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Conclusion of a new Free Trade Agreement with the United Kingdom

Iceland, together with Liechtenstein and Norway, has concluded a new Free Trade Agreement with the United Kingdom. Gudlaugur Thór Thórdarson, Minister for Foreign Affairs and International Development Cooperation of Iceland, says that the agreement marks a new era in the relationship between the countries. The Ministers for Foreign Affairs and Commerce from Iceland, Norway, Liechtenstein and the United Kingdom met today in a teleconference to formally confirm the successful conclusion of the free trade agreement. 

 “A free trade agreement with the United Kingdom has been a priority during my term in office and it will be crucial for both businesses and consumers. I have stressed the importance of ensuring a strong future relationship with the United Kingdom following its departure from the European Union. I am convinced that this agreement will strengthen the economic relations and the bonds of friendship between Iceland and the United Kingdom for years to come,” said Gudlaugur Thór Thórdarson, the Minister for Foreign Affairs and International Development Cooperation of Iceland.  

The new free trade agreement is progressive and comprehensive covering most areas of trade between the states and related rules. In light of the fact that the United Kingdom remains one of Iceland’s most important export markets and the close ties between the countries, the conclusion of an agreement with the United Kingdom was vital. 

The agreement provides mutual access to markets with specific conditions in relation to trade in goods, in services and public procurement. Iceland’s core interests, with respect to trade in goods, are guaranteed, including trade in fish and agricultural products. The Agreement also facilitates trade in services between the states in addition to providing access for Icelandic businesses to public procurement in the United Kingdom.

The agreement contains ambitious commitments in the area of environmental protection and the battle against global warming as well as commitments in the field of labour law. It also contains a special chapter on gender equality and women’s empowerment in trade. This is the first time that a trade agreement concluded by Iceland contains such provisions. 

“Among Iceland’s main focal points during the negotiations was the importance of gender equality, in accordance with the main policies of the government. It is therefore of great satisfaction that the agreement contains provisions about the economic empowerment of women where the importance of gender equality and gender perspectives are reaffirmed,” said Gudlaugur Thór Thórdarson.

The Agreement is very comprehensive in comparison with other free trade agreements concluded by Iceland. In addition to the provisions discussed above, it contains provisions in the field of intellectual property rights, sanitary and phytosanitary regulations, technical regulations, state aid, competition, chapter on small and medium-sized enterprises, good regulatory practices among many other subjects.

The negotiations with the United Kingdom on a free trade agreement were initiated as a result of the departure of the United Kingdom from the European Union and began formally in September last year. The UK’s departure from the EU had a significant effect on relations between Iceland and the United Kingdom which in turn made it necessary to renegotiate a number of agreements, including in the field of foreign trade. An interim agreement on trade in goods that entered into force at the beginning of the year will now be superseded by this permanent free trade agreement. It is expected that the agreement will be signed in the next weeks. 

Preliminary version of the main agreement can be found here. This version is subject to amendments in the legal review.

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