The Confederation of Norwegian Enterprise (NHO) believes that Norwegian companies must prepare for chaos when the post-Brexit transitional agreements expire after New Year.
Last week, news bureau NTB wrote that Norway and the UK would not have a new Free Trade Agreement (FTA) ready in time for it to come into force when the post-Brexit transitional arrangements expire on January 1.
If so, Norway will have to resort to emergency solutions after the New Year.
Norwegian companies need to prepare for very difficult conditions, Tore Myhre, director of international affairs at NHO, warned.
“We now see that there will be a radically new situation starting on January 1,” Myhre told NTB.
He fears both cross-border chaos and the impact of a “no-deal” scenario on the service sector.
Norway and the UK already have an emergency agreement in place. It was presented in March 2019 as an insurance policy if the UK left the EU without a deal on the transitional arrangements currently in place, which apply throughout the year.
The hope now is that the emergency agreement can be activated. The agreement mainly covers wholesale and retail trade. It ensures, among other things, zero customs duties on industrial goods.
“It is important that the government has a transitional arrangement that prevents the introduction of customs duties,” Myhre warned.
“But at the same time, companies must be aware that we will not have an agreement in almost all other areas.”
Concerns about the service sector
It is now also clear that a new free trade agreement between Norway and the UK is unlikely to go very far in when it comes to services, as the UK government strongly opposes the free flow of labor across borders.
“We see that even with an agreement, we will have a very bad regulatory framework, especially for services,” Myhre added, pointing out that trade in services with the UK is bigger than retail trade – if oil and gas are kept out of the equation.
“Trade will continue, but companies must prepare for the fact that there will be completely different rules and procedures. Things will take longer and cost more.”
Offshore and shipyards
Knut L. Baumann, head of the NHO Norsk Industri, believes that the new regime will significantly affect shipyards and the offshore industry.
“There is a large exchange of personnel across the North Sea. It can be related to the installation of technical equipment, repairs, maintenance, and engineering services,” Baumann told NTB.
He believes that this exchange has been going smoothly within the EEA framework.
“It was as simple as getting on the plane and flying over. That will not be the case when the free trade in services and people ceases,” Baumann said.
“We are concerned about the situation. It doesn’t look very promising.”
Fear of huge queues
Another concern is the situation surrounding the UK’s borders.
Myhre referred to a British analysis, which concluded that the worst-case scenario could mean that thousands of lorries would queue up and wait for several days in major ports such as Dover.
“We must expect chaos at the border almost regardless of whether the EU and the UK reach an agreement,” Myhre told NTB.
© NTB Scanpix / #Norway Today