3.b Iceland Case Study AC

Question 1

How much of their merchandise exports is agricultural %?

Answer 1

43%

Question 2

How many people does fishing employ?

Answer 2

9,000

Question 3

How much of the exports is raw aluminium in 2017?

Answer 3

36%

Question 4

How is icelands comparative advantage utilised in an agreement with China?

Answer 4

Abundant geo thermal energy which allows for manufacturing to be cheap.

China sends over aluminium to be able to be manufactured into usable products as it is cheaper for china to outsource than paying their own costs in china.

Iceland environmental benefit acts as this comparative advantage

Question 5

How much of merchandise imports are manufactured goods?

Answer 5

67%

Question 6

Who is Iceland’s main trade partner?

Answer 6

EU - as geographically closer

Question 7

How important is tourism ?
% of imports / exports
How many visitors flow through Keflavik airport in 2020

Answer 7

50%
- 2 million

Question 8

Negotiations and agreements

Answer 8

European economic area - market access for fewer obligations
- has to take in 15-20% ofEU rules

Common fisheries policies - quota system to keep fish stocks sustainable

Trade deal with china

Question 9

How much % of EU rules does Iceland have to adopt

Answer 9

15-20%

Question 10

Economic factors contributing to strength of Iceland trade

Answer 10

• strong currency
• trade surplus
• Investment in infrastructure ( new deep water port in north)
• FDI from TNCs - Bethel aluminium plant

Question 11

Environmental factors contributing to strength of Iceland trade

Answer 11

• Natural environment - tourist attraction
• geothermal energy - cheap to power industry
• 200 nautical mile fishing zone
• finnafjord harbour deep water port being able to be used due to climate change

Question 12

Political factors contributing to strength of Iceland trade

Answer 12

• stable democratic government
• redeem from EU
  *

Question 13

Social factors contributing to strength of Iceland trade

Answer 13

• highly skilled and educated work force

Question 14

Opportunities

Answer 14

• tourism is a growth area - job creation
• creative industry 6% of labour force - greater turnover than agricultural / fisheries
• cheap energy allowing for heavy industry ( smelting plants / china )

Question 15

Challenges

Answer 15

• tourism dominated in southern region - wealth is’t evenly spread
• environmental damage from tourism which impacts natural beauty
• exclusion from EU means other trade deals need to be made ( less bargaining power)