Norway's salmon rot as China takes revenge for dissident's Nobel Prize

Norway has reported China to the World Trade Organisation (WTO) in an escalation of a row about fish which has pitted one of Europe's smallest countries against the biggest nation in the world.

The Chinese imposed additional import controls on Norwegian salmon last year in apparent retribution for the Nobel Peace Prize awarded in Oslo to the Chinese dissident, Liu Xiaobo. The result has been a collapse in sales of salmon to China, and the sight and smell of North Sea fish rotting in Chinese warehouses. The Norwegian Foreign Office said overall trade with China had grown by 46 per cent over the past six months. But sales of fresh salmon, meanwhile, have collapsed 61.8 per cent.

Officials said they would not speculate as to why Beijing had ignored trade rules relating to Norwegian salmon. But it seems clear that the threat from the Chinese embassy in Oslo last year, of "damage" to diplomatic ties should the Nobel Prize be handed to "a criminal" has focused on a narrow, iconic target.

The Foreign Office said it was in talks with the WTO about how to proceed against China. "Norway believes the measures put in place by China are in conflict with international trade rules, and we have raised the issue in the WTO," said a spokesman. "We are now in a dialogue with Chinese authorities to resolve the issue, and we will continue to monitor the situation."

The row began last year when the Norwegian fisheries minister, Lisbeth Berg-Hansen, was snubbed when she went to visit China in the days following the Nobel prize-giving ceremony. The Foreign Office has pledged to try to solve the issue.

This should have been the year that Norway cashed in on the burgeoning Chinese middle class's new-found love of Japanese-style raw fish. A government sponsored lobby group, Seafood Norway, even forecast a sales increase of as much as 40 per cent. The group's director, Christian Chraner, said his members had invested heavily in their supply chains in order to make sure their produce would reach China in a fresh state. But the new veterinary controls imposed by Beijing meant the fish rotted before they could be moved on to retailers or restaurants.

"They have invested in long-term contracts, manpower and operations. It takes time to build that new type of structure and that investment should now be paying returns," he said. "The fish is going into the country as fresh fish, but it is waiting for such a long time in warehouses that it is going bad."

He said China's new rules were also being applied selectively, effectively punishing Norwegian fish exporters.

Marine Harvest, a vast Norwegian salmon farmer with operations worldwide, has switched to exporting Scottish salmon – with no problems.

Russia and France are Norway's largest export markets. Last year, China represented only 1.66 per cent of Norwegian salmon exports, but farmers see it as a potential boom market.