Towards the end of last week, it was announced that a new free trade agreement with the UK was in place. Britain’s exit from the EU created a great deal of uncertainty, so the news was gratifying. The British are a great friend and partner nation and on the basis of the EEA agreement, market access for products from Iceland has been excellent. It was therefore important to ensure that this continued to be the case for the UK outside the EU.
One of Iceland’s biggest business interests vis-à-vis the United Kingdom is seafood. More than 60% of exports to the UK consist of seafood. It could therefore have been assumed that this would be the focus of talks with Britain on free trade, as there are many opportunities for progress.
Times change and so do people and markets. The increased emphasis and ambition of Icelanders on the processing of marine products, in order to increase value creation even further, called for a review of current market access. Unfortunately, the reality is that high tariffs on individual seafood products significantly impede their processing in Iceland. These include salmon, redfish and various flatfish species, but these products are largely exported unprocessed from the country.
This could have been changed with better market access to the UK. In the free trade agreement that was signed, this was, for some reason, not applied for. The opportunities were not seized. In this respect, the agreement is disappointing. Values that could have been retrieved with improved tariff terms will not be created.
In order to ensure continued good living conditions in Iceland, value creation and exports need to be further increased. The fisheries sector plays an important role here, as the value of products can be further increased through increased processing in Iceland. With a new free trade agreement, however, it is clear that this may be delayed.