for our businesses – and their partners in Europe.
We are happy about the result, but it must also be said that it is a good result within bad perimeters. Our goal is free trade in seafood with the EU, and this is the objective we pursue in our free trade negotiations with all other markets.
This goal is not readily accepted in the EU, but I believe that together we have more to gain from developing seafood markets than from limiting them. Today, imports of Norwegian seafood to the EU create 21 000 jobs, directly or indirectly, in the EU fish processing industry. This figure is based on data from 2011, which means that it would be higher today, especially given the growth in salmon exports.
We believe that removing trade barriers could bring more benefits to the EU and Norway. We don’t believe that trade is a zero-sum game. We believe that unleashing the potential of a freer marked would be of the benefit for all.
But in the short term, and politics is regrettably often about the short term, there are objections, concerns and sensitivities, not least related to employment and jobs.
In the past, fishing fleets and the fishing industry were seen as having conflicting interests. So were exporters and importers. Whether or not this was actually the case is debatable. And in any case, should our past experience form the basis for how we view our trade relations today?
Even if Europe is important to Norway, other markets are also available, and other competitors are in place. We need to take a look at how Europe can do better in the global picture.
We have great experiences in Norway when it comes to ending the protection of the fishing industry. Norway removed subsidies for the fishing industry in the early 1990s. It was much debate about that then, but today the sector is financially quite strong, and the demand for seafood is growing on a global basis. Both Norwegian and European businesses in the seafood sector need to be competitive in order to succeed.
The EU is becoming increasingly dependent on imports to cover the demand for seafood. We should therefore give priority to eliminating trade barriers within Europe in order to be in a better position to compete towards the outside world.
Given the global competition for seafood, and changing trade patterns and production patterns, there are reports that the cost of processing in China is increasing. To me, it makes more sense to process seafood in Norway or in the EU, rather than shipping raw materials to East Asia, only to re-import them back to Europe after processing. Ending that kind of practise to make the European market more compatible and more vital would make an already climate friendly industry even more climate friendly. It would also create more jobs in Europe.
Norway’s trade regime with the EU in the seafood sector is complex, with more than 70 % of our exports subject to tariffs. In addition, the regime consists of more than 50 different import quotas – in addition to GATT and autonomous EU tariff quotas. This is difficult to administer, both for Norwegian exporters and for importers and the authorities in the EU.
As the world’s second largest seafood exporter, with the EU as our most important market, Norway naturally has an interest in liberalising trade. However, we also believe that cutting red tape and removing tariffs and quota limitations in general would increase the trade in seafood and consumer interest in seafood products. All of this would strengthen the seafood industry as a whole and improve its ability to compete with other food industries.
We have seen Canada conclude a free trade agreement with the EU that also encompasses free trade in seafood. And if the Transatlantic Trade and Investment Partnership (TTIP) becomes a reality, this will also affect our competitiveness in the EU. Obviously, the Americans are first concerned in getting the TTP in place and that is in the very final rounds. I believe that when it is in place, there will be more energy on the American side, and there will be more of an urge on the European side to catch up, because the TTP is quite a formidable free trade agreement.
We see an EU that is more than willing to liberalising seafood trade with other third countries, while it seems to be more problematic to liberate trade with Norway - its main supplier and one of its most important trading partners in general.
While we see the rationale, and while we see the short-term arguments of certain countries for this kind of approach, we believe that in uncertain times for Europe, one thing is certain and that is that free trade creates investments and jobs. And the freer the trade, the more jobs, the more growth and the more investment you get.
Jobs, growth and investment are also the key words of the Juncker Commission. They are the key words of the European policies towards revitalising the European economy. We share that goal.
Norway has also commenced on a transition. The falling oil price has made this transition come more quickly, and become more intense than we were prepared for. We have known for a long time that investments in oil and gas would start declining, and we have known for a long time that we need to set our eyes on the low carbon economy of the future, but the fall in the oil price has made it necessary to accelerate that process.
