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Iceland's economic and trade relations with the EU are mainly governed by the European Economic Area (EEA) agreement.
The European Economic Area extends the laws of the single market (except for agriculture and fisheries laws) to the European Economic Area countries.
This means that Iceland is legally bound to implement EU directives and regulations on the free movement of goods, persons, services and capital.
- The EU makes up around 55% of Iceland's total trade in goods, followed by the United States (8%), the United Kingdom (7.3%), Norway (6.9%), and China (5.9%).
- The EU had a small trade deficit with Iceland of €146 million in 2021.
- Around 65% of Icelandic exports go to the EU. Iceland's exports to the EU mainly consist of base metals and articles thereof (58.2%); and live animals or animal products (30.9%).
- In 2021, Iceland was the sixth-largest exporter of fish and fishery products to the EU after Norway, Morocco, the UK, Ecuador and China, representing 4.6% of EU fish and aquaculture imports.
- Iceland grants duty-free market access for most fish and fishery products. The EU also applies tariff concessions on some fish and fishery products originating in Iceland.
The EU and Iceland
As a member state of the European Economic Area, Iceland fully applies EU laws about the four freedoms (free movement of goods, persons, services and capital), along with laws related to other areas of EU and EEA cooperation.
As a result, the EEA agreement creates a lot of economic integration, common competition rules, rules for state aid and government procurement between Iceland and the EU.
Agriculture and fisheries are not covered by the EEA agreement. However the agreement emphasises the commitment of the parties to a gradual opening up of agricultural trade, which is done by concluding separate agreements.
As a member of the European Free Trade Association (EFTA), Iceland seeks to conclude bilateral free trade agreement in the so-called EFTA framework. This means that Switzerland, Norway, Iceland and Liechtenstein can negotiate a free trade agreement with a respective third country via EFTA.
Committees and Dialogues
The EU and Iceland meet regularly to discuss issues and best practices and oversee the proper functioning of the Agreement.
Trading with Iceland
- Importing into the EU from Iceland
- EU trade defence measures on imports from Iceland
- Exporting from the EU to Iceland
- Trade relations are part of the EU's overall political and economic relations with Iceland
- Iceland is a member of the World Trade Organization