What type of categorization of international trade barriers apply to the case of Armenia and Norway?

Introduction

During the last five years, the trade between Armenia and Norway has been increasing. Although the tendency is more evident in the exports from Norway to Armenia, there are perspectives of increasing export rates from Armenia to Norway (MFA, 2024), considering the trade interest of the Norwegian government with developing countries and initiatives of the Government of Armenia to expand its export capacities (Regjeringen, 2024). The exporting products from both countries are mainly consistent, and the vast majority of the exporting products are non-knitted cloth accessories (from Armenia) and fish products (from Norway).  However, there is no uniform understanding and standardization of trade barriers and perspectives by the private sector, which would promote and diversify the export rates from Armenia to Norway. This research is a part of the “Armenia-Scandinavia Trade” research project and will focus on the following domains of trade from Armenia to Norway: The existing settings and environment of the relations. This implies exploration of political conditions, international agreements and participation in international organizations. The overview of non-tariff barriers, non-tariff measures and technical barriers to trade relevant to Iceland. Application of such conditionalities to the Armenian private sector. Prospects of trade development are based on the increased cooperation in the private sector with policy facilitation and complementary activity of the public sector.

International Agreements and Participation in Common Organizations

Armenia and Norway are members of several international organizations that influence global trade. Both countries are part of the United Nations and several of its specialized agencies, such as the United Nations Development Programme (UNDP) and the World Health Organization (WHO). However, unlike regional organizations that might focus on trade facilitation, these memberships largely address broader humanitarian and developmental issues.

Armenia is also involved in regional organizations like the Eurasian Economic Union (EAEU) and the Black Sea Economic Cooperation (BSEC), which offer trade facilitation within their respective regions. Norway’s engagement in organizations like the European Free Trade Association (EFTA) and the Schengen Area reflects its integration into European economic frameworks.

Implications for Trade

The contrast between the universal nature of the organizations Armenia and Norway are part of, and the regional focus of Armenia's memberships, suggests that trade facilitation might be more effective within specialized regional frameworks. For Armenian businesses, especially small and medium-sized enterprises (SMEs), regional organizations offer more practical support for navigating transnational trade.

Non-Tariff Measures (NTMs)

NTMs are government actions that impact global trade by imposing regulations related to safety, health, and environmental standards. For Armenia, the challenge lies in adapting to Norwegian standards, which are often aligned with stringent European regulations. Clear channels of information and support for Armenian businesses are crucial for meeting these standards and facilitating smoother trade operations.

Non-Tariff Barriers (NTBs)

While Norway maintains few direct NTBs, it imposes various regulatory standards and compliance requirements, particularly in the agricultural sector. These regulations can present significant challenges for Armenian exporters who are less familiar with Norwegian and broader European market standards. Despite Norway's adherence to World Trade Organization (WTO) rules, the complexity and cost of meeting these standards can act as barriers to trade.

Technical Barriers to Trade (TBTs)

Norway follows European Economic Area (EEA) regulations, which include technical standards and certifications. Products imported into Norway must comply with EEA standards and carry the CE marking to demonstrate compliance with health, safety, and environmental requirements. For Armenian exporters, particularly those in sectors like technology and agriculture, navigating these technical requirements poses a challenge due to a lack of experience and support.

Prospects for Trade Development & Private Sector Engagement

Improving trade relations between Armenia and Norway will require a concerted effort to engage the private sector more effectively. The Armenian government needs to implement targeted initiatives to support SMEs in navigating foreign market regulations and accessing new markets. Centralized support mechanisms, including clearer guidelines and assistance with regulatory compliance, are essential for overcoming existing barriers.

Government Initiatives

Armenia could benefit from developing more focused government-supported initiatives aimed at enhancing trade relations with Norway. This includes establishing better communication channels between the public and private sectors, providing information on NTMs and TBTs, and facilitating market entry procedures. Additionally, Armenia's participation in regional trade organizations could be leveraged to build stronger trade relations with Norway.

Market Opportunities

Norway's advanced economy and technological capabilities offer potential opportunities for Armenian businesses, particularly in sectors like IT and technology. By improving regulatory knowledge and standardizing business practices, Armenian enterprises could better position themselves to take advantage of these opportunities. Furthermore, Norway’s emphasis on sustainability and environmental standards may align with Armenia’s emerging sectors, such as renewable energy.

Conclusion

The research underscores that the persistent low trade volume between Armenia and Norway is not due to significant formal barriers but rather a combination of market engagement challenges and regulatory adaptation issues. Armenian businesses face difficulties in navigating Norwegian standards, particularly NTMs and TBTs, due to a lack of comprehensive support and experience in international trade.

To enhance trade relations, it is crucial for the Armenian government to provide more targeted support to the private sector, including better information on regulatory compliance and market access. Strengthening cooperation between the public and private sectors will be essential for overcoming these barriers and fostering more robust trade development between Armenia and Norway.