A Meeting of Korean Companies in Seoul/Pusan

A Meeting of Korean Companies in Seoul/Pusan
Address by H.E. Mr. Halldór Ásgrímsson, Minister for Foreign Affairs and External Trade of Iceland
August 28-30, 1996


Ladies and gentlemen,

I would like to thank you for this opportunity to address the Korean business community at this meeting in Seoul/Pusan and would like to start by introducing the Icelandic delegation:

Mr. Hjálmar W. Hannesson, the Ambassador of Iceland to Korea.

Mr. Stefán Lárus Stefánsson, Minister Counsellor, Trade Dept., Ministry for Foreign Affairs.

Mr. Atli Freyr Guðmundsson, Director, Ministry of Industry and Commerce.

From the Trade Council of Iceland Mr. Jón Ásbergsson, Managing Director and Mr. Thorgeir Pálsson, Director of the Fisheries Department.

Mr. Ingi G. Ingason, Director of the Invest in Iceland Bureau.

Mr. Björn Ingi Stefánsson, Technological Institute of Iceland.

Mr. Gísli Gudmundsson, Consul General of Korea in Iceland, and Director General of the importing firm B and L.

Mr. HAI HYUNG CHO, Consul General of Iceland in Korea.

Turning to the private sector delegation I would first like to introduce:

Mr. Jón Ásbjörnsson, the President of the Association of Icelandic Importers, Exporters and Wholeasale Distributors.

Mr. Jón Magnússon, Icelandic Freezing Plants Corporation which is the largest exporter of seafood products from Iceland.

Mr. Björn Á. Pétursson from Iceland Seafood International, which is the second largest exporter of seafood products from Iceland.

Mr. Gudmundur Gunnarsson from the company Hampiðjan Limited, a producer of bottom and midwater trawls.

Mr. Lárus Ásgeirsson from Marel Limited which is a producer of weighing and vision systems for fish, poultry, and the red meat industry.

Mr. Thorstein Sigurðsson from Borgarplast Limited, a manufacturer of insulated tubs for the food industry.

Mr. Holberg Másson and Mr. Thórarinn Stefánsson from Netverk Limited, a software company specialising in messaging systems.

Mr. H. Tómas Ragnarsson of Traffic Software, developer of fax management software.

Mr. Ásgeir Ásgeirsson of Valeik Limited, exporter of salted and dried fish.

Mr. Thórir Matthíasson from Saeplast Limited, a manufacturer of insulated plastic tubs for the food industry.

Mr. Sigurdur Thórdarson from Edalvörur Limited, importer of Korean Ginseng to Scandinavia.

Mr. Örn Erlingsson from Sólbakki/Saltver, vessel owner and fish processor.

Ladies and Gentlemen,

Iceland is slightly larger than Korea, about 103 thousand square kilometers, situated in the North-Atlantic and the second largest island in Europe. Comparing our population size is a totally different matter altogether since Iceland's population is about 265 thousand people making Iceland the most sparsely populated country in Europe. The present average density is 2.5 inhabitants per square kilometre.

Both Iceland and Korea have been among the leading countries in the fisheries sector with Korea catching about 3.0 million tons of fish and Iceland catching around 2.0 million tons of fish.

A high standard of living has been achieved in the post-war period, with per capita Gross Domestic Product (GDP) standing at about US $22.500. The fishing industry, including both fisheries and fish-processing, has been the driving force behind this development. It presently provides for around 20 per cent of GDP, occupies around 11 per cent of the work force, and generated 76 per cent of merchandise exports in 1994.

The forecast level for economic growth is 4.5 per cent for 1996. Iceland has managed to maintain a low inflation rate the last few years, about 1-2 per cent a year, and a very stable economy.

Iceland has abundant energy resources. Only a small fraction of these vast hydro electric and geothermal resources has been exploited so far. The potential for large scale development of power-intensive industry is therefore substantial. Industrial expansion has to a considerable extent relied on these energy resources and their attractiveness for power-intensive industries, aided by tariff-free access to the European market.

After fishing and fish processing, manufacturing has become the second most important sector in the economy. It contributes about 13 per cent of GDP. There has been a rapid growth of various high-technology industries in recent years, particularly in the production of equipment and advanced machinery for fishing and fish processing.

The export of software has grown rapidly in the last years and Icelandic computer specialists have been gaining international recognition. Around 4% of Iceland's GDP comes from the computer sector, which is similar to the European Union. This figure is expected to double in the next decade so the prospects are good for the Icelandic software industry .

Dear guests,

Iceland is highly dependant on foreign trade. The relatively large share of foreign trade is due to the high productivity of the main export industry, fisheries. Most manufactured goods, raw materials, grains and fuel have to be imported. Imports have amounted to about 40 per cent of GNP. Because of the importance of foreign trade, a liberal trade policy is naturally in Iceland's interest.

Iceland became a Contracting Party to the GATT in 1968 and a founding member of World Trade Organization (WTO) as well as Organization on Economic Cooperation and Development (OECD). Iceland is not a member of the European Union (EU) but has since 1994 had an agreement with the EU on the free flow of goods, services, capital and people. Iceland is a member of NATO and has since 1951 had a bilateral defence agreement and very close ties with the United States.

Iceland has for many years had very close links with the other Nordic countries, Norway, Sweden, Denmark and Finland. Nordic cooperation is extensive and far-reaching in various fields, including trade and economy. A passport union, a common labour market and harmonization of various legislation are but a few examples.

Although close commercial cooperation with the European Union and United States has been prosperous, Iceland has been rapidly developing its trade in Asia with increased emphasis on Korea.

I would now like to turn to the bilateral situation between Iceland and Korea. The relations between Iceland and Korea are fairly recent. It was not until 1962 that our
countries established diplomatic relations. The first Korean honorary consul in Iceland was appointed in 1970 and Iceland was fortunate to enlist the services of our current honorary consul general in 1977. During these past thirty-four years since diplomatic relations were begun contacts between officials of both countries have been quite frequent.

The bilateral trade between Iceland and Korea has steadily been increasing over the past four years. This is a very positive development. The Icelandic business community is convinced that there is great potential in increasing trade relations with Korea. That is in evidence here today because this is the biggest trade delegation that has participated in a official visit of an Icelandic Cabinet Minister. In years past it was the custom when visiting far away countries to mention in official speeches the distance between the countries in question. In today's modern world distance has become relative due to innovations in computer software technology, communications and transport. Distance is therefore not the same obstacle in business as before.

The Icelandic companies represented here today cover most of the areas where Icelandic commerce and know-how have excelled. I am especially referring to fisheries, fishing gear and technology as well as marketing of fisheries products. Companies leading in the field of computer software technology are also represented here. These companies have made their presence felt in this highly competitive market all over the world. Icelandic importers of Korean goods have been quite successful in their marketing, by any standards, which is reflected in our negative balance of trade. One can say that they have been too successful.

In conclusion, Ladies and Gentlemen, I am convinced that this visit will mark the beginning of increased and flourishing trade between our countries.

Thank you.