Mr. Bjørn Tore Godal
Norwegian Minister of Foreign Affairs

ADDRESS TO THE NORWEGIAN AMERICAN CHAMBER OF COMMERCE, SAN FRANCISCO, 2 APRIL 1997

Norway: A European Partner

Your Royal Highness,
Ladies and Gentlemen,
Thank you very much for your kind invitation to address the Norwegian American Chamber of Commerce here in this beautiful city of San Francisco. It is particularly fitting that we should meet at the World Trade Center, here on the very shore where so many Norwegian ships have docked.

It is very encouraging to learn that there are so many Norwegian-related groups and clubs that are active in the Bay Area, such as the lodges of the Sons of Norway and the Daughters of Norway. (I met with former District President Mr. Karl Eikeberg here today). The fishing club ( Den norske Fiskeklub) and its "Rex Sole", Mr. Morkemo, has long been renowned, and will probably be even more so after the recent publication of the very interesting new book about its history.

Earlier today I visited the Seamen's Church and was impressed by all the activities going on there. I spent last night at Norway House, which was a gift to Norwegian sailors during the war.

I have also been informed that there is an active Norsemen's Federation ( Nordmannsforbund) here in the Bay Area, as well as a War Veterans' Union ( Norsk Krigsseilerforening) with about thirty members. And, last but not least, there is your own organization. We truly appreciate the work being done by the Norwegian American Chamber of Commerce and its valuable contribution to the promotion of bilateral trade and Norwegian interests in general.

Let me compliment the Chamber of Commerce and all the various Norwegian-related associations on the important work you are doing for Norway and your numerous constituencies. I have been told that in the Bay Area alone, there are some 6,000-8,000 first-generation Norwegians, and probably somewhere between 30,000 and 40,000 if we include second and third generation Norwegians. It is incredible that as many as 400,000 people in the state of California may be of Norwegian descent.

Of course, the climate here is very attractive, and the weather has always been important to Norwegians. You may have heard of the Norwegian who was all set to emigrate to America, but when the day of departure came, it was raining cats and dogs. He decided to stay home, because, as he said: "I'm not leaving for America on a filthy day like this." In the end he never left at all.

On a more serious note, I would like to take this opportunity to give you a brief presentation of Norway's role as a European partner. In such a presentation it may be useful to start with Norway's unique geographical and geopolitical position at the intersection between Europe, the Atlantic and Russia. This position is basic to Norway's international orientation.

As a founding member of NATO, we have worked and continue to work together with the United States, inside and outside the Alliance, for our common defense and for peace and stability in the Euro-Atlantic region. The transatlantic link has always been of enormous importance to us.

Although we are not a member of the European Union, we have also taken an active part in the development of European cooperation. Nordic cooperation continues to be important to us, and in recent years we have made a determined effort to promote cooperation between regions that were divided by the Cold War, for instance the Barents Region. This consists of Northwest Russia and the northernmost counties of Norway, Finland and Sweden.

As the only NATO country sharing a border with Russia, we feel that regional cooperation is one of the ways in which we can contribute significantly to the integration of Russia into broader European cooperative structures. We are acutely aware of the crucial importance of this endeavor if we are to succeed in creating a new security order in our part of the world. This was the topic of my address to the World Affairs Council in Los Angeles last night.

Tonight, I will concentrate the remainder of my remarks on the economic field. And I invite you to imagine a country with strong growth in production and employment, low inflation and healthy surpluses in both the public finances and external trade. This is an accurate description of Norway in 1997. The Norwegian economy is currently experiencing strong expansion. The unemployment rate is almost down to 4 per cent. Our per capita GDP is now one of the highest in the world, surpassing even that of the United States.

The growing international division of labor and the ensuing increase in trade have been decisive for the economic growth Norway has experienced since the Second World War. Norway has been, and still is, dependent on extensive trade with other countries. Exports alone account for almost 50 per cent of our GDP, as compared with 10 per cent in the United States.

