[Herald Interview] Norway shows way to thrive outside European Union

When Norway voted for the second time not to join the European Union through a referendum in 1994, the country had just brokered the Oslo peace agreement between the Israelis and Palestinians and hosted the Winter Olympics in Lillehammer.

Confidence was in the air, recalled Norwegian Ambassador to Korea Jan Grevstad.

Norway, an affluent, benevolent and confident country always “on the doorstep” of the EU, but adroitly outside, had since moved on without regrets, the envoy said in an interview.

“The Brits are leaving the EU because they are confident,” he added.

As nations around the world increasingly re-embrace Westphalian sovereignty after years of hyper-globalization and trade liberalization, Norway’s unique path of development balancing global integration and national self-preservation has been scoped with much envy, buoyed by Britain’s vote to quit the EU.

For starters, Norway is part of the European Free Trade Association and European Economic Area, enjoying the benefits of the single market by embracing its “four freedoms” of the movement of persons, goods, services and capital. The EEA was established on Jan. 1, 1994 through the EEA Agreement, which stipulates that its membership is open to member states of both the EU and EFTA. EFTA states adopt most EU legislations concerning the single market.

Norway’s relationship with EU will be different from that of Britain, which has decided to forgo access to the single market in favor of the ability to control free movement of people and formulate laws independently, among other issues.

“There are no objective answers as to why we decided not to be part of the EU, but the most significant reason was to protect our agriculture and fishery industries,” the envoy explained, adding that Norway has bilateral agreements with the EU in these sectors.

As Norway is highly dependent on the agricultural sector, which receives substantial state subsidies, protecting the vital sources of food and revenue was existentially important, he noted. 

Norway has a long swathe of territory, stretching from the Arctic to its southern tip facing Denmark -- where various produce is farmed. The distance is roughly equal to that between Oslo and southern Italy. It is also the world’s second-largest exporter of seafood after China, fishing from the Barents Sea in the north to the North Sea in the south. 

“The majority of people also didn’t want our sovereignty to be transferred to the EU headquarters in Brussels, a decisive factor in our decision,” the diplomat who spent most of his career on European affairs said.

“We are part of the internal market with four freedoms, and abide by relevant EU directives, but not part of its decision-making process. We enjoy autonomy in foreign affairs, defense, immigration from outside EU, agriculture, fisheries, justice and home affairs, and are not bound by all the rules of EU.”

The Scandinavian country is part of the Schengen Area, a zone comprising 26 European states that have abolished passport and border control at their mutual borders to facilitate free movement. It is also a member of the North Atlantic Treaty Organization, but has maintained a “constructive relationship” with Russia, the transatlantic security alliance’s main adversary, the ambassador claimed.

On Norway’s economic strengths, Grevstad, among other aspects, pointed to the tripartite arrangement between employees, employers and the government, who work together to find solutions.

“The labor union members are responsible and flexible at the same time,” he argued. “They demand wage increases based on realism and a sound understanding of the market situation.”

Militant labor unions are a thing of the past, he continued, saying they used to exist in Norway as in other socialistic societies. Norway’s Government Pension Fund Global operates from the country’s petroleum income, and is the world’s largest national investment fund, holding 0.8 percent of global equity shares and 2.33 percent of European stocks, the diplomat added.

As other fortitudes of the Norwegian economy, Grevstad mentioned its highly educated workforce, egalitarian society and social mobility that allow individuals to make decisions autonomously. As opposed to asking the boss for approval, Norwegians try to find solutions on their own and implement them where possible, he said.

“This makes them highly productive, creative and confident. The excessive hierarchy in most Asian societies eats away so much productivity by not unleashing the creative potential of individuals.”

According to the World Bank, Norway is the sixth-best economy in the world in terms of ease of doing business, backed by a strong government, labor force, infrastructure, high expenditure on research and development and a vibrant startup ecosystem.

Bilateral commerce with Korea is bolstered by the EFTA-Korea free trade agreement that entered into force in 2006. Korea is Norway’s fourth-largest trade partner overall and second-largest in Asia, after China. Two-way trade topped $4.9 billion in 2015 and $2.9 billion last year, with Norway importing from Korea electronics, cars, telecommunications equipment and parts for oil platforms and the marine industry, and Korea importing marine equipment, scientific equipment and seafood.

Norway derives 95 percent of its energy from hydropower, 2 percent from thermal power, 1 percent from wind power and the remaining 2 percent from fossil fuels. As Norway exports most of its oil and natural gas, it is committed to the United Nations-led Paris climate agreement, having vowed to cut its greenhouse gas emissions by at least 40 percent of its 1990s-level by 2030.

Possibilities for cooperation with Korea lie in climate mitigation, sustainable development, Arctic research, clean energy and smart city development, according to the envoy.

As part of the Sustainable Development Goals, Oslo has striven to eradicate poverty, enhance gender equality and provide health care and education to those in need around the world, he said.

Oslo recently announced its plan to offer $2.9 million in humanitarian aid to North Korea through the Norwegian Red Cross and World Food Program. The assistance, covering medical care, nutrition, water and hygiene, will be delivered to areas devastated by floods in recent months.

“We have given humanitarian aid to North Koreans regardless of the kind of government they have,” Grevstad stressed, adding “people shouldn’t be punished for their leaders.” Oslo each year spends more than 1.11 percent of its annual gross national income on official development assistance, and has operated humanitarian programs in the communist country for more than 20 years, offering $1.75 million annually.

To help curb Pyongyang’s nuclear and missile development program, Norway is also implementing United Nations Security Council Resolutions 2270 and 2321, which were adopted into domestic laws, according to the envoy.

By Joel Lee (joel@heraldcorp.com)