New free trade agreement: Better trade terms and a commitment to combat illegal logging

‘Free trade agreements mean increased exports for Norwegian companies and help to secure jobs all across Norway. The agreement with Mercosur also has provisions on trade and sustainable development, such as climate change, environmental protections and labour rights. A main concern for Norway was to achieve a commitment to combat illegal logging. I am satisfied with the results in these negotiations,’ says Norwegian Minister of Trade and Industry Torbjørn Røe Isaksen.

The Government views the current situation in the Amazon with great concern. The agreement contains important commitments on trade and sustainable development that support the Parties´ international obligations regarding the environment, climate and labour rights. This has been a priority for Norway. For the first time in a free trade agreement, we have also included a provision on trade and sustainable agriculture. The agreement also contains a mutual commitment to implement the Paris Agreement.

Furthermore, the agreement does not increase market access for imports of beef or soy into Norway.

‘Sustainable forest management has been an important area in the negotiations. In addition to recognising the importance of conservation and the sustainable management of forests, the parties undertake to combat illegal logging, thereby supporting the Norwegian desire for sustainable management of the Amazon,’ says Mr. Røe Isaksen.

‘The trade agreement establishes regular contact between EFTA and Mercosur in order to monitor the implementation of the agreement,’ he adds. ‘That gives us an important platform to discuss the agreement’s provisions on trade and sustainable development, including sustainable agriculture and forest management and the commitment to combat illegal logging.’

After ten rounds of negotiations, EFTA and Mercosur have reached agreement in substance. Certain minor issues remain to be resolved in the near future. The draft agreement will be subject to a legal review before the draft is signed and submitted to the Norwegian parliament - the Storting - for ratification.

Earlier this summer, the European Union signed an agreement with Mercosur. That agreement now awaits ratification in the EU countries.

‘For the seafood industry, the free trade agreement means an elimination of customs’ duties after dismantling periods, and a reduction in sanitary and phytosanitary requirements on seafood exports to Mercosur. I hope the agreement will open the door for trade in new seafood products, such as Norwegian salmon, to the South American market,’ says Norway’s Minister of Fisheries, Harald T. Nesvik.

Major markets

Brazil, Argentina, Uruguay and Paraguay, with a combined population of 260 million people, are important markets for Norway. Brazil is our largest trading partner in Latin America, where a wide variety of Norwegian companies do business. Norwegian companies have also shown increased interest in Argentina.

99.2 per cent of all Norwegian exports of industrial products and seafood to the Mercosur countries will, after dismantling periods, become duty-free due to the new agreement.

This will be the largest free trade agreement EFTA has signed and will open up a major market for Norwegian business and industry.

Important for shipping

The agreement will facilitate increased trade in services and higher Norwegian investments with Mercosur. Under the agreement, Norwegian companies investing in sectors such as manufacturing and aquaculture will be treated on the same basis as domestic companies, such as for example in Brazil.

The Mercosur countries are important markets for the Norwegian shipping industry. The agreement provides market access and equal treatment for a wide range of maritime services. It also requires Mercosur to remove certain trade barriers unilaterally.

‘I am happy that Brazil, our most important South American market, has agreed to opening up its market for Norwegian maritime transport,’ Mr. Røe Isaksen says.

The agreement also safeguards sensitive Norwegian agricultural interests by granting only minor tariff reductions and quota increases to Mercosur for certain sensitive agricultural products.

About Mercosur and trade with Norway

• Norwegian goods exports to Mercosur totalled NOK 5.5 billion in 2018. Important export products include seafood, fertilisers, metals, machinery, cables, special vehicles, machine parts and vehicle parts.
• Norwegian service exports to Mercosur totalled approximately NOK 6 billion in 2017. The most important sectors for Norwegian services exports are maritime, oil and gas and renewable energy.
• Over the next 10 years, according to Norwegian calculations, exports to Mercosur could increase by NOK 8.8 billion as a result of the free trade agreement.

EFTA free trade agreements

• Through EFTA, Norway has 29 free trade agreements with 41 countries. The free trade agreement with Mercosur will represent Norway’s 30th through EFTA.
• The EFTA Chairmanship is rotational. Norway holds the Chairmanship in the second half of 2019.
• The EFTA Council is the organisation’s highest governing body, and decisions are taken by consensus.

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