WORLD TRADE
ORGANIZATIONWT/REG95/R/B/1
G/L/361
14 April 2000
(00-1525)
Original:  English
AGREEMENT BETWEEN THE EUROPEAN COMMUNITIES AND ICELAND
Biennial Report on the Operation of the Agreement
Communication from the Parties
The report below presents the information rece ived from the Permanent Delegation of the
European Commission, dated 21 March 2000.  It is organized in accordance to the Standard Format
for Information on Regional Trade Agreements (WT/REG/W/6).
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I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
The trade agreement between the European Community and Iceland has undergone
considerable change since 1994.  At that time the existing free trade agreements were largely replaced
by a new agreement, the Agreement on the European Economic Area (EEA),1 which links the
European Union (EU) and Iceland, together with Norway and Liechtenstein, in a broad integrated
economic agreement.
2. Type of Agreement
The EEA Agreement provides for the freedom of movement of goods, persons, services and
capital, throughout the territories of the Contracting Parties.  It provides for a high degree of economic
integration, set out in a large number of Protocols and Annexes.
It also contains provisions for the strengthening and broadening of co-operation among the
Parties in a wide range of activities, including research and technological development, information
services, the environment, youth policy, education and training.
All transitional periods associated with the free trade area established by the EC/Iceland
Agreement have long expired.  The EEA Agreement provides for some transitional periods to allow
for adaptation to the full terms of the Agreement.  Most of these have also now expired, but some
remain subject to periodic review and will expire as the Contracting Parties’ legislation converges.
As additional legislation is integrated into the Agreement, the Parties may establish furthertransitional periods, to allow for their adaptation.
                                                     
1 Official Journal of the European Communities, No L1, 3 January 1994, p.1WT/REG95/R/B/1
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4. Trade Data
Statistical data on the evolution of trade between the European Communities and Iceland is
presented in the Annex.
II. TRADE PROVISIONS
1. Import Restrictions &
2. Export Restrictions
The EEA Agreement confirms that all trade in  non-agricultural products between the EC and
Iceland is free of duty or quantitative restrictions (as has been the case since the mid-1980s).
Arrangements for trade in agricultural products are set out in a number of specific Protocols.
The extent of liberalisation under the EEA Agreement is only possible because the non-EU
members have agreed to take over in its entirety the whole of the Community acquis  in the relevant
economic sectors.  This is done on an ongoing basis, and requires a continuing effort on the part of the
Contracting Parties to integrate new acquis  into the Agreement.
3. Rules of Origin &
4. Standards &5. Safeguards &
6. Anti-dumping and Countervailing Measures &
7. Subsidies and State-aid
The EEA Agreement prohibits the use of trade defence instruments in relation to areas
covered by its provisions and in which the Community acquis  is fully integrated into the Agreement.
The Agreement provides that the non-EU Cont racting Parties will take over the EU’s acquis  into their
national legislation.  This concerns a wide ra nge of trade instruments and measures, including
standards, rules of origin, Veterinary and Phytosanitary regulations, rules on state-aids and
competition etc.
8. Sector-Specific Provisions
Those products falling within chapters 1 to 24 of the Harmonized System and a small number
of other products of agricultural origin, are cove red by the EEA Agreement only to a limited extent, as
set out in specific protocols to the Agreement (Protocol 3 for processed agricultural products,
Protocol 9 for fisheries products).  The Protocol s which formed part of the 1973 EC/Iceland FTA have
been incorporated in the EEA agreement, to the extent that they have not been completely overtaken
by the Protocols forming part of the new Agreement.
