WTO Trade Policy Review of Norway
Statement delivered by Ambassador Michael Punke
U.S. Permanent Representative to the WTO
October 9, 2012
Thank you, Chair.
The United States is pleased to participate in Norway’s sixth Trade Policy Review. We extend a warm welcome to Mr. Dagfinn Sørli, Deputy Director General of the Ministry of Foreign Affairs, Ambassador Johansen, and the entire Norwegian delegation. We appreciate the report that your delegation submitted for this meeting. The Secretariat’s report was similarly informative and comprehensive. I would also like to thank our discussant, Ambassador Yonov Frederick AGAH (Nigeria), for his contributions, although he won’t be surprised that I question some of the policy conclusions he draws in his examination of Norway’s trade policy.
The United States and Norway enjoy a long tradition of friendly relations, based on democratic values and mutual respect. This relationship is further strengthened by the millions of Norwegian Americans in the United States and by the thousands of U.S. citizens residing in Norway. Our two countries have an active history of cooperation and we each appreciate the powerful role that international trade plays in global economic and political stability.
The economic relationship between the United States and Norway is positive and growing across several dimensions. Total two-way goods trade between the United States and Norway totaled $11.9 billion in 2011, and two-way services trade between the United States and Norway totaled $4.5 billion in 2010. The U.S. stock of foreign direct investment in Norway was $28.5 billion in 2011, led by the mining and manufacturing sectors. Norwegian FDI in the United States was $18.1 billion in 2011, led by the wholesale trade sector.
As has we have seen in previous TPRs, Norway remains an open and prosperous nation. Over the last decade, Norway has benefited from improved terms of trade, running a surplus in merchandise trade for more than 20 years. As the Secretariat and Government reports make clear, Norway took active steps to counter the external shocks of the global economic crisis. In addition to effective fiscal and monetary policies, the Norwegian government remained committed to market opening policies and continuously sought to strengthen the international competitiveness of Norwegian goods and services. As a result of the effective measures taken, Norway fared far better than other countries, and in 2010, imports and exports returned to the 2007-level.
We commend Norway for its clear and unwavering commitment to the multilateral trading system, which remained steadfast in the face of the global economic crisis. The United States and Norway share a common fundamental desire to ensure the health and vitality of an open global trading system, which we view as critical to promoting economic growth and development for all Members. The United States agrees with Norway’s view that a strong, rules-based system is the best guarantee against protectionism, and provides important transparency and predictability for traders around the world. As the Secretariat indicated, Norway has been an active participant in the WTO, including in all rounds of multilateral trade negotiations and the plurilateral negotiations and arrangements conducted within the framework of the WTO. We have very much valued our work together with Norway on quite a number of issues, including services liberalization and fish subsidies. We would particularly like to express our appreciation for the contributions to the WTO of Ambassador Johansen as Chair of the General Council.
While Norway maintains a liberal trade and investment regime, the troubling disparity between its openness to trade in industrial products and its high level of protection for agriculture has remained unchanged since its last review. As highlighted by the Secretariat, the comparison of the average tariff rates clearly demonstrates the protection afforded to this sector — 40.9 percent for agriculture and less than 0.5 percent for non-agriculture products. This disparity is also reflected in Norway’s approach, along with its EFTA partners, to the negotiation of FTAs, which eliminate tariffs on markedly fewer agricultural tariff lines than non-agricultural tariff lines. And, as the Secretariat report further notes, the protection of primary agriculture production has spillover effects on competition in other areas, such as food processing and the grocery sector. Additionally, a lack of predictability in tariff adjustments and insufficient advance notification of these adjustments, often two days to five days before implementation, create difficult conditions for traders of agricultural products.
The Secretariat notes that support to Norwegian agriculture remains among the highest of the OECD countries, with close to 60 percent of farm earnings resulting from transfers to producers under agricultural policies. Much of that support is provided through distorting types of policies. We continue to encourage Norway to increase the market orientation of its agricultural production and trade policies, including reducing the share of production-linked support and increasing market access. These policy approaches would be fully consistent with Norway’s goals for environmental protection and rural development.
In addition to very high levels of protection for agricultural and food products, traders also encounter problematic SPS barriers in Norway. Norway prohibits the import of beef from animals treated with hormones, despite decades of scientific evidence demonstrating that this practice poses no risks to health. We would encourage Norway to reexamine its measures related to genetically engineered products in light of more than 20 years of experience with their safe use. We would also highlight the importance of science-based regulations to supporting agricultural innovation and functioning trade in agricultural products, both of which will be vital in meeting the world’s food security needs in the coming decades.
The United States submitted advance written questions on certain aspects of Norway’s trade and economic regime, which requested additional information regarding some of the points I’ve mentioned, as well as information regarding Norway’s import licensing requirements, notification of draft technical regulations, and Norway’s new trademark law. We appreciate Norway’s efforts to respond to our questions prior to this meeting.
In closing, the United States and Norway have important common interests, including our longstanding shared support for the multilateral trading system. I would like reiterate that we value our continued work with the Norwegian government and our other WTO partners to strengthen and to build upon the WTO’s critical role. Deputy Director General Sørli, we wish you and your team a successful review, and we look forward to further discussions on trade matters with the delegation from Norway.