Norway and the UK have agreed to enter into a temporary agreement on trade in goods that will come into effect on 1 January. The agreement will remain in place until a free trade agreement enters into force a few months later.
‘We have agreed to put in place a temporary arrangement. This is good news. We are now in close talks with the UK on adjustments to the agreement that will mean that we can continue to avoid tariffs on industrial goods. However, it is important that the business sector is aware that this agreement is limited in both scope and duration,’ said Minister of Trade and Industry Iselin Nybø.
The temporary agreement will be based on the agreement signed by Norway and the UK in April 2019 to ensure trade continuity in the event that the UK leaves the EU without a deal.
‘It is important to ensure that trade in goods between Norway and the UK can continue after 1 January on the same conditions as today. This temporary agreement will safeguard our interests while we press on with our negotiations to finalise a free trade agreement as quickly as possible. After the EU, the UK is our largest trading partner, and our two countries agree on the need to maintain close and wide-ranging cooperation,’ said Minister of Foreign Affairs Ine Eriksen Søreide.
Negotiations continuing unabated
Negotiations on a free trade agreement are ongoing and the parties are aiming to conclude the negotiations as soon as possible. However, a great deal of work still needs to be done before a free trade agreement can enter into force. Norway and the UK have recognised that it will not be possible to conclude an agreement that can enter into force on 1 January 2021 and have therefore agreed to put in place a temporary arrangement for trade in goods.
‘The negotiations on an ambitious and comprehensive free trade deal have reached an intensive and demanding phase. Norway and the UK have agreed to press forward with the negotiations with a view to bringing them to a successful conclusion as soon as possible,’ Ms Nybø said.
In addition to the agreement on trade on goods, limited and temporary arrangements for services and investments are also being considered.
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 adhere to a common set of rules, will no longer cooperate on the dynamic development of harmonised legislation, and will no longer be able to benefit mutually from the predictability and legal safeguards provided by the institutional framework of the EEA.
Norway is negotiating a comprehensive free trade agreement with the UK together with the other Efta countries Iceland and Liechtenstein. While the negotiations are continuing at full speed, they are behind schedule, partly because they only got fully under way in August due to delays in the UK. A free trade agreement cannot replace the EEA Agreement no matter how comprehensive and ambitious it is, and the Norwegian business sector must 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.