Iceland Free Trade Agreement With China

In the same year that it turned away from a closer European partnership, Iceland made history by being the first European country to sign a free trade agreement with the People`s Republic of China. It aims to boost Iceland`s fishing exports (42.2% of all exports) to China and bring Iceland`s geothermal industry closer to China. [44] A spokesman for the EU Trade Commissioner in Brussels responded to the news of the free trade agreement by saying that Iceland would have to denounce all its bilateral trade agreements if it ended up joining the EU. [45] Iceland is still a member of the EEA, as a signatory EFTA member. The deal, which is expected to eliminate most tariffs over the next few years, was signed by trade agents in Beijing during a state visit by Icelandic Prime Minister Johanna Sigurdardottir. Once completed, it will bring together two extremely unequal economies: Iceland`s gross domestic product of $14 billion in 2011 was only a rounding error of China`s GNP of $7.3 trillion this year. After being hit by the 2008 financial crisis, the government promised to diversify the local economy by looking beyond the European continent when it comes to trade. After signing the agreement, Chinese Premier Li Keqiang said, “It also testifies to the deepening of our relations, especially our economic relations, which have reached a new high.”| In 2010 Enex signs an agreement on geothermal energy in China Iceland is not a member of the European Union, although it has signed agreements granting it the same rights and obligations as a member state (with a notable exception from the EU`s Common Fisheries Policy) and excluded from the bloc when concluding trade agreements. With trade agreements to be adopted unanimously within the EU, years of negotiations have gone up in smoke. It turns out that the Chinese have not been very impressed with the EU hierarchy in trade negotiations. While the European Commission is trying in Brussels to represent member states centrally, the Chinese have appealed to their own allies.

One of the most specific relations that China has established is with the Czech Republic, for which China is already the second largest trading partner. To benefit from free trade under the free trade agreement, goods must comply with at least one of the following rules: those who think that trade relations between the EU and China have been blocked by the Chinese are mistaken. . . .

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