norway’s analysis according to it’s international trade patterns

7/25/2019 Norway’s Analysis According to It’s International Trade Patterns

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Norway’s analysis according toit’s international tradepatterns

Norway, officially theKingdom of Norway, is a sovereign and

unitary monarchy whose territory comprises the western portion of

the Scandinavian Peninsula, Jan Mayen, and the Arctic

archipelago of Svalbard.

(Source:http://en.wikipedia.org/wiki/Norway )

Even though, Norway is not a member state of European Union, it

is a member of European Economic Area, EU being the major

import and export partner of Norway.

Norwayexports mainly:petroleum andpetroleum products,

machinery andequipment,metals,chemicals,ships andfish.

Norway is in the global top 5 exporters of crude oil andapproximately 20% of EU gas comes from Norway and it is also

the EU's main source of primary aluminium.

Machinery andequipment,chemicals,metals andfoodstuffs

are the main categories of goods that areimported.

United Kingdom, Germany, United States and Netherlands are,

both import and export, Norway’s main trading partners. United

Kingdon and Germany are also two of the main EU importers of

Norwegian gas.

Norway exports seafood to about 130 countries all over the world,

Russia being the biggest and the most important single market for

their exports.

1

http://en.wikipedia.org/wiki/Norway

http://en.wikipedia.org/wiki/Norway



Because of the high quality of the sea products, the demand for

Norway’s seafood is getting only bigger with every year, which

means that the future for the fish industry is looking even more

promising.

Source:http://en.wikipedia.org/wiki/Economy_of_Norway#Economic_structure_and_sustained_growth

2

http://en.wikipedia.org/wiki/Economy_of_Norway#Economic_structure_and_sustained_growth








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In 2013, the value of merchandise exports of Norway decreased

slightly by 4.8 percent to reach 153.3 bln US$, while its

merchandise imports increased slightly by 3.1 percent to reach

90.1 bln US$ (Graph 1, Table 2 and Table 3). The merchandisetrade balance recorded a moderate surplus of 63.2 bln US$ (Graph

1).

The largest merchandise trade balance was with MDGDeveloped

Europe at 67.6 bln US$ (Graph 4). Merchandise exports in Norway

were diversified amongst partners; imports were also diversified.

The top 11 partners accounted for 80 percent or more of exports

and 17 partners accounted for 80 percent or more of imports

(Graph 5).

In 2009, the value of exports of services of Norway decreased

substantially by 14.8 percent, reaching 38.6 bln US$, while its

imports of services decreased substantially by 18.1 percent and

reached 36.9 bln US$ (Graph 2).

There was a relatively small trade in services surplus of 1.8 bln

US$.

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Table 1 presents the evolution of the top 10 of Norway’s exportcommodities for 3 years: 2011, 2012 and 2013.

Firstly we can see, petroleum gases and oils are the main export

commodities and a very important sector of activity for Norway.

While export of petroleum oils decreased, the export of petroleum

gases increased. Thus, we can see and upward trend and it more

likely that the growth will continue according to the preliminary

data.

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We can see that the preliminary data assumes an increase in

exports compared with the previous year in September-October

period.

Now let’s take a look at the categories that follow.

Secondly, we see that after the exports of the commodities that are

not specified according to kind, the export of frozen fish increased

a lot, especially between 2012 and 2013.The importance of fish exports is not negligible, because it is an

industry with a great potential due to the high quality Norwegian

products.

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According to the data provided byStatistics Norway, the weekly

exports of frozen salmon are increasing and in the 49th

week of2014 they reached more than 20000 tones in terms of quantity

exported.

Thirdly, as it presented in Table 1, the data shows that the export of

metals, namely aluminium and nickel, is of great importance for

Norway’s economy. Aluminium is intensively exported to European

Union, Norway being the main importer of this metal for EU.

Analyzing the commodities exported it is obvious that Norway

specialized in trade according to it’s natural resources

endowments. Natural resources of fish and petroleum are exploited

and exported because of their abundance.

Having a trade pattern, which is based mainly on the country’s

natural resources, may cause instability because:

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https://www.ssb.no/

https://www.ssb.no/



• Oil prices tend to be volatile, thus the dependence on mainly

oil export may cause instability and recession;

• Metals come in limited quantity and are not renewable, that

means that a country couldn’t exploit such a resourcecontinuously;

• Depending only on your natural resources could mean

sometimes the ignorance for other solutions for the country’s

development.

Because Norway chose to exploit what their country naturally had,

they overlooked the possibility to develop a high tech industry or a

capital-intensive industry.

Oil exports crowded out non-oil exports, and developed a

dependency under which the fiscal policy, the exchange rate, the

export earnings, the output and the employment are threatened in

times of price volatility.

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Source: http://comtrade!norg

1"

http://comtrade.un.org/




Looking at the data above we can make some conclusions about

Norway’s preferences in terms of imports:

• Norway imports a lot of goods that are the results of capital-

intensive industries;

• They export unwrought nickel and then import intermediate

products from nickel, instead of processing the metal by

themselves;

• Norway’s trade balance is positive (Graph4).

After looking at the data on the whole me might say that Norway is

too dependent on the export of it’s natural resources and does too

little do develop high-tech institutions and diversified capital

intensive industries, even so Norway has proved very good at

keeping inflation down to resist overvaluation of the currency. Now

rises the question: for how long? If a period of extreme price

volatility would begin what would be the result?As their fish industry is flourishing and seafood exports are

increasing in importance, Norway could strengthen their

economical stability.

Even if Norway refuses to enter the European Union it is not at all

isolated from trade. It is actively involved in exchange of goods with

EU, Asia and USA and if their abundance of natural resources will

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turn against them or not, is a question to be answered as time will

pass.

Bibliography

http://wwwss#no/en/$orside%&sessionid'9(")5)"754*(+1+9,*--2*,5)*5"6,*5.pldasprod1"0hide$romle$tmen!'tr!elang!agecode'enmen!rootalternatielang!age'tr!e

http://ece!ropae!/trade/policy/co!ntriesandregions/co!ntries/norway/

http://glo#aledgems!ed!/co!ntries/norway/tradestats

http://enwi.ipediaorg/wi.i/*conomyo$Norway*conomicstr!ct!reands!stainedgrowth

http://wwwwtoorg/english/tratope/tpre/tp369ehtm

http://comtrade!norg

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http://www.ssb.no/en/forside;jsessionid=9B0D5D0754EBF1F9AECC2EA5DE506AE5.kpld-as-prod10?hide-from-left-menu=true&language-code=en&menu-root-alternative-language=true



http://ec.europa.eu/trade/policy/countries-and-regions/countries/norway/


http://globaledge.msu.edu/countries/norway/tradestats



http://www.wto.org/english/tratop_e/tpr_e/tp369_e.htm







http://globaledge.msu.edu/countries/norway/tradestats



http://www.wto.org/english/tratop_e/tpr_e/tp369_e.htm


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