page_title: Iceland–European Union relations
section_title: Trade relations
hierarchical_section_title: Iceland–European Union relations / Trade relations
caption_attribution_description: English: Iceland, Reykjavik, Port area, Whaling Ships Deutsch: Island, Reykjavik, Walfangschiffe im Hafen
context_page_description: Iceland is heavily integrated into the European Union via the European Economic Area and the Schengen Agreement, despite its status as a non-EU member state. Iceland applied for membership in 2009 but the application was controversial and the Icelandic government later froze the application.
context_section_description: Economic relations between Iceland and the European Union are primarily governed by two agreements: a bilateral free trade agreement signed in 1972, and the agreement on the EEA in 1994. The EEA was established to give Iceland, among other European countries outside the EU, access to the EU market. Iceland's access to the EU market in respect of agriculture and fisheries is dealt with by separate bilateral agreements. Iceland is legally bound to implement into its own law all EU directives applicable to the free movement of goods, persons, services and capital. This is complemented by regular meetings between EU and Icelandic officials, including a twice-yearly meeting of EEA foreign ministers.
  78% of Iceland's exports went to the EU and 52% of Iceland's imports came from it, making the EU Iceland's most important trading partner, followed by Norway. Traditionally, Iceland's economy has focused on fisheries and renewable energy, but it has been diversifying into aluminium production, pharmaceuticals, information technologies, tourism and the financial sector. Iceland is still a large exporter of fish (the third largest exporter to the EU after Norway and China) with a world trade surplus of €1.1 billion in 2008. In fisheries, the EU had a 2009 trade deficit of €879 million. Until Iceland's 2009 financial crisis, its commercial services sector had been growing rapidly, accounting for almost 35% of total exports (goods and services combined).
caption: In fisheries, the most important sector of the Icelandic economy, Iceland has a €879 million trade surplus with the EU.
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