Terms of trade inside and outside the EU Aðalsteinn Leifsson Viðskiptaráð 22. október 2007.

Terms of trade inside and outside the EUAðalsteinn LeifssonViðskiptaráð 22. október 2007

The issue...The European Union is the largest market and the largest trading power in the world

Trade Agremeents fall, at least to the greatest extend, under the competence of the European Union

Trade between Iceland and the European Union is governed by the Agreement on the Economic Area (EEA Agreement)

External trade is outside the scope of the EEA Agreement – and Iceland is therefore in principle not part of the external trade policy of the EU

The Economic Giant

Trade in Goods

Trade in Services

Iceland – inside or in-between?

• Best of both worlds?

or

• Located midway between Kringlan and Smáralind!

#1: Our trade is with the EU

#2: Outside does not mean unaffected“…establishing a dynamic and homogeneous European Economic Area, based

on common rules and equal conditions of competition…“

Annexes: Veterinary and phytosanitary matters

Technical regulations

Public procurement

State Aid

1. Fish from Russia2. Ketchup from the US3. Salami to the Faroe Islands4. Open skies (EU – US)5. Beef from SACU6. Þorrablót finally possible?!?

Just a few practical examples

#3: Free Trade Agreements

• We mostly follow in the footsteps of the EU – with notable exceptions like China

• Homogenity is the primary concern• The EU (17 in force, approx. 30 being negotiated) is

even more active than EFTA (15 in force, 7 being negotiated) in creating a free trade network for it’s members and has a wider network of various trade agreements

• The challenge is to ensure that Icelandic companies enjoy the same terms of trade as competitors in the EU – and Iceland has done extremely well in this regard

#4: Fully on the inside

• All restrictions on trade with the EU will be lifted• Part of the strongest trading power in the world• Negotiations among the insiders – and with the

European Commission - on a common position• Access to a wide network of trade agreements,

over flight agreements, fisheries agreements etc.

• A partial delegation of sovereignty in exchange for open market, increased influence and greatly enhanced negotiation position

Back to the question

Iceland – inside or in-between?

• Best of both worlds?

or

• Located midway between Kringlan and Smáralind!

Conclusion

• The fact is that we are not in-between• We are de facto members of the European

Union– Trade with the EU is primary concern– Homogeneity of the EEA

• An establishment partly inside and partly outside Kringlan with a lease agreement with limited rights and limited freedoms... Borgarkringlan!

16+ Free Trade Agreements

EFTA Iceland Negotations Pre-negotiationsDecla-rations

Others

Israel EU (1972) Thailand MERCOSUR USAPalenstine GCC Indonesia Ukraine RussiaCanada ChinaEgypt Faroe Islands PeruMexico IslandsChileSingaporMaroccoCroatiaLibanonTurkeyJordanSouth KoreaSACUTunisia