* Norway-China free trade deal seen under threat
* Around 200 Norwegian firms present in China
* Statoil awaiting Chinese OK for $3 bln deal with Sinochem
By Walter Gibbs and Gwladys Fouche
OSLO, Oct 8 (Reuters) - Companies in Norway are vulnerable to potential economic retaliation from China against Friday’s award of the Nobel Peace Prize to a Chinese dissident. [ID:nLDE697143]
China said the decision by the Norwegian Nobel Committee to honour democracy campaigner Liu Xiaobo would hurt relations, and summoned the Norwegian ambassador to protest. [ID:nSGE6970ES]
A China-Norway free-trade agreement currently being negotiated is among the first such bilateral deals considered by China, now the world’s second biggest economy and hungry for the oil, gas and other resources that Norway can provide.
Last year Norway, the world’s fifth biggest oil exporter, sold goods worth 16.1 billion crowns ($2.76 billion) to China and imported roughly twice as much.
“Most likely we will see that the free-trade agreement between Norway and China will be delayed at best, and at worst placed in the freezer,” said Kristian Berg Harpviken, director of the PRIO peace research institute. “It’s obvious the political costs of giving the prize to Liu will be great.”
But some analysts said that China may yet choose restraint.
“China is as much dependent on trade with the West as the West is dependent on China for trade,” said Jan Egeland, head of the Norwegian Institute of Foreign Affairs.
The Nobel Committee is chosen by the Norwegian parliament and broadly reflects the distribution of party power there, with a former prime minister now in charge. But government officials say the committee is fully independent.
“There are no grounds to direct any measures against Norway ... It would have a negative effect on China’s reputation if it did,” Foreign Minister Jonas Gahr Stoere told broadcaster NRK.
With its 1.3 billion people and rapidly growing economy, China is a crucial trading partner for Norway, whose wealth is highly dependent on exports of oil and gas, oil services, fish, fertilisers and metals.
The bilateral free-trade deal would be the first between a European country and China.
Norway’s Statoil (STL.OL), Europe’s second-largest gas exporter, signed a cooperation agreement in June with the Chinese oil company Sinochem, and sold it a 40 percent stake in its Peregrino oil field off Brazil for $3 billion. [ID:nTOE65B00D] [ID:nTOE64K06P] “We are still awaiting approval from Chinese and Brazilian authorities for the Peregrino deal,” Statoil spokesman Baard Glad Pedersen said. Statoil also said it wanted to search for shale gas in China. [ID:nOSN004651]
Norwegian seafood exports to China have surged 50 percent in the past year, and producers have hopes for even faster growth.
Fisheries Minister Lisbeth Berg-Hansen is due in Shanghai next week for a celebration to mark China’s import of its 10 millionth Norwegian salmon since 1988.
“We are of course dependent on China as a market, but the Chinese food processing industry is also dependent to some degree on Norwegian seafood products,” said Egil Sundheim, spokesman for the Norwegian Seafood Export Council.
He noted the U.N. Food and Agriculture Organization ranks China and Norway as the world’s two largest seafood exporters.
But Europe’s biggest fertiliser firm, Yara (YAR.OL), which exports some 300,000 tonnes of fertilisers to China annually, said it was not very concerned about potential fallout.
Eight rounds of negotiations on the trade deal have been held in the past two years, with a ninth due in December -- about the same time that Liu or a nominee is due to collect his Nobel medal.
Norway’s chief negotiator, Haakon Hjelde, declined to comment on the talks, except to say that the meeting would be “subject to a procedure of preparation and confirmation”. (Editing by Kevin Liffey)