OSLO: Norway and the UK must enter into new bilateral trade deals post-Brexit that goes well beyond a traditional agreement given the “profound” economic integration between the two countries, including in the energy sector, the Norwegian government said.
The UK is increasingly dependent on gas imports from Norway, with pipeline gas supplies in January hitting a new record high, and both countries have stressed that the UK’s interest in Norwegian gas is set to grow as the UK looks to phase out coal-fired power generation.
The UK is expected to trigger Article 50 — thereby formally notifying its intent to leave the EU — by the end of this month.
Gas exports from Norway to the UK via pipeline in 2016 amounted to 29.9 Bcm (an average of 82 million cu m/d), up from 26.7 Bcm the previous year, according to data from Platts Analytics’ Eclipse Energy.
But since the start of 2017, flows have been averaging a much higher level at 129 million cu m/d, underlining the increasing importance of gas trade between the two countries.
Norway is not an EU member state, but is part of the European Economic Area which allows it to take part in the EU internal market.
“When the UK exits the EU, the EEA agreement will no longer be the basis for trade between Norway and the UK,” it said.
“Norway must enter into new bilateral agreements with the UK when the country leaves the internal market and the EEA,” it said.
“The scope of our trade, but also more profound economic integration with the UK, suggests that future agreements must be far more comprehensive than the provisions of the World Trade Organization or a traditional trade agreement.”
The government also said it would take time before new permanent agreements can come into force.
“Any transitional arrangements will therefore be important to avoid any undue discrimination and protectionist measures,” it said.
Oslo also urged the UK and EU to allow it a place at the negotiating table.
