A trade deal with Norway, Iceland and Liechtenstein with provisions for digital paperwork to cut the time and costs of post-Brexit border bureaucracy has been championed by International Trade Secretary Liz Truss as a “big boost”.
After months of difficult talks, the Comprehensive Trade Agreement has been hailed by the British and Norwegian governments as a pioneer in scope and measures, with tariff-free trade in industrial products.
UK businesses exporting to Norway and Iceland will be able to rely on state-of-the-art electronic documentation to facilitate onerous customs procedures made necessary by the UK’s exit from the EU.
Truss said the deal would be crucial in boosting an economic relationship already worth £ 21.6 billion, while “supporting jobs and prosperity in the country’s four countries.”
As part of the deal, Norway cut tariffs in 26 areas of agriculture, which includes provisions allowing a quantity of farmhouse cheddar from the west of the country, cheddar from the Scottish Orkney Islands, caerphilly traditional Welsh and Yorkshire wensleydale cheese to avoid 277% export duty. The total quota of UK cheese that can be sold on the Norwegian market duty-free has not, however, increased.
The deal will cap the fees that mobile operators are allowed to charge for international mobile roaming, a world first in a free trade agreement, by keeping costs low for vacationers and business travelers.
It also allows highly qualified UK professionals to enter Norway, Iceland and Liechtenstein for business purposes and includes recognition of professional qualifications to ensure nurses, lawyers, veterinarians and other professionals will not need to re-qualify. to work in partner countries.
The Norwegian government, meanwhile, celebrated getting the same merchandise trade relationship with the UK as the EU under its trade and cooperation agreement and that there will be no duty on frozen peeled shrimp from January 1, 2023, a key export.
“The agreement involves the maintenance of all previous tariff preferences for seafood and better market access for whitefish, shrimp and several other products,” said Odd Emil Ingebrigtsen, Norwegian Minister of Fisheries. “For the shrimp industry in Senja and the land-based industry in northern Norway, this will be of great importance.”
The agreement also echoes that between the United Kingdom and the EU, concluded last Christmas Eve, with some improvements in the margins.
Erna Solberg, Norwegian Prime Minister, speaking in Oslo, acknowledged that it had been vital to secure a deal with the UK, the country’s second largest trading partner behind the EU.
She cautioned, however, conceding on Friday that there would be additional costs for businesses on both sides that used to trade with the UK when it was an EU member state.
Solberg said it was inevitable that trade would be “more bureaucratic and less dynamic” than pre-Brexit deals, with costs yet to be calculated. Without a veterinary deal, there would be more red tape for those exporting animal and plant products, she said, and the lack of mutual recognition of changes in regulatory frameworks on both sides would require further discussions. in the future.
A key dynamic in the trade negotiations had been the UK’s demands for better market access to the Norwegian market for its meat and dairy products, while Norway had hoped for better terms of trade for its seafood. , the final deal released by the Norwegian government revealed that both sides had refused to move significantly on their red lines.
As details of the deal emerged, Norwegian fishermen complained about their seafood’s level of access to the UK market, while UK farmers had little to celebrate.
Norwegian Agriculture and Food Minister Olaug Bollestad said it was vital for the center-right coalition government to protect its small but politically important agricultural sector from the threat of beef and British cheeses cheaper.
She added that her Christian Democratic Party had not wanted to reward the UK with better access to Norway than it enjoyed as an EU member state.
“We managed to take care of the most important things in Norwegian agriculture,” she said. “If more British beef and cheese had come to Norway, maybe even more Norwegian farms would have to be closed. “
Since the UK left the single market in January, the country’s trade with Norway, Iceland and Liechtenstein has been covered by a continuity agreement that covered goods, but both sides had also sought to open up more flows in key areas.
According to the Norwegian government, 22% of all Norwegian exports go to the UK, with high demand for oil and gas, fish and seafood, and industrial products.
David Henig, a former UK government trade official who is now director of the UK Trade Policy Project, said: “This free trade agreement between the UK and the EEA offers better trading conditions than those of the World Trade Organization, but with many more trade barriers compared to previous relationship with the Single Market.
“There are some useful arrangements for UK businesses, such as professional qualifications or digital commerce, but there will also be a lot of difficulties, as we see with the similar trade and cooperation agreement between the UK and the EU. Overall, this is a fairly standard free trade agreement, with limited economic value.