Norway’s initial offer in the WTO services (GATS) negotiations of 31 March 2003 (TN/S/O/NOR)

Initial offer to the Services Negotiations, April 2003

The services negotiations in the WTO cover all trade in services between the member countries and are an important part of the Doha Development Agenda in the current round of negotiations. Trade in services was included in the multilateral trade system for the first time in the Uruguay round, which was concluded in 1994.

Services now account for over 60 per cent of the gross global product, and this is the fastest growing sector in the global economy. Norway exports services to a value of about NOK 165 billion, and imports them to a value of NOK 137 million (Statistics Norway, 2001). In addition to this there is the movement of capital in and out of Norway resulting from investment in service industries. Norway pursues an open trade policy with regard to service industries.

1 Norway’s initial offer

Norway presented its initial offer in the current negotiations on trade in services on 31 March 2003. This was in accordance with the time schedule adopted at the ministerial conference in Doha in November 2001.

The Norwegian offer is a response to the requests received from other WTO members. By 31 March 2003 Norway had received requests from 24 countries (Argentina, Australia, Brazil, Canada, Chile, China, Egypt, Hong Kong China, India, Japan, Kenya, Republic of Korea, Malaysia, Mauritius, Mexico, New Zealand, Pakistan, Panama, Peru, Taiwan, Thailand, Turkey, Uruguay and the USA).

In brief, Norway’s initial offer for the services negotiations contains better conditions for:

• Establishment of foreign companies in Norway: For example Norway is offering to remove a number of the conditions for granting concessions from the schedule. Norway is also offering to remove the requirement that half of the founders and members of the committee of representatives of a joint stock company must be resident in Norway.

• Temporary work permits: Norway is offering to extend the duration for work permits granted to employees who are transferred within the same group of companies (intra-corporate transferees) from two to four years. Norway is also offering to extend the coverage of the three-month permit for independent specialists to all services sectors.

• Shipping and other maritime services: Norway is offering better market conditions for foreign providers of maritime transport servicing offshore petroleum and exploration (supply ships), towing and pushing services and transport of containers from abroad on domestic shipping routes (feeder services).

• Energy-related services, including offshore services: Norway is offering better market conditions for foreign service providers for the whole energy services chain, from exploration and drilling to transport, distribution and sales. The offer will for instance give foreign companies the right to supply drilling services, pipeline transportation services and specialised maritime services related to offshore production of oil and gas. The offer also includes trading in energy products and wholesale and retail sale of electricity.

• Financial services: The offer includes an extension of the right to supply insurance for certain products, for example in relation to offshore exploration. The offer includes lifting the monopoly on the Norwegian Central Securities Depository. Furthermore, financial institutions, foreign or national, may, subject to approval, acquire and hold up to 25 per cent of the share capital of commercial banks or financial undertakings when this is part of a strategic alliance agreement.

• Construction services: Norway is offering to remove the requirement that building contractors and supervisors in charge of the work must be resident in Norway.

• Distribution services: The offer includes several improvements, for instance new commitments for wholesale trade services in alcoholic beverages, fish and grain. Norway is also offering to remove the requirement of two years’ prior residence in Norway for the manager of the branch of a foreign company and for the majority of the board members.

• Environmental services: Norway is offering to lift the monopoly on certain categories of waste management services and on control services for exhaust gas from cars and trucks.

The initial offer also includes technical adjustments that do not involve improvements in specific commitments.

Norway has not offered improved commitments in sectors where it has already undertaken comprehensive commitments. These include:

• Most business services. Only minor adjustments have been made, but these include the right of non-Norwegian nationals to supply personnel services, to operate conferences and trade fairs and to supply business services related to the energy sector.

• Telecommunications services

• Education services

• Tourism and travel-related services

• News agency services

Norway will continue bilateral negotiations with other countries. These negotiations may result in new offers or withdrawal of offers.

2 Guide to reading Norway’s initial offer

Norway’s initial offer is an updated revision of Norway’s schedule of specific commitments. The GATS requires that members include in their schedules all limitations on market access and national treatment in the various areas where they have chosen to undertake commitments. In addition members may include additional commitments. They may also refrain from including commitments for an entire services sector or any part of such a sector in the schedule of specific commitments.

The following is a brief guide to some of the key terms used in the schedules of specific commitments.

• Market access refers to the terms and conditions under which foreign service providers are allowed access to a national market. Market access may be restricted, for example by limiting the number of concessions in a particular area, e.g. by limiting the number of shipowners or restricting the right to register a ship in a national ship register.

• National treatment means that foreign service suppliers are entitled to the same treatment as domestic service suppliers. Conditions that put foreign service suppliers at a competitive disadvantage, such as discriminatory taxation of foreign shipowners or nationality requirements for company management, must be included in the schedule as limitations on national treatment.

• Additional commitments are commitments by a country with respect to measures affecting trade in services that are not subject to scheduling under market access or national treatment. For example, Norway has certain additional commitments in the maritime transport sector, which guarantee international maritime transport suppliers access to certain port services on non-discriminatory terms and conditions.

In their national schedules, WTO members schedule their commitments according to four modes of supply that reflect different ways of supplying a service:

1. Cross-border supply, i.e. the service is supplied directly from abroad, for example when foreign ships transport goods from abroad to Norway

2. Consumption abroad, i.e. the service is delivered and consumed abroad, for example when a foreign company supplies maritime transport services that are carried out between third countries for Norwegian customers

3. Commercial presence, i.e. when the service is supplied in Norway from a local branch, agency or wholly-owned subsidiary of a foreign supplier. Rules concerning the purchase or lease of real estate are also considered to come under this category.

4. Temporary presence of natural persons, i.e. when a foreign national supplies services in Norway on the basis of a temporary work permit. This only applies to persons who have been hired before they enter the country.