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Trade and Economic Security

Iceland

EU trade relations with Iceland. Facts, figures and latest developments.

Country or region
  • Iceland
Trade topics
  • Negotiations and agreements
  • Trade policy

Iceland's economic and trade relations with the EU are mainly governed by the European Economic Area (EEA) agreement.

The European Economic Area extends the laws of the single market (except for agriculture and fisheries laws) to the European Economic Area countries.

This means that Iceland is legally bound to implement EU directives and regulations on the free movement of goods, persons, services and capital.

Trade picture

  • The EU is Iceland's biggest trading partner, representing 52.3% of Iceland's total trade in goods in 2024.
  • The EU is Iceland's biggest export market, representing 62.5% of Iceland's total exports.
  • Iceland primarily exports non-ferrous metals and fish to the EU.
  • The EU is Iceland's biggest source of imports, with a share of 45.1% of Iceland's total imports.
  • Trade in services with Iceland grew by 25% from 2022 to 2023 - with a small deficit for the EU in 2023. 

The EU and Iceland

As a member state of the European Economic Area (EEA), Iceland fully applies EU laws about the four freedoms (free movement of goods, persons, services and capital), along with laws related to other areas of EU and EEA cooperation.

As a result, the EEA agreement creates a lot of economic integration, common competition rules, rules for state aid and government procurement between Iceland and the EU.

Agriculture and fisheries are not covered by the EEA agreement. However the agreement emphasises the commitment of the parties to a gradual opening up of agricultural trade, which is done by concluding separate agreements. The latest agreement on agricultural products, concluded on the basis of Article 19 of the EEA, is from 2017. 

As a member of the European Free Trade Association (EFTA), Iceland seeks to conclude bilateral free trade agreement in the so-called EFTA framework. This means that Switzerland, Norway, Iceland and Liechtenstein can negotiate a free trade agreement with a respective third country via EFTA.

Trading with Iceland