China and Iceland Enter Into Free-Trade Deal

When comparing Iceland’s 2011 G.D.P. of $14 billion with China’s G.D.P. for the same period totaling $7.3 trillion, some may wonder what the benefit is to China of pursuing a free-trade deal with the small Nordic European country. While Iceland’s exports, primarily of fish, to China totaled $61 million, it imported goods and services from the Asian giant to the value of $341 million, and is not in the position to offer significant new market growth. However, it has been noted that global warming and the resulting polar ice retreat is making the Arctic more accessible, and Iceland could help China in breaking into new markets there. This theory is supported by the fact that China has expressed interest in obtaining observer status with the Arctic Council – an intergovernmental forum that deals with issues and problems unique to Arctic governments and inhabitants. The Arctic Council’s eight member countries are Canada, Finland, Iceland, Denmark, Norway, Russia, Sweden and the United States. Chairmanship of the Arctic Council changes every two years, with Canada set to assume this role at the council’s meeting in May 2013, taking over from current chair Sweden.

Following talks between China’s Premier Li Keqiang and Iceland’s Prime Minister Johanna Sigurdardottir a joint statement was issued in which there was a call for bilateral cooperation on gender equality, human rights, labor issues, Arctic affairs, geothermal development, education, culture and tourism.