Iceland Signs Free Trade Agreement with UK

fish fishing haddock

Iceland and the UK signed their new free trade agreement in London on Thursday, RÚV reports. Minister of Foreign Affairs Guðlaugur Þór Þórðarson says that in finalizing the agreement, Iceland has “secured our interests” with its second-most important trading partner.

The deal, which also extends to fellow EFTA member countries Norway and Liechtenstein, was announced last month and replaces the temporary agreement that went into effect after Britain left the EU. “In terms of overall trade volumes,” the BBC reported, “this deal is more significant for Norway and Iceland than it is for the UK,” although importantly for post-Brexit Britain, it does signal that the nation is quickly making new trade deals for itself. The UK government also said that reduced import tariffs on products such as shrimp, prawns, and haddock would “cut costs for UK fish processing, helping to support jobs in Scotland, East Yorkshire and northern Lincolnshire.”

At the time, Guðlaugur Þór hailed the deal as “crucial for both Icelandic companies and consumers,” but those in Iceland’s fishing sector have expressed disappointment with the agreement, believing that little will change for their industry prospects. However, speaking to reporters after signing today, Guðlaugur Þór asserted that “[t]his is not an endpoint. It is, however, gratifying if people are seeing the importance of increasing and strengthening our trade network and increasing our access to foreign markets.”

Icelandic Lamb Exported to China for the First Time

Icelandic lamb

The first shipment of Icelandic lamb was exported to China this week, RÚV reports. Björn Víkingur Björnsson, CEO of Fjallalamb Ltd, says the meat was well received, which bodes well for increased export opportunities in the near future.

Icelandic lamb producer Fjallalamb is the first and, so far, only company to have been granted a license to export lamb to China and has been working to get its product onto the Chinese market for two years, ever since the two countries revised the terms of their free trade agreement in 2018. Per the revised terms, exported lamb must receive a health certification; exported meat may only come from lambs under six months of age that were born and bred in scrapie-free regions. Slaughterhouses, meat packing centres, and storage centres where the meat is processed or held must also be located in scrapie-free regions. Fjallalamb is currently the only Icelandic lamb producer to fulfil these requirements.

Fjallalamb’s first test shipment contained around 20 tonnes of lamb. Björn Víkingur says that it took a long time to find companies that could connect Fjallalamb with the market it’s seeking to enter in China, namely “high-class restaurants.”

The CEO continued that his company’s Chinese customers “are extremely interested – they’ve tasted the meat and want to make an ongoing agreement.”

At the time that Fjallalamb received its export license, Björn Víkingur said that it was not possible for the company to sell all its product on the Icelandic market. In order to meet demand in China, however, it’s likely that the company will need to increase its production, although it’s unclear at this time by just how much. “If it works out that farmers can increase production and if, as I think is likely, China wants more in the fall if all goes well, then this could be a promising situation.”

Brexit Brings No Immediate Changes for Icelanders Living in UK

Great Britain’s official exit from the European Union on Friday night won’t have any immediate ramifications for Icelanders who have settled in the country, Vísir reports. Nevertheless, authorities have urged Icelanders intending to remain in the UK after that time to take steps to secure residence permits in advance.

British Ambassador Michael Nevin has stressed that for the time being at least, nothing has really changed; the UK will still abide by European Union laws and regulations until December 31, 2020. He also noted that Icelandic tourists to the UK will be able to enter the country as usual until the same date. “There will be some new regulations after that,” he said, “but Britain will remain open to Icelanders.”

Icelanders who live in the UK now and intend to remain in 2021 and beyond are reminded, however, to apply for a ‘settled status’ residence permit. It’s estimated that 2-3,000 Icelanders live in the UK and thus far, 1,100 have applied for settled status. Stefán Haukur Jóhannesson, Iceland’s ambassador in London, says the deadline is June 30, but urges Icelanders not to wait til the last minute. “It’s not hard to do—there’s an app,” he remarked.

Iceland and UK both “free trade-minded”

Minister for Foreign Affairs Guðlaugur Þór Þórðarson says the next step will be for Iceland to establish new agreements with the UK. Trade and business will be foremost among Iceland’s priorities when negotiating, particularly as regards the fishing industry.

“One of the things we’ve placed an emphasis on is having better access than we currently do via EEA agreements when it comes to marine products,” remarked Guðlaugur. “Because although our current access is good, we’re still not talking about a total absence of customs duties.”

The outlook for favourable trade arrangements with the UK currently seems good for Iceland. For one, both Iceland and the UK are “free trade-minded” says Ambassador Nevin. “We don’t like customs duties and have a high regard for the values of the free market. Which is why we want a trade agreement that doesn’t create any obstacles between us.”

US Considering Free Trade Agreement With Iceland

Minister of Foreign Affairs Guðlaugur Þór Þórðarson and US Vice president Mike Pence led a US-Icelandic Business Roundtable.

The Trump administration is considering a free trade agreement with Iceland, Axios reports. This comes on the heels of Vice President Mike Pence’s Iceland visit, during which Pence warned Iceland not to rely on Chinese technology and praised their decision not to participate in China’s Belt and Road Initiative, although no such decision had been made.

According to the Axios report, it isn’t Iceland’s economy that’s tempting the Washington leaders, but the country’s strategic location. The President’s national security team has apparently emphasised the importance of investing in the region. The idea of a trade agreement was floated at a Senate GOP lunch last Tuesday, according to Axios, where Pence reportedly told those in attendance that a working group was exploring a deal and that he was “amenable” to the idea. Minister of Foreign Affairs Guðlaugur Þór Þórðarson has made no secret of his wish for a free trade agreement with the US.

According to Axios, the intention of the trade agreement would be to encourage an alliance with the US, instead of Iceland building relationships with Russia and China. Iceland has had a free trade agreement with China since 2014 and when Vice President Pence congratulated Iceland on not participating in the Belt and Road initiative, both the Prime Minister and Minister of Foreign Affairs quickly corrected him, stating that while Iceland hadn’t yet agreed to participate, no decision to decline participation had been made. China’s Ambassador to Iceland Jin Zhijian has called the Vice President’s comments on the Belt and Road Initiative and Huawei “malicious slander” and “fake news.”