Faroexpo 23 October 2020
Brexit – possibilities and challenges
Address by H.E. Gudlaugur Thor Thordarson, 
Minister for Foreign Affairs and Development Cooperation, Iceland

Brexit and the Atlantic Community

Your Excellency Minister Jenis av Rana, Mr. Mayor (Torbjörn Jacobsen), Excellencies, Ladies and Gentlemen, góðir vinir.

It is a pleasure and an honour to be invited to speak at Faroexpo. And I am very happy to be in the Faroe Islands in person at the invitation of my good friend Jenis av Rana. I have to admit that sitting at home has been a big challenge for me during the COVID pandemic. 

This is only my second trip abroad in several months. 

The overall theme of this conference is Brexit, its possibilities and challenges. So let me say a word or two about Brexit as seen from Iceland. As an island nation on the Atlantic – like the Faroes – like the UK – we have a different perspective on Europe, and maybe we have more understanding of the UK´s decision to leave the European Union and forge its own path.

Iceland has an excellent relationship with the European Union based on the European Economic Area Agreement (EEA) and thus it would never be in Iceland´s best interests to join the European Union.  Keeping control and sovereignty over our fisheries resources is, of course, a major consideration; but we also shape our own agricultural policy; we are outside monetary union giving us extra flexibility; we conduct our own trade policy allowing us to negotiate free trade agreements (e.g. with the Faroe Islands and China); but I suspect that Iceland´s national character also plays an important role. 

I am an optimist when it comes to Brexit. I often point out, especially to EU friends, that the UK will not suddenly depart its present location and end up in the South Pacific or the Indian Ocean. The UK will stay where it is – one of the closest and biggest neighbours of the EU. They will both need to find a way of living and trading together. It is in the interest of both parties, not least the EU, to find a solution. 

As for Iceland’s trade relationship with the UK, until now it has been based mainly on the EEA Agreement. The UK´s departure from the EU means that we must negotiate a new set of agreements. 

The UK is our biggest single trading partner within the EU and globally, second only to the US. We are neighbours, we have a shared history, shared values, close trading links.  So getting our new agreements right is a key objective of Icelandic foreign policy.
Work is going well, despite COVID. Along with Norway and Liechtenstein we have an agreement with the UK on its withdrawal from the EEA which mirrors the UK-EU withdrawal agreement. 

We have also hammered out a shared vision of our future relationship. In May of this year, we signed a Joint Vision Paper for 2030 on enhancing cooperation between Iceland and the United Kingdom in a wide range of areas, including trade and investment, fisheries, research and innovation, regional and international cooperation, defence and security, climate change and the Arctic as well as people to people links. 

Work is well advanced on a comprehensive Free Trade Agreement between Iceland, Norway, Liechtenstein and the UK. We aim to complete negotiations by the end of the year. This will be our platform for a dynamic trade and economic relationship. 

Fisheries is an area where Iceland and the UK can certainly increase cooperation. We already have a draft MoU in place on strengthening our cooperation in this field which we will now begin to implement. 

We have also completed negotiations on an Air Services Agreement which would enter into force once EEA rules no longer apply. This will prevent disruption to flights between Iceland and the UK (Other than those caused by the pandemic or North Atlantic winter weather!)

We are looking forward to working more closely together with the UK in international and multilateral institutions, particularly given our joint focus on areas such as gender equality, LGBTI rights and climate change.

Iceland and the UK are members of NATO. Last year Iceland and the UK signed an MoU on defence and security. This has already proved useful and we will build on it even further to secure our ties in this field. We are also looking into various matters related to police cooperation and internal security. 

Although free movement of persons will end in its present form, we will work hard to continue to support close people-to-people links between Iceland and the UK. We are looking into new agreements on social security and youth mobility as well as ensuring that student exchanges can continue. 

As we negotiate our future relationship, Iceland and the UK will look to our joint vision for 2030 as an overarching framework which cements our close friendship and cooperation and establishes what I hope will become a strategic partnership.

Our vision paper 2030 with the UK has a wider significance. Its starting point is, in my view, the UK decision to think globally and the return of the UK as a fully paid up member of the Atlantic community. 

Boris Johnson spoke at Greenwich, London in February this year of this being “the moment for the UK to think of its past and go up a gear again, to recapture the spirit of its seafaring ancestors”. And he spoke of their „mission – open, outward-looking – generous, welcoming, engaged with the world championing global free trade now when global free trade needs a global champion.”

This is a positive vision not only for the UK but also for its partners in the Atlantic community. The Atlantic gives us a shared history, it is a shared resource and it has for centuries been a road between the nations around it. The refocus that Brexit has already brought about in the UK is an opportunity for all of us in the Atlantic community. 

Iceland and the UK have centuries of history between them. In Icelandic history books we refer to the fifteenth century as the “English century”, reflecting the extent of trade at that time, with English ships a common sight on our shores. The English brought cloth, flour, beer, wine and other vital items for our population, taking back in turn stockfish and wool.  

Of course, we have had our differences with the UK, but in some ways the outcome of our various Cod Wars underlines the close connection between our two nations. We have been able to settle our differences and move forward and maintain and strengthen our relations. 

Our strategic, political and security interests remain very much aligned. The importance of the GIUK (Greenland Iceland UK gap) in strategic thinking is another illustration of how the North Atlantic binds us together. The basic principles which led the UK to stake a claim in the North Atlantic during the last war have not changed. The German U-boat peril meant that the British occupation of Iceland proved to be vital in operations conducted by Britain and its Allies to protect the North Atlantic sea lines of communication. At the same time, it laid the ground for Iceland’s future security and defence, including as a member of NATO. 