The EEA Agreement also includes a provision foreseeing future bilateral negotiations for
additional liberalisation in the agricultural sector.  As yet the Parties have not availed themselves ofthis possibility.WT/REG95/R/B/1
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III. GENERAL PROVISIONS OF THE AGREEMENT
5. Institutional Framework
The EEA Agreement is managed on an ongoing basis by a Joint Committee which meets on a
monthly basis.  Political direction is provided by a Joint Council, and a number of other institutions
with consultation, surveillance, judicial and arbitration functions are set up under the Agreement.WT/REG95/R/B/1
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Page 4ANNEX2
Table 1 - EU Imports from World and Iceland, 1980-1998
(Million ECU)
SITC: 0 1 2 3 4 5 6 7 8 9 TOTAL
1980 (EU 9)
      World 23,908 1,929 27,501 85,384 1,579 11,374 37,648 37,853 22,176 20,502 269,853
      Iceland 159 0 7 1 29 4 76 2 8 2 288
1984 (EU 10)
      World 33,643 2,810 36,139 107,594 2,803 19,968 48,969 71,432 34,537 24,205 382,100
      Iceland 222 0 12 1 26 5 100 5 9 32 412
1988 (EU 12)
      World 32,221 2,152 35,752 47,393 1,499 25,067 59,078 106,689 49,968 27,937 387,757
      Iceland 557 1 17 1 14 6 98 8 7 22 731
1992 (EU 12)
      World 34,580 3,215 32,218 65,183 1,748 33,888 69,355 146,277 76,771 23,900 487,135
       Iceland 740 1 11 1 13 4 112 14 7 4 908
1996 (EU 15)
      World 41,305 3,599 34,829 75,910 2,423 44,328 75,479 189,056 93,962 20,131 581,065
      Iceland 742 0 22 1 28 12 135 18 14 4 975
1997 (EU 15)
      World 44,248 4,072 40,131 85,155 2,554 51,485 87,685 229,346 108,779 17,690 672,413
      Iceland 774 0 27 4 31 11 172 20 15 4 1,058
1998 (EU 15)
      World 45,198 4,458 39,370 64,843 2,891 55,290 94,672 264,153 116,092 22,676 709,643
      Iceland 874 0 27 2 27 10 224 35 17 6 1,223
                                                     
2 The source for all the tales is Eurostat (COMEXT).WT/REG95/R/B/1
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Page 5Table 2 - EU Exports to World and Iceland, 1980-1998
(Million ECU)
SITC: 0 1 2 3 4 5 6 7 8 9 TOTAL
1980 (EU 9)
      World 13,662 3,422 4,327 10,071 717 23,228 46, 455 84,154 21,333 13,716 221,084
      Iceland 28 4 4 51 1 29 59 68 47 31 324
1984 (EU 10)
      World 21,120 5,784 7,319 18,087 1,343 38,465 65,412 129,088 39,835 24,806 351,259
      Iceland 39 9 6 41 2 46 91 160 85 48 527
1988 (EU 12)
      World 19,588 6,205 7,602 8,232 1,158 44,449 65, 673 141,249 48,507 20,256 362,917
      Iceland 38 11 10 36 2 59 109 168 135 57 625
1992 (EU 12)
      World 24,887 8,778 8,068 10,552 1,491 54,200 71,091 180,838 59,247 16,939 436,091
      Iceland 46 12 8 28 1 65 113 249 123 18 663
1996 (EU 15)
      World 30,646 10,339 11,414 15,431 1,998 79,14 4 102,957 283,081 79,287 12,695 627,011
      Iceland 63 16 12 15 2 105 175 347 159 11 923
1997 (EU 15)
      World 33,504 12,374 13,084 17,109 2,575 93,04 6 114,927 331,113 88,686 13,717 721,109
      Iceland 66 19 15 19 2 119 189 496 187 4 1,137
1998 (EU 15)
