65° - 01.11.1969, Page 12

Iceland Joins EFTA
by
RORHALLUR ASGEIRSSON
The post-war development of international
trade has shown a marked trend towards pre-
ferential trading organizations and abandonment
of the most-favored-nation principle. In Europe
three organizations have emerged, the European
Economic Community, the European Free Trade
Association and the Comecon. The only European
countries which have not become a party to these
organizations and preferential trade arrange-
ments are Albania, Spain and Iceland. The ques-
tion has, therefore, often bee nasked, how long
Iceland can remain outside these arrangements
without running the risk of commercial isolation
and economic stagnation.
By the time this artiole appears, the Althing
will presumably have given an answer to that
question by passing a resolution approving Ice-
land’s accession to the EFTA on the terms and
conditions agreed upon during the recently com-
puted negotiations with EFTA. Members of the
10 year old EFTA are Austria, Denmark, Fin-
land, Norway, Portugal, Sweden, Switzerland and
the United Kingdom. Iceland’s trade with these
countries represents about 40% of its total foreign
trade.
After a thorough study of the implication of
EFTA membership to the Icelandic economy the
Althing authorized the Government to apply for
membership exactly one year ago in November
1968. Negotiations with the EFTA Council started
in January 1969 and during the first half of 1969
good progress was made in reaching an agree-
ment on most of the major multilateral points.
However, one unsettled issue stalled the negotia-
tions and that was the dispute between the Scandi-
navian countries and the United Kingdom about
the arrangements for imports of frozen fish fillets
to the United Kingdom.
The Icelandic Government made it clear from
the beginning that satisfactory arrangements for
the selling of frozen fish fillets to the United
Kingdom were an essential condition for Iceland’s
accession to the EFTA. This meant in effect that
the 10% duty which had been reinstated in
November 1969 would have to be abolished on
Nordic imports of frozen fish fillets in the United
Kingdom. Long and difficult discussions took
place between the Scandinavian and United King-
dom representatives in which Iceland also par-
ticipated. But on October 24 an understanding
between the Nordic and United Kingdom was
reached in Oslo.
According to the understanding, imports of
frozen fish fillets from the Nordic countries were
to be duty-free from January 1, 1970, but the
Nordic countries in return promised to see to it
that frozen fish fillets would not be sold to the
United Kingdom below agreed minimum prices.
These prices were generally some 10% higher
than present market prices. It was further agreed
that the minimum prices should be raised by
some 7—8% annually the next two years subject
to review and consultations in case of unforeseen
market disruption. These price-stabalization mea-
sures are expected to be beneficial to the Ice-
landic fish exports — not only to the British
market, but also to other markets. Iceland will
become a party to the understanding upon its
accession to EFTA.
After the frozen fish dispute was settled it took
only a short time to negotiate an agreement with
the EFTA Council on the other outstanding points.
At the EFTA ministerial meeting in Geneva on
bdrhallur Asgeirsson, secretary general, of the
Ministry of Commerce since 1948 studied eco-
nomics and government at Stockholm Univ.,
1937—39, and Univ. of Minnesota, 1940—42,
receiving his A.B. in 1941 and M.A. 1942. From
1958—62 he was alternate, then executive director
of the International Monetary Fund in Washing-
ton, D.C. He has been actively negotiating EFTA
possibilities in connection with the Ministry of
Commerce.
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