As you know, Norway is richly endowed with natural resources such as fish, hydropower, forests, minerals and - not least - oil and gas. We have become the second largest exporter of crude oil after Saudi Arabia, and we are a major supplier of natural gas to continental Europe. Our exports of fish and fish products today amount to some 3 billion dollars, which makes them second only to oil.

The petroleum sector accounts for 15 per cent of our GDP, so our economy is not totally dependent on oil and gas. In fact, we have a highly developed and diversified economy with a strong, traditional industrial base. Advanced technology, environmentally friendly production methods, and a highly educated work force are key factors in the success of Norwegian industry.

Norwegian companies also enjoy world-wide recognition in fields such as pharmaceuticals, fertilizers, environmental technology, hydroelectric power and oil-related technologies. And, of course, Norway has ranked as a leading shipping nation since the late 1800s. Today shipping accounts for more than 15 per cent of our exports. Shipping has also stimulated the development of a wide range of related activities, such as ships' gear, classification societies and protection and indemnity insurance. The Norwegian shipping industry has also frequently served as a model for internationalization efforts by other Norwegian business sectors.

However, we must not forget to keep things in their proper perspective. Although Norway ranks as one of the world's leading trading nations in areas such as shipping, oil and natural gas, fish and certain metals industries, our contribution to global trade in goods is less than one per cent, even though for Norway this is the one per cent that counts most.

The European Union is Norway's most important trading partner, and we are the Union's fourth largest trading partner, surpassed only by the US, Japan and Switzerland. As you know, Norway is not a member of the European Union. The economic relations between Norway and the rest of Europe are based on the institutional framework provided by the European Free Trade Association. EFTA's most important task today is the management of the European Economic Area Agreement, to which the EU, Norway, Iceland and Liechtenstein are parties. By virtue of this Agreement, Norway is also an integral part of the EU internal market.

We fully share EC legislation on the free movement of goods, people, services and capital. A separate Surveillance Authority, which has supranational competence, works in parallel with the European Commission in ensuring that the EFTA states adhere to all commitments under the EEA Agreement.

Norway attaches particular importance to the work of the European Commission in order to facilitate the process of adopting internal market legislation. We participate in a number of decision-shaping groups and committees under the Commission, as well as expert and working groups. In this way, Norway and EFTA are able to exert an influence at an early stage in the making of future EC legislation.

The EEA Agreement is a dynamic arrangement. New areas of cooperation are continually being included. In some fields, such as the gas and oil sectors and fisheries, we have wide-ranging interests that have an important bearing on all of Europe. Consequently, Norway will continue to be active in Europe over a broad spectrum, both bilaterally and through the EEA Agreement. Norway's No to membership in the European Union was not a No to close cooperation with the EU.

Since the Central and Eastern European countries are likely to become members of the EU during the next decade, the EEA will also encompass these countries. Norway's trade with Central and Eastern European countries has increased sharply in the 1990s. This trade is currently guided by free trade agreements, which provide Norway with the same market conditions as the EU in the countries concerned. Thus, Norway has a firm basis for trade in the new markets in Europe as well.

The fact that Norway is an integral part of the internal market is important in our relations with other regions of the world, such as North America. The EEA Agreement makes Norway even more interesting to American investors and exporters since it also serves as a bridge to an internal market of more than 370 million people.

In view of the Norwegian economy's dependence on exports and imports, we favor an open trading system. Along with the United States, we were among the founding members of the General Agreement on Tariffs and Trade (GATT) in 1947. We have since participated in all subsequent efforts to strengthen GATT and to open markets all over the world. In addition, we have been staunch supporters of regional efforts aimed at removing trade barriers, both through our membership of EFTA and our participation in the European Economic Area. Because of these arrangements, more than 90 per cent of all goods that enter Norway today are duty-free.

