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Iceland's economic and trade relations with the EU are mainly governed by the European Economic Area (EEA) agreement.

The European Economic Area extends the laws of the single market (except for agriculture and fisheries laws) to the European Economic Area countries.

This means that Iceland is legally bound to add EU directives and regulations about the free movement of goods, persons, services and capital into Icelandic law.

Trade picture

  • The EU makes up 53% of Iceland's total trade in goods, followed by the United Kingdom (8.1%), the United States (8%), Norway (7.9%),  and China (5.2%).
  • The EU enjoyed a small trade surplus of € 190 million in 2019.
  • 60% of Icelandic exports go to the EU. Iceland's exports to the EU mainly consist of base metals and articles thereof (38%) and live animals; animal products (35%).
  • Iceland was in 2019 the sixth-largest exporter of fish and fishery products to the EU after Norway, UK, China, Morocco and Ecuador, representing 4% of EU fish and aquaculture imports.
  • Iceland grants duty free market access for most fish and fishery products. The EU also applies tariff concessions on some fish and fishery products originating in Iceland.

EU-Iceland: Trade in goods

Trade in goods 2018-2020, € billions
Year EU imports EU exports Balance
2018 3.1 3.3 0.1
2019 2.8 3.0 0.2
2020 2.7 2.7 0.0

EU-Iceland: Trade in services

Trade in services 2017-2019, € billions
Year EU imports EU exports Balance
2017 1.3 1.3 0.0
2018 1.4 1.4 0.0
2019 1.4 1.3 -0.1

EU-Iceland: Foreign direct investment

Foreign direct investment 2019, € billions
Year Inward stocks Outward stocks Balance
2019 2.3 7.0 4.7

Unless otherwise mentioned “EU” concerns for all indicated years the current European Union of 27 Member States.

Date of retrieval: 12/04/2021

More statistics on Iceland

EU and Iceland

As a member state of the European Economic Area, Iceland fully applies EU laws about the four freedoms (free movement of goods, persons, services and capital), along with laws related to other areas of EU and EEA cooperation.

As a result, the EEA agreement creates a lot of economic integration, common competition rules, rules for state aid and government procurement between Iceland and the EU.

Agriculture and fisheries are not covered by the EEA agreement. However the agreement emphasises the commitment of the parties to a gradual opening up of agricultural trade, which is done by concluding separate agreements.

As member of the European Free Trade Association (EFTA), Iceland seeks to conclude bilateral free trade agreement in the so-called EFTA framework. This means that Switzerland, Norway, Iceland and Liechtenstein can negotiate a free trade agreement with a respective third country via EFTA.

Trading with Iceland