This means that we will be a little less different from the EU. This year we actually see that growth in Europe is higher than the growth in the Norwegian economy. It has been quite some years since that was last the case.
Europe needs sustainable growth, green growth. Protecting the environment and increasing competitiveness can go hand in hand. The same can be said of ‘blue growth’, which seeks to harness the potential of oceans, seas and coasts. Blue growth is therefore also green growth.
About 70 % of the world’s surface is ocean, and vast areas of the oceans are under-utilised. There is great potential in the field of maritime affairs and fisheries for creating innovative and sustainable industries.
That is why we have put a lot of emphasis on our new national strategy on marine research to make the most of the industry’s potential.
Developments in the marine bioeconomy are enabling us to think innovatively about what constitutes a ‘valuable resource’. For example, the use of marine by-products from filleting is one area of growth. The value of the marine ingredients industry in Norway has already grown from around EUR 100 million ten years ago to EUR 1 billion today.
This segment of the seafood industry can provide openings for new businesses and new trade commodities, and possibly help us gain access to new markets.
In the newly concluded negotiations on our market access to fish, we agreed on a new quota for flours, meals and pellets of fish, that can be used by this industry. This is a good example of how we also need to adapt our trade regimes to new industry demands.
Most Norwegian seafood is processed abroad, for example in Poland, and the final product may then be sold and consumed anywhere in the world. Last year, exports to Poland increased by 12 %, making it our most important market. Our Prime Minister participated at the inauguration of the world’s largest sushi mosaic in Warsaw last year, signifying that it is an important consumer market. But most of the seafood it imports from Norway is further processed and then resold, either within the EU or to other markets.
One of the reasons why Poland has grown so fast over the last year is geopolitics. As a global sector, seafood production is easily affected by geopolitics. While many EU member states have been affected by Russian import ban on agricultural products, we have the same with seafood.
For us, the Russian import ban meant that exports to one of our most important markets virtually disappeared overnight. However, the ability of our industry to adapt has been impressive, and 2014 was yet another record year for Norwegian seafood. The main driver behind this growth has been high salmon prices, helped by good export figures for both cod and mackerel.
The Russian import ban has also led to higher exports to the EU market. I just mentioned Poland as one example. I could have mentioned others. 12 out of 28 EU member states can be regarded as ‘billion kroner’ markets for Norwegian seafood.
At the same time, new markets are becoming increasingly important. I already mentioned Canada and the US. We are also looking eastwards. We are working hard to complete free trade negotiations with various new and interesting markets – especially in Asia. We are currently negotiating with Malaysia and Vietnam, and with the Philippines. We also hope to conclude a free trade agreement with India. Again, geopolitics has an impact on these processes. We are naturally at a standstill in our free trade negotiations with Russia.
Our engagement in the global market is increasing, but so is global competition in the seafood sector. We can all expect more competition as economies and the middle class continue to grow in countries throughout Asia. Having more fish on the market is a good thing, as this could expand the seafood markets in Europe by giving consumers greater choice. This may also make it possible to increase overall seafood consumption.
However, in this context, a few questions can be raised: Where does the EU want to source its seafood from in the future? Which suppliers are the most reliable? Which suppliers can give the best guarantee that their products come from sustainably-managed fisheries? I believe that this is one of the competitive advantages the Norwegian and European seafood industries have. That is why we have to work together. We need to work together on research and innovation. We need to work together on marketing European brands globally. Because we can offer the green choice in a blue sector.
So, I reiterate; the outlook for our future seafood trade is promising! We would like to see more and freer markets in Europe because we believe that will benefit us all. This is a strong priority for the government of Norway.
I understand that you have had an interesting stay in Bergen and the vicinity. I saw that you visited the Bocuse d’Or winner. This restaurant is an example of how the seafood industry has not only benefitted our export numbers, but also the quality of the restaurant scene. It is impressive that a small community of 400 people can host such a restaurant. Quality is something we share and something we like to have in common. I believe that if we work on quality, together we can improve the quantity. I wish you a good continued stay in Bergen! Thank you.