8. NORWAY

8.1 Overview of the economy

The Norwegian economy is a prosperous bastion of welfare capitalism, featuring a combination of free market activity and government intervention. The government controls key areas, such as the vital petroleum sector (through large-scale state enterprises), and extensively subsidizes agriculture, and areas with sparse resources. The extensive welfare system helps propel public sector expenditures to more than 50% of GDP. A major shipping nation, with a high dependence on international trade, Norway is basically an exporter of raw materials and semi-processed goods. The country is richly endowed with natural resources - petroleum, hydropower, fish, forests and minerals - and is highly dependent on its oil production and international oil prices. Only Saudi Arabia exports more oil than Norway. Norway imports more than half its food needs. Norway opted to stay out of the EU by a referendum in November 1994. Growth was a meagre 0.8% in 1999 because of weak private consumption and anaemic investment activity in the oil and other sectors. Growth was expected to pick up in 2000, perhaps to 2.7%.

8.2 Trade policies

Norway is a member of the European Free Trade Area (EFTA), together with Iceland, Liechtenstein and Switzerland. Norway is also a member of the European Economic Area (EEA), which consists of the 15 European Union (EU) Member States and the EFTA countries, with the exception of Switzerland. Although not a member of the EU, Norway has assumed most of the rights and obligations of the EU because of the EEA, including many of the import regulations.

As a member of the EEA, the Norwegian Government follows the EU policy of banning the import of animals, and meat from animals, that have been administered growth hormones. A strong opposition to food products containing genetically modified organisms (GMOs) makes the market for such products difficult, even though there is not yet a specific ban against such products.

The tariff level for import of seafood products in Norway is zero (0%), both on unprocessed and processed seafood.

8.3 Fisheries data

Commodity balance (1998, preliminary)

Gross value of fisheries output (ex-vessel prices) (1997): NOK 9 183 million

8.4 Production

Norway had steadily increasing production from the beginning of the decade to 1998. Mostly the increase has come from farmed salmon and catches of small pelagics, but an increase occurred in catches of almost all species. Farming salmon is a comparatively new industry in Norway. Beginning in the 1980s, the commercial potential was not realized until the 1990s. Other than salmon and small pelagics, groundfish such as cod, hake and saithe have always been important species in Norways fish production. For details see Appendix.

Figure 34. Total production of seafood by Norway, 1990-1999 (quantity; tonnes)

8.5 Exports

In 1998 Norway was the second biggest exporter of fish and fish products when ranked by value, with exports worth US$ 3 660 million for a quantity of 1 700 000 t.

Figure 35. Norwegian seafood exports, 1990-1998

Norway has traditionally exported to its neighbouring Scandinavian countries and the European Union. This is still the main market. However, as one of the largest exporters, many markets are involved and import Norwegian fish products.

Until 1991, USA was a major market for Norwegian salmon, but due to anti-dumping charges and countervailing duties, exports fell and the market lost its significance. Japan, as a big consumer of seafood, is also a big importer of Norwegian seafood. During the 1990s, Eastern Europe emerged as a new big market for Norwegian seafood, as trade liberalized and spending power increased in the region. In addition, EFTA and most of the Eastern European countries, except Russia and Ukraine, entered into trade agreements.

Figure 36. Norwegian seafood exports in 2000, by destination

During the 1990s, exports increased gradually to all the main markets. To important markets such as Brazil, Poland and Republic of Korea, exports showed a significant rise in the period 1994-1995.

Norway’s growth in exports has come through exporting to countries where Norway has preferential treatment agreements. Trade barriers, such as high tariffs, hinder further growth in certain products, but the liberalization in the WTO has had only marginal effects as Norway has bilateral agreements with its main markets.

8.6 Imports

Norwegian imports come mainly from five countries, namely Denmark, Iceland, Peru, Russia and UK. Other countries also contribute to the total, but only on a very small scale. The imports are mainly groundfish, that is re-exported, especially the imports from Russia and Iceland. From Peru, the import is fishmeal for fish feed, primarily for the aquaculture industry.

Figure 37. Total seafood imports by Norway, 1990-1998

8.7 Trade on a commodity basis

8.7.1 Exports

As Norway has for a very long time been able to satisfy its domestic need for fish and fish products, all increased production goes to export. In 1998, Norway exported 173 830 t, worth US$ 3 000 million, making it the largest exporter in quantity, and second in value, on a global basis. Most of Norway’s export is fresh and frozen fish, both in quantity and value. A large part of the value derives from salted, dried or smoked fish. The most valuable species are salmon and cod.

8.7.2 Imports

As the import regime in Norway is very liberal, there is no restriction on imports of fish and fish products. But, as mentioned earlier, consumption is well covered by domestic supply. Despite this, Norway still imports fresh and frozen fish, and meals and oils. The meals and oils are often used as fish feed for farmed salmon. Imports also further increased during the 1990s, as Norway increased its own exports, and most of the imported fresh and frozen fish are for re-export.

The main suppliers were Denmark, Faeroe Islands, Iceland, Peru, Russian Federation and the United Kingdom.

Figure 38. Overview of Norway’s seafood exports, by commodity, 1990-1998

Norway export commodity groups 1990 - 1998 - a

Norway export commodity groups 1990 - 1998 - b

Figure 39. Overview of Norway’s seafood imports, by commodity, 1990-1998

Norway import commodity groups 1990 - 1998 - a

Norway import commodity groups 1990 - 1998 - b