Norway Wants EU Assurances It Won't Be Forgotten in Trade Wars

(Bloomberg) -- Norway is fighting to ensure it’s not forgotten in a potential trade war between the European Union and the U.S.

Sitting outside the EU, Norway isn’t part of the exemptions given to the bloc that were recently extended to end of June. And while Norway is trying to reach a deal with the U.S., the bigger risk now is that the EU raises its own walls to protect itself.

Norway Wants EU Assurances It Won't Be Forgotten in Trade Wars

Norway is trying to ensure it “isn’t part of eventual protective measures to protect the EU market against an overflow of steel and aluminum that’s redirected from the American market,” Foreign Minister Ine Eriksen Soreide said in an interview in Oslo on Thursday.

Eriksen emphasizes that U.S. steel and aluminum exports make up only 0.2 percent of the nation’s total sales abroad, while exports to the EU constitute a 65 percent share. Being part of the European Economic Area offers no immunity, so far.

“We argue that we’re not a regular third country because of the EEA agreement,” she said. “We have a free trade agreement that gives us access to the inner market and we also adopt all the regulations as well.”

Trump left the world guessing this week as he extended temporary tariff exemptions for key allies, giving the EU, Canada and Mexico another 30 days to try to hammer out a permanent deal.

On a broader level, Norway is concerned over the fate of its $1 trillion wealth fund, which invests the country’s oil riches abroad. The trade turmoil adds to risks for the global markets and the worst possible outcome would be a breakdown of the rules-based system that’s the backbone of world’s economies.

“We now see that there is much uncertainty in the world economy, stock exchanges are much more volatile, and that could also create challenges for the sovereign wealth fund,” she said.

Norway Wants EU Assurances It Won't Be Forgotten in Trade Wars

The country is also an outsider -- with much at stake -- when it comes to the U.K.’s negotiations to leave the EU. Eriksen said she would very much like to see “an orderly Brexit” and that recent developments with a transition agreement have “been quite uplifting but there are still many issues that remain.”

Norway will also need to act fast once Britain leaves to ensure that the steady flow of gas to the U.K. market continues. The Nordic nation sends 20 percent of its exports and about $5 billion worth of gas each year to the U.K.

“We’re not afraid that there will be no agreement between Norway and the U.K,” Eriksen said. “On the contrary, we’re working hard to get out an outline on all the agreements that we have, which ones need to be renegotiated, where we need a new agreement.”

“The gas supplies from Norway to the U.K. will be as stable and predictable as they have been,” she said.

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