Further to last month's agreement in principle, Ministers of the three Member States of the EEA EFTA (Iceland, Liechtenstein and Norway) Gudlaugur Thór Thórdarson, Minister for Foreign Affairs of Iceland; Dominique Hasler, Minister of Foreign Affairs of Liechtenstein; Iselin Nybø, Minister of Industry and Trade of Norway, respectively, and Ranil Jayawardena, Minister for International Trade of the United Kingdom signed the UK- EEA EFTA Free Trade Agreement in London on 8 July 2021.
The Agreement covers all trade in goods, services and investment and includes a dedicated chapter to digital trade – a first for these European countries. Other matters of interest include capital movement, public procurement, protection of intellectual property, competition, subsidies and small and medium-sized enterprises.
Furthermore, it should be highlighted that this Agreement also contains substantial provisions in the area of trade and sustainable development, covering environmental protection, climate change and labour law. In addition, a special chapter on gender equality and women's empowerment in trade is included.
According to an official summary released by EEA EFTA Country Members the Free Trade Agreement between the United Kingdom of Great Britain and Northern Ireland and Iceland, the Principality of Liechtenstein and the Kingdom of Norway the agreement include the following main subject chapters:
- Trade in goods
- Services and investment
- Digital trade
- Capital movements
- Government procurement
- Intellectual property
- Small and medium sized enterprises
- Good regulatory practices and regulatory cooperation
- Recognition of professional qualifications
- Trade and sustainable development
- Dispute Settlement
- Institutional provisions
It should also be noted that even though there is a dedicated chapter to Investment, Investor-State Dispute Settlement mechanisms are not mentioned. So, as with the UK-Australia FTA signed last month, it can be assumed that no such a dispute settlement mechanism has been incorporated. Nonetheless, all will be revealed shortly when the full text of the agreement is disclosed.
However, while a Dispute Settlement chapter is included in the Agreement, this seemingly relates to State-to-State dispute settlement as can be inferred from the wording of the summary, which reads:
“The Chapter on Dispute Settlement sets out the rules and procedures applying with respect to the avoidance or settlement of any disputes that may arise between Parties concerning the interpretation or application of the Agreement.
If a dispute may not be solved by amicable resolution under the consultations mechanisms, the complaining party may request the establishment of an arbitration panel composed of three arbitrators. A Party to the Agreement, which is not a party to the dispute, may participate in the consultations and/or arbitration procedure.”
According to local reports, the government in Vaduz stated that this is the most far-reaching free trade agreement that Liechtenstein has ever entered into. Indeed, alongside cross-border trade in services, including financial services, it also regulates areas such as investment, protection of intellectual property, digital trade, capital movements and public procurement.
Iceland’s Minister for Foreign Affairs and International Development Cooperation, Mr. Gudlaugur Thór Thórdarson, for his part, stated that the agreement will boost economic relations and strengthen the ties between the nations even further, whilst Norway’s Minister of Trade and Industry, Ms. Iselin Nybø said the free trade agreement is ambitious and comprehensive, and will provide predictability and opportunities for businesses, investors, students and workers in the years to come.
The official press release issued by the UK Department of International Trade on this Agreement stated, inter alia, that the agreement strongly supports the UK’s ambitions as a global leader on climate and environmental protection. It preserves the UK’s right to regulate to reach our Net Zero target, promotes trade and investment to grow the low carbon economy, and addresses numerous issues related to environmental protection, including biodiversity, forestry and sustainable fisheries.
The Agreement follows on the heels of other FTAs the UK has signed with non-EU countries over the last few months, such as the UK-Switzerland FTA and UK-Australia FTA, as well as the UK’s request to formally join the CPTPP.