Press release: Openness and specialization have led to high
1. This third Trade Policy Review of Iceland has been highly
informative, providing us with valuable insights into the trade
policies and practices underpinning Iceland's economic success story.
We owe this to the participation of Ambassadors Johannsson, Sigurdsson
and Arnason and the rest of the Icelandic delegation, the very
thoughtful interventions by Mr. Ehlers, and the active involvement of
Members. Throughout the review process, the authorities of Iceland
have shown a strong commitment to transparency and thus made a key
contribution to the success of this Review.
2. Members commended Iceland's impressive economic performance and
export diversification since its last Review in 2000. They noted that
this could be attributed in great part to Iceland's generally open
trade regime, a continuous process of structural reforms as well as
its specialization and close integration in the global economy. Some
Members pointed to the short-term challenges currently facing the
Icelandic economy, including the large current account deficit, but
also pointed out that it remains one of the world's most competitive.
3. Iceland acknowledged that a strong multilateral trading system is
of particular importance for smaller Members like itself. Members
appreciated Iceland's active participation in the WTO, as reflected by
its leadership role in the on-going negotiations on fisheries
subsidies, and the valuable contribution made by its representatives
to the work of WTO bodies. They also highlighted the growing number of
preferential trade initiatives entered into or under consideration by
Iceland, which Iceland sees as complementary to the multilateral
system. Some Members were concerned about restrictions affecting
investment from non-EEA or non-OECD countries, and invited Iceland to
reconsider them, and to secure any future reforms in the WTO. Iceland
indicated that work was under way to prepare a review of its
legislation on inward direct investment.
4. Iceland was praised for not having had recourse to contingency
measures, and its accession to the Government Procurement Agreement
was welcomed. Members urged Iceland to carry on the process of reform
of its trade regime, including by reducing high tariffs, binding all
of its industrial tariffs, and closing the gap between bound and
applied rates. Members encouraged Iceland to complete outstanding WTO
notifications, which Iceland engaged to do as appropriate. Iceland
provided clarification on a range of intellectual property issues, as
well as on its SPS regime.
5. Iceland drew attention to the difficulties it faces in agricultural
production, and Members acknowledged Iceland's efforts to gradually
align its policies with market-based solutions. However, they also
noted that Iceland's agriculture continues to be heavily supported,
which imposes a cost on taxpayers and consumers and may affect trade.
Members thus urged Iceland to continue its reform efforts in this
area, with Iceland stating that it expected the completion of the DDA
to result in the further restructuring of its agricultural sector.
6. Members noted the importance of the services sector in Iceland.
Iceland was commended for its programme of privatization and
liberalization, in particular in the areas of financial services and
telecommunications, and was encouraged to expand the scope of its GATS
7. In conclusion, I believe that Iceland offers an excellent
real-world example of how small island economies may overcome the
limitations of size and location by engaging in structural reforms and
taking advantage of international specialization. Members encouraged
Iceland to carry out its own liberalization efforts on an MFN basis to
help broaden its economic relations. Members also greatly appreciated
Iceland's strong commitment to the multilateral trading system, and
invited it to continue playing an active and constructive role to
ensure a successful conclusion of the DDA.