A High-Stakes Fight Is Brewing in Norway Over EU Relations

(Bloomberg) -- Kicking off the year in a T-shirt proclaiming that she “loves, loves the EEA,” Foreign Minister Ine Eriksen Soreide hinted at the high-stakes fight that’s brewing in Norway over its relationship with the European Union.

Soreide’s show of passion comes 25 years after Norway linked itself to the EU in a free-trade deal as part of the European Economic Area, a compromise solution after voters in a referendum rejected joining the bloc.

But the deal that gives Norway unfettered access to Europe’s massive free-trade bloc is increasingly being derided and has come under legal attack from EU skeptics and labor unions who are questioning its impact on wages, labor laws and sovereignty. As of yet, it’s a faint echo of the Brexit process that’s currently tearing at the fabric of the U.K.

“It’s very important that we -- supporters of the EEA agreement -- are out there defending it, and tell how enormously important it’s to safeguard Norwegian interests,” Soreide said in an interview in Oslo.

Union ‘Unease’

While securing access to the EU’s inner market and free movement for Norwegians, the deal also forces the country to accept a free flow of workers and to adopt many EU laws it has little influence over. Norway has kept agriculture and fisheries outside of the deal, and isn’t a member of the customs union.

A series of labor disputes, and a contentious decision in parliament last year to join the Agency for the Cooperation of Energy Regulators, has stoked opposition. A Supreme Court ruling enforcing local laws on travel and lodging expenses for foreign workers was also appealed to the EFTA Surveillance Authority, the EEA’s enforcement arm, sparking further anger among labor unions.

LO, Norway’s main union umbrella group, could come under pressure to withdraw its support for the EEA accord ahead of the next election. The confederation convenes its upper decision body every four years, with the next meeting planned for 2021. A shift in the EEA question would be a seismic event that would dominate the general election that year.

LO leaders are so far choosing their words carefully, but President Hans-Christian Gabrielsen acknowledges that there’s some “unease” in the labor movement. This is “first and foremost related to the consequences of social dumping and hiring of foreign labor,” he said.

Gambling With Accord

The debate is a bit more lively in the grassroots. Fagforbundet, the biggest union under the LO umbrella, is arguing that the government and employers are now “gambling” with the EEA by using it against workers.

The union “isn’t against the EEA accord,” said Mette Nord, head of Fagforbundet, in an emailed comment. “But we are demanding that the deal not take precedence over Norwegian collective bargaining agreements, labor laws and ILO conventions.”

A shift by the unions would put pressure on the Labor Party, which will be seeking a return to power in 2021. The party oversaw EEA negotiations after Norway rejected EU membership in 1994, and has since been a strong proponent of the deal.

A Pillar

Anniken Huitfeldt, a Labor Party lawmaker and leader of the foreign affairs and defense committee, said that there are no proposals on the table to step out of the agreement, likening it to Norway’s membership of Nato and a pillar to society.

“The Labor Party won’t change its position on this,” she said. “It’s one of the building blocks.”

But another opposition group, the Center Party, has never been a supporter and is now sensing new allies in its campaign to ditch the EEA.

The accord “intervenes with democracy and overrides labor laws and collective bargaining agreements,” said Sigbjorn Gjelsvik, a Center Party lawmaker and former leader of the association against the EU. The growing revolt among trade unions will lead to a broader debate on Norway’s relations with the EU in the coming years, he said.

Norway’s trade minister, Torbjorn Roe Isaksen, said that the growing EEA resentment among the labor unions could be an illustration that Norwegians may now be taking it for granted.

“If the labor unions, or LO specifically, go against the agreement, that’s a cause of concern,” he said.

©2019 Bloomberg L.P.