China and Iceland sign free trade agreement

ossur skarphedinssonThe world’s most populous country has signed a free trade agreement with Europe’s most sparsely populated nation. Iceland can now export more seafood to China, while China has moved one step closer to accessing Iceland’s abundant natural resources.

The Chinese commerce minister, Gao Hucheng, and Icelandic foreign affairs minister  Össur Skarphéðinsson signed the 15 April free trade agreement between their two nations at a Tiananmen Square reception. Premier of China Li Keqiang and Icelandic prime minister Jóhanna Sigurðardóttir also witnessed the agreement.

The Icelandic foreign affairs minister said the agreement will allow Iceland to participate in China’s rapidly expanding market and create new jobs in the booming Chinese economy.

A Bloomberg Businessweek article said the agreement will increase Icelandic seafood exports to China and dramatically decrease tariffs on imports to the small island nation. China, in turn, will gain a greater foothold on Iceland’s gold, oil, gas, and other natural resources.

The agreement comes after a recent state visit to China by Iceland’s Prime Minister. Chinese firms and businessmen have been showing increasing interest in investing Iceland, although there is a measure of caution locally about China overbearing their influence and ambitions on the small island.