New agreements inked between China and Europe:

Iceland Is First in Europe to Sign Free Trade Pact With China

Iceland became the first European country to sign a free trade agreement with China in a bid to sell its expertise in geothermal energy to the $7.3 trillion Asian economy. Iceland’s Foreign Minister Ossur Skarphedinsson signed the deal with Commerce Minister Gao Hucheng in Beijing yesterday, bringing to a close six years of talks, according to Iceland’s Foreign Ministry.

“It’s important for Iceland to conclude pacts like this to strengthen trade following the economic collapse,” Sigurdardottir said in an interview. The free trade agreement will “increase the soundness of business transactions and presumably the interest among Chinese and Icelandic companies that are cooperating” in geothermal power.

The volcanic island gets about 25 percent of its power from geothermal sources and the rest from hydropower. It wants to sell that expertise to diversify sales, given marine products now account for 90 percent of Iceland’s exports to China.

More from this article in Bloomberg.

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Premier Li Keqiang and Icelandic Prime Minister Johanna Sigurdardottir in Beijing on April 15, 2013 to sign the agreement. The meeting marked the start of a five-day visit to China by the Icelandic PM that highlights her country’s attempts to diversify their economy .

The China-Iceland free trade pact will lower tariffs on a range of goods and is expected to boost seafood and other exports from the remote Nordic state to the world’s second-largest economy.

Trade between China and Iceland rose 21.1pc last year to $180m (£117m), according to the Chinese Ministry of Foreign Trade. Iceland exports mostly fish to China and imports Chinese products from ships to shoes. Ms Sigurdardottir has been keen to push Icelandic services and the island’s geothermal energy potential.

For China, Iceland has unique importance as it attempts to gain a foothold in the Arctic, where melting ice is opening passages for shipping and could create a boom in extraction of resources such as gas, oil, diamonds, gold and iron.

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