Minister of Trade and Shipping Grete Knudsen

"Norway - your partner in the single Market through the EEA Agreement"

"ITALY - NORWAY FORUM"
Milan, 14 December , 1995

Excellency, ladies and gentlemen,

In coming to Italy with my delegation of high government officials and Norwegian business executives, I was reminded of the fact that your country over the years has opened its arms to so many Norwegians before us.

They all came to Italy - the cultural centre of Europe - our gifted artists, painters, musicians and sculptors, our authors, poets, historians and architects. They came to seek spiritual inspiration in the visual arts and architecture, astounding in its quality and quantity, in terms of technical mastery and innovation. Your country has had a definite influence on whoever came here to develop his or her talent.

It was in Italy that Henrik Ibsen wrote his masterpiece, "Peer Gynt": the personification of the Norwegian soul. The idea which supports the conclusion of this dramatic poem is closely related to Dante's Divina Commedia. It was to Italy that our famous author and Nobel Prize winner in literature, Sigrid Undset, set the course to seek new ideas, to dwell on the cultivated tranquility of Italy's landscapes, enshrined in poetry, sculpture and art. And where did our opera singer, Elizabeth Nordberg- Schultz find the stage that brought her career to the very top: here in Milan, at La Scala.

Europe - Norway and Italy - North and South - we share a common history and cultural heritage. We share common values and traditions. Together these elements form the required basis for close inter-personal relations. A basis on which we are now building close political and economic ties between our two nations.

We have looked to Italy again, and we decided to come here to Milan, your financial and business center, to present Norway as your European partner. We want to emphasize the importance of the human dimension in today's changing Europe, to revitalize our relations, to seek inspiration.

This morning I met with Minister d'Urso, and we developed further the very good and constructive dialogue that started during our meetings last spring and summer. I have used these meetings to explain that the result of the referendum a year ago, when Norwegians decided against joining the European Union, was only a no to full membership, but it was a yes to European cooperation. And this yes is increasing. According to a recent survey, 62 percent of the Norwegian population supports our participation in the Single Market through the EEA Agreement.

We Norwegians are internationally oriented. Global challenges engage us. But first and foremost we are Europeans. And in a situation with increasing economic cooperation and integration in Europe, Norway will seek solutions which respond to the challenges we are facing.

What are these challenges? In fact they remain quite unchanged. Europe's future is our future. Our economy is an integral part of the European economy,. A few figures on Norway's foreign trade demonstrate this: 80 % of our export goes to EU countries and 70 % of our import comes from the EU. Furthermore, Europe's security is vital to our security, and we share the same environment. These basic facts underpin our European policy also in the years to come.

There is a broad consensus in Norway in favor of continued active participation in European cooperation. Our stated ambition is to take part in the ongoing process of European integration East-West, North- South, contribute to this process and take upon us the required responsibilities. Europe of today is a challenging factor in our daily lives as well as in our thinking.

No other non EU member country has closer ties with the European Union than Norway. We are allies with 11 EU countries in NATO - (Italy being one of these countries). We have been an associate member of the Western European Union since 1994. And - we are part of the single market through the Agreement on the European Economic Area, the EEA Agreement.

Our aim is clear: We are making use of the opportunities to develop our relations with the Union. Our bilateral relations with EU countries are even more important now. We must know you better - focus on the human dimension in trade and economic policy - and provide you with facts and figures about our country.

I am therefore very satisfied that together, Italy and Norway have decided to arrange this important FORUM: an excellent opportunity to meet, talk, make contacts, learn more about each other and our potentials and build a close partnership.

Norway's key to the European Union today is the Agreement on the European Economic Area, the EEA Agreement. It is within the EEA Agreement that we conduct our relations with the EU, and we are, through the EEA Agreement, as much a part of the Single Market as any EU Member State.

The EEA Agreement came into effect on 1 January 1994. It includes the so-called four freedoms (the free movement of goods, services, capital and persons within the EEA) as well as cooperation in areas such as research and development, education, consumer affairs and working conditions - the so-called social dimension - and also small and medium enterprises. Our full participation in the fourth framework program on research has been particularly encouraging. The acceptance rate for projects initiated in Norway is in fact above the average for the EU as a whole.