Norway, like the US, has therefore played an active role in the establishment of the World Trade Organization. The WTO sets out the principal contractual obligations determining how governments frame and implement domestic trade legislation and regulations. It has become the platform on which trade relations among countries evolve through collective debate and negotiation. As a common institutional framework for trade relations, the WTO provides the predictability necessary in the global market. It is thus within this organization that the economic relations between the US and Norway can be further deepened.

Outside Europe, the United States is still our principal market and trading partner. As far as shipping and oil are concerned, the US is our most important customer. About 10 per cent of all our exports go to the US and Canada, and in 1996, Norwegian exports to North America increased by 20 per cent. The bulk of our exports to the US consist of oil, gas, metals and fish, accounting for a total of 2 billion dollars a year. In comparison, Norway ranks forty-ninth as a recipient of US exports. Here cars and computers are major articles. Our two-way trade is basically in balance. US investments in Norway amount to about 4 billion dollars, by far the largest share of foreign investment in Norway.

There is room for expansion in our bilateral trade. We hope that improved coordination of the promotional activities of all public and semi-public Norwegian institutions will contribute to this. The few areas of disagreement between Norway and the United States should not be allowed to obscure the broader picture of excellent relations. Norway has been critical of US policy in two respects. One of these is in the area of maritime transport. Because of the importance of the shipping industry to our country, Norway has advocated the establishment of multilateral rules by the WTO. The absence of US involvement here is hindering progress.

The other area in which we have consistently voiced concern involves US implementation of "anti-dumping" rules. US legislation and practice in this area have allowed domestic industries to be protected from imports. US "anti-dumping" rules have hit one of our products particularly hard: Norwegian fresh salmon. Following claims of unfair competition by a handful of US salmon farmers in 1989, the US government imposed tariffs on salmon imports of up to 30 per cent. These duties have effectively closed the US market to fresh and chilled Norwegian salmon. Our annual exports have fallen from 13,000 metric tons to less than 200 tons. In other words, a very effective and, in our view, protectionist measure.

I know that anti-protectionist feeling is strong in this part of the United States, and for good reason. In this city, I have been told, close to one in five jobs is linked to international trade. As the leading American exporting state, California, like Norway, has a great deal at stake as far as free trade is concerned. On this point, we definitely agree.

That is, of course, not the only reason why Norwegians find California so intriguing. We realize that California influences our own life style and shapes our future in many ways. California, particularly the Bay Area, is the uncontested world leader in the constantly evolving multimedia industry. This is not just about making money, it is also about disseminating cultural and human values. And both of these undertakings seem to be fairly successful. You are in the forefront of a revolutionary transition to an information and knowledge-based economy. Very little technical insight is required to recognize the enormous impact of this revolution on all societies, including our own.

In many ways California offers us a glimpse of our own future. I hope you will not infer from this that Norway offers more of a look into the past. Although a number of Americans of Norwegian descent may have a somewhat romantic and not totally up-to-date notion of the country of their forefathers, I hope my address here today will leave you with the impression that Norway is indeed keeping up with the times.

In some areas we are even in the forefront. Some of you may have observed prototypes of a Norwegian electric vehicle, the "City Bee", on Californian roads, where they point the way in efficient, non-polluting urban transport. Like the Norwegian car makers, I am encouraged by the environmental awareness of Californians and their receptivity to "green values".

And this is one of the most pressing challenges of our time - ensuring sustainable development, so that the needs of present and future generations can be met in ways that are in harmony with nature. It is a clear sign of progress when so many people realize the importance of making the right technology choices and the environmental impact these choices have.

Increased investment and cooperation in developing environmentally friendly technologies and disseminating them are among the most important contributions to sustainable development. Seizing such business opportunities is an exciting area of expansion in international trade and cooperation.

This is an area where Norway has a lot to offer, and it underscores the main point of my message today: Norway is an interesting European partner, both now and in the future. I hope that many of you will have the opportunity to experience this for yourselves.