The relationship between Vietnam and Iceland

The Socialist Republic of Vietnam and the Republic of Iceland have established diplomatic relations since 5 August 1973. The bilateral relations between the two countries have always been maintained cordially.
The two sides exchanged a number of high-level visits: Prime Minister Vo Van Kiet visited Iceland in June 1995; Prime Minister Phan Van Khai visited Iceland in September 2002; Prime Minister of Iceland visited Vietnam in April 2002; Deputy Prime Minister Hoang Trung Hai visited Iceland in September 2011.

On November 4, 2015, the President of Iceland – Ólafur Ragnar Grímsson paid an official visit to Vietnam. This visit was a crucial turning point in bilateral relations, paving the way for the two nations to realize their full cooperative potential.

The two nations have signed the Double Tax Avoidance Agreement, the Agreement on Investment Promotion and Protection, the Agreement on Air Transport, and the “Declaration of Mutual Benefits Facilitating Trade”. However, trade relations between Vietnam and Iceland remain limited, and trade turnover is relatively small.

Vietnam and the European Free Trade Area (EFTA) nations, including Iceland, are in the process of negotiating a Free Trade Agreement in an effort to enhance collaboration and investment. The majority of the Vietnamese population in Iceland resides in Reykjavik, enjoys a secure lifestyle and work, and is well integrated with the host nation. Some have employment in Iceland, while others are self-employed.

Economic and trade relations between Vietnam and Iceland

Presently, commercial links between the two nations remain minimal, and import-export volume is still modest. The two-way trade turnover reached $6 million in 2014 and 9 million USD in the first six months of 2015. Vietnam’s primary exports to Iceland are timber, textiles, veggies, etc. To Vietnam, Iceland mostly exports raw seafood resources and some machinery.

In recent years, Iceland’s economy has turned significantly toward the manufacturing and service industries, software development, biotechnology, financial services, and tourism.

In 2019, Iceland’s overall import-export turnover was 11.79 billion USD, comprised of 5.23 billion USD in exports and 6.56 billion USD in imports. Major imports: machinery, gasoline, transportation vehicles, furnishings, medicines, and plastics products.

Trade agreements signed between Vietnam and Iceland

April 2002: The Double Tax Avoidance Agreement (DTAA)
September 2002: Investment Promotion and Protection Agreement
September 2011: Air Transport Agreement

Bilateral trade of Vietnam with Iceland

Exports: 45.062 USD
Imports: 2.181 USD
Exports: 29.716 USD
Imports: 7.949 USD