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China and Iceland Sign Free Trade Agreement

By Dezan Shira & Associates
Posted: 22nd April 2013 08:59
A free trade agreement (FTA) between China and Iceland was signed in Beijing on April 15, witnessed by the Premier of China Li Keqiang and the Prime Minister of Iceland Johanna Sigurdardottir. Iceland is the first European country to enter into an FTA with China.
The China-Iceland FTA covers trade in goods and services, investments, and various other areas. Specific provisions on investment, movability of citizens, sanitary and phytosanitary measures, technical trade barriers, rules of origin, customs procedures, competition policies and intellectual property are also included in the FTA. The parties also made commitments in service trade that are stricter than the WTO commitments.
According to the agreement, all Chinese industrial products and aquatic products exported to Iceland, which constitute 99.77 percent of the total export volume from China to Iceland, will be subject to zero-rated customs duties in Iceland. Meanwhile, China will impose zero tariff rates on 7,830 tariff items imported from Iceland (81.56 percent of the total import volume from Iceland), including aquatic products produced in Iceland. After the establishment of the China-Iceland Free Trade Zone, nearly 100 percent of trade volumes between the two countries will be duty free.
Negotiations on the China-Iceland FTA were first initiated in December 2006, and an agreement was reached on all substantial matters in January 2013 after six rounds of bargains. The FTA is expected to substantially promote mutually beneficial cooperation between the two countries, as well as facilitate the sound development of bilateral economic and trade relations. It is also considered a stepping stone for China regarding the future possibility of concluding FTAs with other countries in the European Union.
China is currently conducting negotiations with 28 countries and territories to build 15 free trade zones. FTAs have been signed with Association of Southeast Asian Nations (ASEAN), Singapore, Pakistan, Chile, New Zealand, Peru, Hong Kong, Macao, and Costa Rica. China is also discussing treaty details with the Gulf Cooperation Council, Australia, Norway and Switzerland to set up four more FTAs. In addition, South Korea, Japan and China initiated the first round of negotiations for the China-Japan-Korea FTZ at the end of March.
This article was first published on China Briefing.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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