During the Cold war our strategic link remained essential. It was only after the end of the Cold War that a tendency developed of viewing the North Atlantic as an area that no longer needed minding. 

This brief respite following the Cold War is over as tensions develop globally. Evidence of heightened interest by large powers in the North Atlantic region and the Arctic are there for all to see. 

Given the complex and transnational nature of contemporary security challenges, the North Atlantic community needs to uphold its values and work together. The threats and challenges facing our community will only be addressed and managed through determined cooperation.
These challenges include climate, with widespread implications for other policy areas. This threat is prevalent in the Arctic and we can work even closer together on this issue, both in regard to our diplomatic efforts and policy making. 

Hybrid and cyber threats have perhaps never been higher on the agenda, not least because hybrid threats and cyber-attacks have soared during COVID-19.

The COVID-19 pandemic also threatens to further undermine the multilateral system and the rules-based world order, which has seldom been under as much strain as it is today. We must therefore continue developing common approaches and efforts to promote core values and principles the Atlantic community represents. 

Brexit is one of the most significant shifts in European and transatlantic geopolitics since the fall of the Berlin wall. I believe it can bring the North Atlantic community closer together.

We are like-minded nations enjoying excellent cooperation in various international fora and sharing commitments to promote a rules-based multilateral system.

This is evident in our close cooperation in the field of human rights, such as our work in the Media Freedom Coalition founded by the UK and Canada, and in the UN Human Rights Council on the situation in Xinjiang.

The Atlantic Community is tied together through our collective defence, cooperative security, and exchanges of trade. In the area of trade, I believe we can do more in the long term. We already have agreements with the Faroes, Greenland and aim to update our agreement with Canada. We hope to have a free trade agreement in place with the UK in the near future. One big gap remains, the US – I would like to see a strategic trade agreement with the US in the coming years. Then we can start thinking about how we link up all these agreements! 

So how does the title of this address relate to the Faroes and Iceland? We share centuries of history. We trace our ancestry back to Norway and to the British Isles. As a result, we share close cultural bonds – indeed no other language is as close to Icelandic as Faeroese. Don´t forget that it was Icelandic authors who wrote down and preserved the Færeyingasaga and had keen understanding for the hero Þrándur í Götu, who struggled against the oppressive authority and taxation of the Norwegian Kings. We Icelanders experienced a similar struggle. 

We have worked together in fisheries for centuries. I could point to a number of agreements between us on fisheries which could be considered beneficial for the Faroes. As modern fishing nations with sustainable utilisation as the key principle, we know that many countries look to us here in this part of the Atlantic as examples of how to maximise value in fisheries.

We look forward to working with the UK in on sustainable fisheries too, as the UK re-establishes itself as an independent fishing nation. 

Over the past years trade in goods and services has blossomed between Iceland and the Faeroes. Tourism boomed until the pandemic hit. We hope that the present crisis will be resolved soon and that we see recovery in the tourism sector. Nevertheless, back home I have underlined the need to be creative and to look to other paths for economic growth. To regain the ground lost, we need to use all the tools at our disposal.  We must increase trade and economic cooperation.  For trading nations such as ours, free, rules-based international trade is key. We must do all we can to protect free trade, which in the present international climate is under threat. 

We have a strong trading framework between us. 

The Hoyvík Agreement is by far the deepest and most comprehensive free trade agreement that either nation has concluded. Iceland gives no other country as much market access – no other country can export all its agricultural products to Iceland tariff free. The first few years following entry into force of the Agreement there was a trade surplus in Iceland’s favour but now the tables have turned and over the past three years the Faeroes have enjoyed a trade surplus with us. I would like to compliment the Faroes on grasping the opportunities which the Agreement offers. 

I believe the Hoyvik Agreement can remain a firm basis for growing economic cooperation and trade between us. I have to admit, I was relieved that the government of the Faroes took the courageous step of cancelling the notice of withdrawal at the end of last year.  Abandoning the Hoyvik Agreement would have been a very negative signal to our business communities.  It would also have given the wrong impression to the rest of the Atlantic community if two such close neighbours – cousins – were unable to make a success of trade between themselves. 

I believe we should work together in the coming months to look at ways to further strengthen our already close friendship. We have cooperation agreements on education and health. I believe we should put effort into making these agreements work on the ground. 
We already have good Consul Generals. But I want to exchange dozens of ambassadors too.   School and college years are when you make relationships for life.  If we can get young Faroese to come to Iceland for university and further education, and if we can send young Icelanders in the other direction to the Faroes, we will be creating an army of ambassadors and fostering closer relations for coming generations. 

Our two nations have always stood together at difficult times. It was second nature for us to welcome Faroese with open arms in search of work and with increased fishing quotas during your economic crisis at the end of the last century. The generous friendship of the Faroes during our financial and economic crisis ten years ago and when we experienced the avalanche tragedies in 1995 in Súðavík and Flateyri will never be forgotten by us. 
Like Gunnar á Hliðarenda, the famous Icelandic sagas hero, I must say that we value your gifts highly, but we value your friendship even more highly. Góðar eru gjafir þínar [ykkar], en meira þykir mér vert vinfengi þitt [ykkar] og sona þinna [ykkar]. We are grateful to have you as friends and I am confident that our friendship will flourish as we work together in the Atlantic community.