„It is important to ensure that trade in goods between Norway and the United Kingdom can continue after 1 January under the same conditions as today. This temporary agreement will protect our interests as we continue our negotiations for a free trade agreement as soon as possible. After the EU, the UK is our largest trading partner and our two countries agree on the need to maintain close and comprehensive cooperation,“ said Foreign Minister Ine Eriksen Seride. The agreement covers trade in goods and ensures that 95% of merchandise trade with Norway and more than 90% with Iceland remain duty-free, giving companies confidence that they will be able to continue working under the same conditions as they are today, when the transition period ends. If no agreement is reached with the EU by the end of the year, when the transition period ends, Britain will not violate World Trade Organization (WTO) rules. These rules, including high tariffs, would have caused serious headaches for trade between the UK and Norway. In addition, the United Kingdom has agreed with EEA-EFTA states on a number of measures to ensure that trade in services can continue as well as possible before a comprehensive trade agreement enters into force in 2021. The UK`s withdrawal from the EEA agreement will have an impact on UK companies acting on value added in Norway without having a business space. From the outset, these companies must be registered with a representative in the VAT register.
This requirement does not apply to companies in EEA states when they have entered into an information exchange and assistance agreement for VAT collection with Norway. If such a company nevertheless elects a representative, the requirement of joint and several liability of the representative, which is otherwise in force, does not apply. At the end of the transitional period, this exemption will no longer apply to British companies and they will therefore have to appoint a representative who, together with the British company, will be jointly responsible for VAT. This has allowed for the smooth flow of trade with the United Kingdom, which is one of Norway`s main trading partners in several key industries. For example, much of Norway`s North Sea gas production is transported to the United Kingdom. Discussions on a comprehensive and sustainable free trade agreement are still ongoing, the ministry added. The UK signed a trade agreement with Iceland and Norway on 2 April 2019. The agreement was signed to maintain continued trade and was part of preparations for a possible „no deal“ Brexit.