China and Iceland will kick off free trade agreement (FTA) talks
next week, and are expected to make substantial progress.
"The first round of talks will be held between April 11 and 13,"
Gunnar Snorri Gunnarsson, Iceland's ambassador to China, told
China Daily in an exclusive interview. "The second round is
scheduled to be held in June," he added.
The ambassador is optimistic about the negotiations and said he
expected an agreement would be reached soon.
He said the completed agreement was expected to be comprehensive
covering trade, services and investment rather than separate
agreements like those between China and Chile.
Senior trade officials from the two countries agreed to launch
the talks in December after a joint feasibility study confirmed
"the establishment of the future FTA would benefit the two
countries in promoting the economic development and raising the
living standards of the people."
Gunnarsson said he hoped the proposed FTA, which would lower
tariffs, could improve Iceland's direct trade with China, and in
particular increase the market share of "clean Icelandic
seafood."
Although the European country exports fish to China, most get
processed in China and re-exported.
"We are thinking about the future. We think the Chinese will be
increasingly interested in high-quality seafood for the domestic
market," he said.
In 2005, China's average tariff on fisheries products was 10 to
12 percent. Elimination of the tariffs is expected to boost China's
imports.
Gunnarsson said the two parties may "need more time on talks for
the service sector" compared to the goods sector, where few
obstacles are seen.
Service trade between China and Iceland has grown rapidly in
recent years, albeit on a small scale and from a low base.
The service industries of the two nations are considered
complementary. China has a competitive advantage in the
labor-intensive service sector, while Iceland's capital-intensive
and technology-intensive service sector is more competitive.
Bilateral investment between China and Iceland is modest. But
the two countries see opportunities in shipbuilding, environmental
protection and energy, according to Gunnarsson.
An Icelandic company is currently involved in the establishment
of a geothermic system in Xianyang, Shaanxi Province, to supply the whole city with
geothermic energy.
Iceland was the first European country to grant China market
economy status. China's exports to Iceland hit US$77.67 million
last year, while imports from the northern European country stood
at US$39.99 million.
(China Daily April 5, 2007)
