Chinese Premier Wen Jiabao meets with Iceland's President Olafur Ragnar Grimsson at Bessastadir, the presidential residence, in Reykjavik, on Friday. Thorvaldur Orn Kristmundsson / AFP

Fishing disputes and European politics make FTA more attractive

Ossur Skarphedinsson, foreign minister of Iceland, had long wondered about one thing - how did the Chinese, in epic expeditions by explorer Zheng He in the 15th century, manage to travel around the globe but somehow miss his home country?

Skarphedinsson acted to make a solid connection between the two countries on Friday, as he inked his name on one agreement after another with the world's second-largest economy in Reykjavik, with Icelandic prime minister Johanna Sigurdardottir and her visiting Chinese counterpart Wen Jiabao witnessing the signing ceremony.

The deals Skarphedinsson signed ranged from furthering Arctic cooperation to joining hands in marine and polar science and technology, as well as collaboration on geothermal energy and geosciences.

Wen, the first Chinese premier to visit the volcanic island since Beijing and Reykjavik forged diplomatic ties in 1971, told Sigurdardottir that China wants to complete a bilateral free trade agreement with Iceland by next year.

That reflects China's confidence in Reykjavik's development, Wen said.

Iceland was the first European country to start FTA talks with China. Hard hit by the financial crisis in 2008, Iceland - a country of just 320,000 people - turned to apply for EU membership the next year. That process required Iceland to stop free trade talks with Beijing.

But recent fishing disputes and the European Commission's involvement in a multilateral legal dispute concerning Iceland have placed pressure on Iceland to review its accession talks with the EU and resume FTA negotiations with China.

Sigurdardottir, Iceland's prime minister , said the country sees China as "a reliable friend" and applauds Chinese support in its measures against the economic meltdown.

Wang Ronghua, a former Chinese ambassador to Iceland, told China Daily that Iceland's decision to get back on track of FTA talks with China stems partly from its need to tap into the huge market in China.

"Under current conditions of no FTA with China, Icelandic high-quality fishery products suffer a comparative disadvantage in pricing when competing with other major international fishery exporters, such as Japan and the US state of Alaska," Wang said.

Iceland supports China to be an observer to the eight-member Arctic Council and take part in the peaceful exploitation and utilization of the Arctic, said the Icelandic prime minister. In his meeting with Icelandic president Olafur Ragnar Grimsson later Friday, Wen said Beijing and Reykjavik share broad common interests, and that China is willing to beef up coordination with Iceland in Arctic affairs.

Grimsson, for his part, called Wen's visit a milestone in bilateral relations and expressed hope that the two countries could seal the FTA deal as soon as possible.

The Chinese premier, who spent years studying geology and working in a provincial geology bureau, visited regions between the North American and Eurasian tectonic plates, the Golden Falls and a volcanic geyser on Saturday before having brief conversations with experts at the Hellisheidi geothermal plant.

Wen's education background in geology undoubtedly presents more highlights and shared topics to the visit, and Iceland, a leading tech power in geothermal energy, has also provided needed help to train Chinese technicians in geothermal sector, said Wang, the former ambassador.

Wen will wrap up his visit to Iceland on Sunday and head to Germany to attend the upcoming Hannover Messe, the world's leading industrial fair.

Contact the writers at huyinan@chinadaily.com.cn and zhangyunbi@chinadaily.com.cn

(China Daily 04/22/2012 page3)