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- Faroe Islands
- Trade topics
- Negotiations and agreementsTrade policy
The Faroe Islands' trade relations with the EU are governed by the EU-Faroe Islands Free Trade Agreement. The Agreement is a first-generation agreement which entered into force in 1997, focusing on tariff liberalisation for goods.
The EU is the Faroe Islands’ largest trading partner by far, followed by Russia, the UK, China and Norway. The Faroe Islands are included in the EU’s Arctic Policy, where the EU is committed to investing in the future of people living in the Arctic, stimulating better education, sustainable growth and jobs.
- The Faroe Islands are the EU's 98th trading partner, representing less than 1% of the EU’s total trade in goods with the world in 2021.
- The EU is the Faroe Islands’ biggest trading partner, accounting for 51.1% of the country’s total trade in goods with the world in 2020. 67.8% of the Faroe Islands’ imports came from the EU and 33.8% of its exports went to the EU. The Faroe Islands’ other main trading partners are Russia (10.7%), the UK (9.6%), China (8.4%), Norway (4.7%), and the USA (3.1%).
- Total trade in goods between the EU and the Faroe Islands in 2021 amounted to €1.481 billion. The EU’s imports were worth €566 million and were dominated by fishery products (€516 million, 91%), industrial products (€48 million, 8%), and agriculture products (€3 million, 0.5%). The EU’s exports totalled €915 million. They were led by industrial products (€771 million, 84%), agricultural products (€113 million, 12%), and fishery products (€31 million, 3%).
- Two-way trade in services between the EU and the Faroe Islands in 2020 amounted to €287 million, with EU imports of services from the Faroe Islands representing €100 million and exports of services to the Faroe Islands accounting for €187 million.
- In 2020, there were no foreign direct investment (FDI) flows between the EU and the Faroe Islands. The FDI outward and inward stocks were rather limited: €98 million and €31 million respectively.
The EU and the Faroe Islands
The Faroe Islands have a unique relationship with the EU given that it is neither part of the EU, nor a member of the EEA unlike Norway and Iceland, nor an Overseas Country and Territory, like Greenland. With extensive autonomy under the sovereignty of the Kingdom of Denmark, the Faroe Islands decided not to become a part of the European Communities when Denmark joined in 1973. As such, the Treaties do not apply to the Faroe Islands (TFEU Article 355, 5 (a)). Formal relations between the EU and the Faroe Islands are currently based on three separate bilateral agreements dealing with fisheries, trade in goods and scientific and technological cooperation.
The Free Trade Agreement between the EU and the Faroe Islands, which covers trade in goods, came into effect in 1997. The Agreement was supplemented in 1999 with a Protocol on Veterinary Matters.
Committees and Dialogues
The Joint Committee established by the Agreement is responsible for ensuring the proper implementation of the Agreement and meets regularly to consider relevant issues.
Trading with the Faroe Islands
Rules and requirements for trading with the Faroe Islands:
- Importing into the EU from the Faroe Islands
- EU trade defence measures on imports from the Faroe Islands
- Exporting from the EU to the Faroe Islands
- Trade defence measures in force in the Faroe Islands
- The Faroe Islands is a self-governing territory of Denmark and is covered by Denmark's membership of the WTO.
Trade relations are part of the EU's overall political and economic relations with the Faroe Islands.