IV.  POLITICAL ENVIRONMENT

                             POLITICAL FACTORS

Norway is a parliamentary democracy that presently has a minority
government led by Prime Minister Gro Harlem Brundtland of the
Labor Party.  She and her party initially came to power on 3
November 1990 when a coalition government made up of the
Conservative Party, the Christian Democratic Party and the Center
Party disagreed on issues related to the European Economic Area
negotiations, a proposed customs area between EFTA and the EC.
In the most recent elections (September 1993), Prime Minister
Brundtland and her party came away with a minority ruling
government, able to combine with other parties on an issue by
issue basis to gain a working majority.  Some now say that "Gro"
is "doomed to govern" Norway.  In general, however, there is a
strong political consensus existing among Norway's political
parties; it is mainly economic and commercial issues that tend to
heighten the differences among the parties and lead to changes in
government.

The biggest issue for the Norwegian government is trying to
convince its own population that EU membership is in their best
interests -- a majority of people are against it.  Back in 1972
the Norwegian government put this question to a popular
referendum which stirred great debate among different groups
(especially the farmers and fishermen who receive significant
subsidies from the Norwegian government -- more than they could
expect under EU rules and regulations).  The result was 52
percent against membership.

Recent poles indicate that another referendum, if taken at the
writing of this report, would have just as many people against EU
membership as in 1972 (if not more).  The actual moment of truth
will be 28 November 1994, when Norwegians will vote one more time
whether they want to be part of the EU.  Norway's referendum will
be the last of the four new applicant states to the EU (Austria,
Finland, Sweden & Norway).  The GoN has adopted this date to try
and gain maximum momentum from what they hope will be other "Yes"
votes in these three countries.  Many developments, however, may
disrupt this general strategy for EU membership among some of the
EFTA countries.

The United States and Norway remain strong friends, allies, and
good trading partners.  Norway is a key NATO member, signator of
most of the significant international trade agreements and a
player in the multinational scene well beyond what is expected
from a country with such a small but influential population.
Some 200 American companies have 100 percent owned subsidiaries
in Norway.  In addition to manufacturers and service companies that
have sufficient profit and market-share motives to establish a
direct presence in Norway, there are 2,700 American companies that
are represented in Norway by some 1,700 separate Norwegian
companies acting as agents and/or distributors (source: Kompass
Publications).  Thus Norway is a fertile ground for
agent/distributor agreements; the more so because outside of Canada
and the U.K., Norway is one of the easiest foreign markets to start
exporting to.

                        SOCIAL AND CULTURAL FACTORS

Norway is a country with 4.3 million people living in a long,
narrow, rough terrained area about 1,100 miles long.  It is a
relatively new country in European terms, having become an
independent state only in 1905, after having been linked with
Sweden since 1814.  Before this redistribution of Norway to
Sweden after the Napoleonic wars, Denmark had had sway over
Norway for 400 plus years.  Consequently, it is understandable
why the three Scandinavian countries of today --Denmark, Norway
and Sweden--are so closely related to one another in terms of
language, ethnic roots, religion and a host of other ways; but
also different in many ways too.

Due to the rather recent independent status of Norway, there is a
tremendous amount of national pride and insistence that Norway
not be lumped together with Sweden or Denmark (or perhaps even
the EU?).  Norway has a deep whaling tradition and resumed
commercial whaling in 1993, despite opposition from the United
States and other members of the International Whaling Commission.