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The scope of the free trade agreement is very broad when compared to the usual free trade agreements of third countries. Examples of this can be found in Chapter 0301-0307 and HS Chapter 16, which results in duty exemptions for fresh and chilled fish. Frozen fish is also important in all areas for the country`s industry and processed fish products are largely duty-free in areas of interest to the country`s industry. “The UK is not only our closest geographical neighbour, it is one of the main trading partners of the Faroe Islands. This agreement means that our exports to Britain will be able to continue unimpeded when the UK leaves the EU. The economic importance of this agreement for the Faroe Islands cannot be overstated. It will also provide a solid foundation on which we can develop our future trade relationship with the UK,” said Michelsen. In addition to free trade, the agreement also provides a framework for enhanced cooperation between nations with regard to all the common interests of nations. The areas of cooperation mentioned in particular are: culture, education, sport, health, transport, communications, tourism, environmental issues, energy and resource management. New quantitative export restrictions or measures of equivalent effect in trade should not be introduced.

Contracting parties should remove quantitative import restrictions. A notable exception to the free trade agreement is the special status of the fishing industry. Existing restrictions on foreign investment in industry, which exist in both countries, will not be lifted. The EU Faroe Islands Free Trade Agreement applies to products under chapters 25 to 97 (non-agricultural) of the harmonised classification system, with exceptions. Trade between the EU and the Faroe Islands is not aimed at introducing new import duties. The Hoyvék Agreement is a free trade agreement between the Faroe Islands and Iceland. The contracting parties declare themselves ready to promote the harmonious development of trade in agricultural products not subject to the agreement, to the extent that agricultural policy allows. The parties reaffirmed their commitment to grant each other the most popular national treatment under the 1994 GATT. They did not rule out maintaining or creating unions, free trade zones or rules for border trade. There are provisions relating to the application of EU competition law with regard to illegal agreements, abuse of dominant position and state aid. It is the largest free trade agreement that the two nations have reached.

It guarantees almost total freedom of goods, services, people and capital. It also deals with competition and state subsidies and prohibits any form of discrimination on the basis of nationality, unless it is specifically provided for in the agreement. The agreement is unique for Iceland because it is the first such agreement to establish free trade in agricultural products, a sector that generally provides great protection from the Icelandic authorities.

Posted on April 9th, 2021 | filed under Uncategorized |

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