Free Trade Aims to Strengthen a Friendship over Fish

Fishing boats at the Faroe Islands village of Fuglafjordur.

They may be unlikely allies, but Russia and the Faroe Islands have one major element in common: fish, and a lot of it.

In just four years, the Faroe Islands have more than trebled their fish exports to the country to become its top foreign fish supplier.

And now, the tiny archipelago nation is hoping to cement its spot at number 1 with a free trade deal with Russia from next year.

The partnership between the Faroe Islands and Russia began in 2014 when both nations faced outside barriers to trade.

For Russia, its annexation of Crimea lead to economic sanctions. Meanwhile for the Faroe Islands, with its population of about 50,000 people, disputes over fishing quotas with the European Union also lead to penalties.

Foreign and Trade Minister Poul Michelsen told Reuters on Tuesday that the sanctions led to issues for the Faroe Islands, which are an autonomous country within the Kingdom of Denmark.

“(That) created major difficulties for our economy. This was when Russia came to the rescue and greatly increased purchases with us,” he said.

As the Faroe Islands are an independent nation outside of the EU, located about 300 kilometres north of Scotland, trade between the two nations was possible. Soon after the sanctions were laid in 2014, Faroese Prime Minister Kaj Leo Johannesen went to Moscow to negotiate a deal.

Since then, fish trade between the islands and Russia has boomed.

In 2013, fish trade between the archipelago nation and Russia totaled $110 million USD annually. By last year, the figure had rocketed to about $375 million USD annually.

The Faroe Islands are now the top fish exporter to Russia, overtaking Chile, China and Iceland.

Clearly, the Russian relationship means big business for the Faroe Islands. For example, the nation’s economy grew almost 7 per cent in 2016 on the back of farmed salmon exports.

Michelsen said he aimed to sign a final free trade agreement in 2019 with Russia and the remaining countries in the Eurasian Economic Union (EEU).

“Thereby our exports of fish to Russia which now amount to roughly 2.4 billion Danish crowns ($380 million) a year would be formalized, allowing us to maintain this level for a longer period,” he said.

The minister said he aims to kick off free trade talks with EEU members Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan after signing a declaration of intent in August.

leave a reply