Icelandic Foreign Trade Policy
Iceland's most extensive trade agreement concerns the European Economic Area (EEA), which forms the basis for a common market for goods, services, capital and labor between the 15 member countries of the European Union (EU) and three member countries of the European Free Trade Association (EFTA), which includes Iceland. Iceland is also a member of WTO, OECD and a number of other trade related organizations.
European Economic Area (EEA)
Iceland's most extensive economic co-operation agreement concerns the European Economic Area (EEA), which forms the basis for a common market for goods, services, capital and labor betweent the member countries of the European Union (EU) and three member countries of the European Free Trade Association (EFTA).
European Free Trade Association (EFTA)
In 1970 Iceland joined EFTA (European Free Trade Association). At the time, the other members were Great Britain, Denmark, Norway, Portugal, Sweden, Switzerland and Austria. The office of the Permanent Representation of Iceland to EFTA, headed by an Ambassador, is in Geneva, the site of the EFTA headquarters. Denmark and Great Britain left EFTA to join the European Economic Community (EEC) in 1973 (Portugal joined in 1986). At that time, the remaining EFTA countries concluded individual free trade agreements with the EEC (European Economic Community). In effect, the EEC and EFTA formed a free trade area for industrial products. Finland joined EFTA in 1986 and Liechtenstein in 1990, bringing the membership back to the original seven. In 1992, the EFTA countries concluded a wide-reaching trade agreement with the EEC and its member states forming the European Economic Area (EEA). The agreement took effect on 1 January 1994 (without the participation of Liechtenstein and Switzerland). Three EFTA-countries (Austria, Finland and Sweden) joined the European Union (EU) on 1 January 1995. Now, three EFTA-countries (Iceland, Norway and Liechtenstein) belong to the EEA, along with the 15 EU-countries.
Iceland became an associate member of the General Agreement on Tarriffs and Trade (GATT) in 1964 and a full member in 1968. Iceland was a founding member of the successor organization, the World Trade Organization (WTO) in 1995.
- Trade Policy Review, Iceland, Vol I & II, WTO, Geneva 2000.