      World 31,772 12,005 11,554 13,833 2,831 95,88 5 112,815 343,435 89,424 16,869 730,423
      Iceland 73 21 20 11 3 143 205 494 203 39 1,234WT/REG95/R/B/1
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Page 6Table 3 - EU Trade with Iceland by HS Section
(Million ECU)
EXPORTS IMPORTS
SECTION 1988 1892 1996 1997 1998 SECTION 1988 1992 1996 1997 1998
TOTAL 625 663 923 1,137 1,234 TOTAL 731 908 975 1,058 1,223
I 1 2 5 5 8 I 464 593 465 472 596
II 13 17 19 20 22 II 1 1 1 1 2
III 2 1 2 2 3 III 14 13 28 31 27
IV 37 42 59 63 70 IV 95 149 279 304 281
V 3 9 3 0 1 82 21 6 V 5 4 91 41 1
VI 47 56 91 102 128 VI 5 4 11 11 10
V I I 3 5 3 4 4 9 5 5 6 0 V I I 12 445
VIII 7 4 4 4 4 VIII 12 13 13 15 14
I X 1 0 9 1 8 2 1 2 4 I X 01 001
X 2 2 2 4 4 3 4 3 4 3 X 11 222
XI 62 54 62 67 73 XI 11 6 7 7 8
XII 9 9 9 11 13 XII 0 0 0 0 0
XIII 12 14 15 18 21 XIII 0 1 2 3 2
XIV 3 3 4 5 5 XIV 1 0 1 0 0
XV 51 54 82 88 98 XV 88 99 126 162 216
XVI 131 137 275 305 388 XVI 5 5 16 18 27
XVII 39 114 80 201 146 XVII 3 9 2 2 7
XVIII 17 18 24 28 29 XVIII 2 2 4 6 9
XIX 1 0 0 0 0 XIX - - - - 0
XX 32 25 37 46 57 XX 1 0 0 0 1
XXI 21 4 7 8 6 XXI 3 4 4 5 7WT/REG95/R/B/1
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Page 7Table 4 - EU Trade with World by HS Section
(Million ECU)
EXPORTS IMPORTS
SECTION 1988 1992 1996 1997 1998 SECTION 1988 1992 1996 1997 1998
TOTAL 362,917 436,091 627,011 721,109 730,423 TOTAL 387,757 487,135 581,065 672,413 709,643
I 7,060 8,001 9,980 10,897 10,062 I 8, 349 10,300 10,897 12,227 13,296
II 6,372 8,511 8,819 9,757 9,145 II 17,55 5 17,353 23,130 25,437 24,992
III 1,341 1,673 2,286 2,977 3,156 III 1,542 1,781 2,250 2,390 2,693
IV 13,817 19,194 24,510 27,744 27,279 I V 13,638 15,595 18,511 19,019 19,518
V 9,723 12,152 17,487 19,630 16,711 V 55,920 73,081 84,793 95,737 75,508
VI 37,393 46,951 68,968 81,772 85,215 V I 22,179 29,303 39,774 46,234 49,432
VII 15,521 16,914 23,128 27,148 27,504 V II 10,125 13,862 17,132 19,323 21,043
VIII 4,119 4,084 7,159 7,375 6,435 VIII 6,121 5,701 7,590 8,498 8,224
IX 1,771 2,035 4,045 4,927 5,182 IX 9, 615 10,926 9,118 10,973 11,434
X 7,937 10,271 18,033 19,764 19,803 X 17,605 19,227 11,110 11,996 12,571
XI 20,244 25,208 31,611 34,724 35,221 X I 28,639 39,478 47,467 55,248 57,903
XII 3,440 4,526 5,922 6,313 6,043 XII 3,325 5,451 7,029 8,308 8,274
XIII 7,153 8,120 11,257 12,916 12, 894 XIII 2,593 3,883 4,386 5,090 5,648
XIV 13,026 12,425 16,992 19,285 17,990 X IV 17,526 15,037 21,620 23,890 26,981
XV 30,826 30,864 42,214 46,944 45,623 X V 26,101 29,345 33,661 40,312 44,472
XVI 93,666 120,842 193,730 226,482 234,539 XVI 81,389 106,397 146,298 173,122 195,378
XVII 46,674 59,351 89,086 104,705 110,049 XVII 25,240 40,386 42,797 56,275 68,476
XVIII 14,107 17,067 23,982 28,129 29,109 XVIII 14,869 19,652 24,343 27,814 29,926
XIX 402 388 1,097 1,326 1,656 XIX 118 194 466 603 510
XX 7,819 9,378 13,350 15,177 15,242 XX 6 ,655 12,072 14,394 17,529 19,046
XXI 8,204 5,727 13,354 13,115 11,565 XXI 5,733 5,511 14,298 12,387 14,318
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