When Denmark joined the European Economic Community, the current European Union, in 1973, the Faroe Islands had the opportunity to stay away. Like other communities dependent on fishing, the Faroe Islands have not found it in their interest to be subject to the common fisheries policy. As a result, the Faroe Islands are considered third countries within the framework of the EU. Formal relations between the parties are governed by two bilateral agreements: the meeting of the committee – within the framework of the agreement linking the Faroe Islands to Horizon 2020 The Faroe Islands have concluded a free trade agreement with the three EFTA countries, Norway, Iceland and Switzerland This agreement will allow the annual fisheries negotiations to take place this year for the benefit of our fishing industry. The United Kingdom today signed a fisheries framework agreement with the Faroe Islands. This is the second coastal state agreement negotiated since the UK`s exit from the EU and follows the UK-Norway Fisheries Treaty, signed on 30 September 2020 by Environment Minister George Eustice. Fishing, which accounts for 90% of Faroese exports, is also a major concern. As such a large part of their economy, the islands do not want decisions on this to be made so far away, as they would have so little say in the EU due to their small population. [16] As members of the EU, they should, in accordance with the Common Fisheries Policy, cede large quotas of fish in their own waters to other EU countries. The agreement contains principles that demonstrate the common will of the United Kingdom and the Faroe Islands to cooperate as independent coastal states and to seek effective and sustainable management of their fisheries.

Trade opportunitiesAs mentioned above, the free trade agreement has a large volume of products, but does not cover free trade in services, capital and people. The Faroe Islands have free trade agreements with Iceland, Norway and Switzerland. In addition, the Faroe Islands have also concluded a most-favoured-nation agreement with the Russian Federation. Overall, the Faroe Islands are well placed to develop international trade, particularly in the fishing industry. The Faroese government has been working closely with industry since the first free trade agreement was concluded about fifteen years ago. .