Agricultural policies are exempted from the EEA Agreement. However, the countries have agreed to gradually expand their trade in agricultural products. Also, there is no common fishery policy for the EEA. But the agreement provides for extended market access for fish and seafood products. This is of great importance to us.

When Sweden and Finland left EFTA and joined the EU on 1 January this year, the EEA Agreement was adapted to the new realities in a very pragmatic and flexible manner, and we all agree that the EEA Agreement is functioning well in the new situation. Let me take this opportunity to underline, that the EEA Agreement is indeed a dynamic agreement. A continuous integration of new EU legislation into national law is taking place, and the Agreement establishes a framework for further cooperation.

Again, the important point is that through the EEA Agreement, Norway is basically fully integrated into the Single Market. The Agreement ensures that Norwegian businesses and industry can compete with companies from the EU countries on equal terms both in the EU and in Norway.

Furthermore, Norway is part of the Nordic family. No passport is needed to cross borders between the Nordic countries, and we have enjoyed a common labour market since the 1950s. The EEA Agreement creates a common market between the five Nordic countries, which is an asset for foreign businessmen and investors. Remember - the Nordic countries are very much alike in terms of culture, legislation, government - and we all speak basically the same language. By doing business with Norwegian companies and by investing in Norway, you will find that this country is a bridgehead for your way to other Nordic countries, but also to the North Sea offshore market and to Russia, the Baltic countries and the Central and Eastern European countries.

All this leads in my opinion to one conclusion: Norway is an interesting business partner.

Let me elaborate somewhat:

Norway is a modern industrialized and high tech nation with strong democratic traditions, a stable government, high level of education - and a large Nordic home-market.

• We have an open and highly internationalized economy with large sections of the industry oriented towards exports.
• We have the fourth largest merchant fleet in the world and a maritime industry including shipping, shipbuilding, manufacture of ship equipment and an array of maritime services.
• Our oil production has reached almost 3 million barrels a day, making us the second largest oil exporter in the world.
• The Norwegian economy is very sound, and is currently experiencing a sharp rise in production and demand.
• Total GDP for 1995 will be 4,5 percent. Price inflation is low, some 1,4 percent last year. Norwegian manufacturing industry is increasing their export market shares.

We foresee private sector investments to pick up. Let me add that foreign investments in Norway amount to about 13,5 percent of GDP.

So, the economic outlook for Norway is indeed favourable. If we had joined the European Union, Norway would today have been the only country besides Germany and Luxembourg to qualify for the third stage of economic and monetary union.

One sector of our economy deserves particular attention, namely the Norwegian offshore petroleum sector, which is one of the most important industries of the economy. The actual crude oil production represents about 4 percent of the world's total oil production and implies that Norway will probably become the 6th largest producer next year.

Norway is furthermore a major gas supplier to Western Europe and covers about 10 percent of its total consumption of natural gas. I hope that Italy will also become an important market for Norwegian gas supplies.

Norway is the only country in the world where virtually all of the electricity is based on hydropower. Norwegian companies have achieved world-leadership in planning, projecting and constructing hydropower stations and high-voltage grids.

Working in stone is something also Norwegians know something about, our mountains forced us to become experts in the construction of tunnels and other sub-soil constructions. We are also the largest exporter of metals in Western Europe.

The Norwegian fisheries and seafood processing industries are an important part of the Norwegian economy, and fish is dominant in our export to Italy. Stockfish (Stoccafisso), fresh salomon and dry fish (baccala) are the most important items. As a matter of fact we have exported stoccafisso and baccala to you since the Middel Ages and you are experts in serving delicious dishes from this. But other fish products may be of interest too, and I think Italian and Norwegian parties should look into ways and means of developing further the traditional products of "stoccafisso" and "baccala", as well as packaging and distribution to the consumer.

Let us use the "ITALY-NORWAY Forum" as a stepping stone on the way to obtaining a better knowledge of each others markets. We think that what we have to offer may respond to business opportunities that you are looking for. So let us start on the journey of combining the talents of each of our countries to expand existing businesses and locate new areas. The inspiration we have should make it possible to write a new chapter in our common history.

Finally, let me extend my thanks and that of my delegation to the efficient organizers, the Istituto Nazionale per il Commercio Estero, who on behalf of the Ministry of Foreign Trade has done a great job and made this event possible.