Iceland moves closer to full trade deal with China

FishUpdate | 12 September, 2007

Iceland moves closer to full trade deal with China

ICELAND, one of the world’s largest fish producers, is moving closer to a free trade deal with China, one of the world’s fastest growing consumers of seafood.

Representatives of the Trade Council of Iceland and the Trade Development Bureau of the Ministry of Commerce in China have signed a three-year agreement on co-operation in furthering commerce and trade between the two countries.

European fish processors are worried that the price of white fish, salmon and prawns could rise even higher than they are now if China becomes a fish buyer in a big way.

The agreement was signed in Reykjavik on Monday by Zhang Chaomei, Deputy-Director of the Chinese Bureau, and Jon Asbergsson, Managing Director of the Trade Council of Iceland.

The Trade Council is an organisation which helps Icelandic companies to sell their products, services, and to gain know-how in the international marketplace. The Council has a seven-member executive board appointed by the minister for foreign affairs and comprised of business leaders from all sectors of the Icelandic economy. It also employs a total of 25 marketing professionals, 19 based in Iceland and six overseas. The Trade Council of Iceland is organised into a number of main service areas which include market development, information services and investment.

In April, China and Iceland started talks on a free trade agreement between the two countries in a move which both sides hope will lead to a full free trade deal later in the year.

Wang Xinpei, spokesperson for the foreign ministry, said at the time that the first stage of the discussions includes negotiations on trade in goods, services and other sectors. “We hope the first round of talks will yield positive results through joint efforts from the two sides,” he said. He added that the proposed free trade agreement has a potential impact on bilateral economic and trade relations between Iceland and China.

Gunnar Snorri Gunnarsson, Iceland’s ambassador to China, said in an interview with People’s Daily earlier this year that he expected the agreement to be comprehensive and to cover trade, services and investments.

The worry for Europe is that if, as now seems almost certain, China does strike a tariff free deal with Iceland, it could lead to increased pressure on Iceland’s strictly controlled fish supply. China has a population approaching 1.6 billion, but more significantly it has a huge and growing wealthy middle class with a taste for many things Western - and that includes seafood along with BMW cars. If they start buying Icelandic cod and haddock in significant quantities it will almost certainly push up prices even higher. The UK and the Humber markets in particular depend on Iceland for 70 per cent of its overall white fish supply and prices have risen sharply in the past 18 months.

There have also been food safety concerns about certain types of seafood coming out of China. The United States Food and Drug Administration (FDA) recently announced a broader import control of all farm-raised catfish, basa, shrimp, dace (related to carp) and eel from China.

And food relating to Chinese fishery products was on the agenda when the European Health Commissioner Markos Kyprianou visited the People’s Republic of China and Hong Kong recently to discuss improved cooperation on public health issues.

source: FishUpdate