Iceland–Mexico relations
Encyclopedia
Icelandic-Mexican relations refer to bilateral relations between the Iceland
and the Mexico
. Iceland and Mexico established diplomatic relations on March 24, 1964. Iceland has a non resident ambassador in Washington D.C., Mexico has a non resident ambassador in Copenhagen
, Denmark
. Since then the Icelandic Embassy in Washington D.C. has also served as the Icelandic Embassy for Mexico, in addition to three consulates located within Mexico in Campeche
, Guaymas
and Mexico City
. The Mexican Embassy in Denmark serves as the Mexican Embassy to Iceland, with a consulate in Reykjavík
. In 2008 Felipe Calderón
said: "Our two countries joined forces under the United Nations
to codify the new Law of the Sea
and, in particular, work closely to achieve the Exclusive Economic Zone
."
Iceland and Mexico collaborate over a number of shared interests; in 2001 they reached an agreement on agriculture, signed in Mexico City on November 27, 2000, and effective on October 1, 2001. In 2005 they signed an agreement for the promotion and mutual protection of investments, which was signed in Mexico City
on June 24, 2005, and has been in force since April 28, 2006.
On October 24, 2007 Albert Jónsson, the Iceland ambassador to Mexico presented his diplomatic credentials
at the National Palace
in Mexico City
. After the ceremony, Felipe Calderón
and Jónsson discussed the current state of Icelandic-Mexico relations. Both want to strengthen bilateral trade
and Calderón wanted to cooperate on energy and fishing rights.
Ólafur Ragnar Grímsson
, the President of Iceland
and Felipe Calderón
, the President of Mexico
met in March 2008. This was the first time a President of Iceland had made a state visit to Mexico.
Thorgerdur Katrín Gunnarsdóttir, Iceland's Minister of Education, Science and Culture
accompanied the president and Iceland's first lady on trip. Also attending were members of the Icelandic Ministry of Foreign Affairs, and the Presidential Office, as well as a trade delegation.
Ólafur Ragnar Grímsson addressed the people of Mexico on March 11, 2008, saying:
The two leaders discussed common ground, including concerns over climate change
, since both nations are directly affected by the Gulf Stream
. Also in 2008 the two nations signed a tax treaty
to avoid double taxation
. The agreement to abolish double taxation was signed by Agustín Carstens
, the Mexican Minister of Finance; and the Minister of Education, Science and Culture
of Iceland, Thorgerdur Katrín Gunnarsdóttir.
They also signed a treaty on geothermal energy, and one abolishing visas for diplomats.
Roberto del Toro and Mario Alberto Gutierrez of PriceWaterhouseCoopers
explain the tax consequences of the double taxation
treaty: "Holders of less than 10% of a company's shares would be subject to a 5% withholding tax
on dividend
s, with 15% withholding on all other dividends; withholding on interest and royalties would be 10%. A protocol to the agreement states that the contracting countries make use of provisions of their local laws relating to thin capitalisation
; furthermore, interest from back-to-back loan
s will not be benefit with the treaty provisions."
During the meeting Mexico agreed to support the nomination of Iceland as a nonpermanent member of the United Nations Security Council
for the 2009–2010 assembly. The Icelandic Government agreed to nominate Mexico for a position on the council. They also agreed to begin negotiations on an agreement for air transportation between the two countries. On the trip Olafur Ragnar Grimsson
gave an interview to Organización Editorial Mexicana
and said that "geothermal energy has a future in Mexico."
As of April 2009, Iceland is one of only 37 countries with which Mexico has a tax treaty and one of only 22 where an agreement for a broad exchange of information has been signed.
. 2008 bilateral trade was 9.2 million dollars for Mexico. Mexico's exports to Iceland were: metal tubes with threaded ends (46.0%), motor vehicles (18.7%), and lactic acid
(2.0%). The major imports from Iceland to Mexico were: cod liver oil
(4.6%), gutted fish
(3.1%) and roe
(2.8%).
Iceland
Iceland , described as the Republic of Iceland, is a Nordic and European island country in the North Atlantic Ocean, on the Mid-Atlantic Ridge. Iceland also refers to the main island of the country, which contains almost all the population and almost all the land area. The country has a population...
and the Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
. Iceland and Mexico established diplomatic relations on March 24, 1964. Iceland has a non resident ambassador in Washington D.C., Mexico has a non resident ambassador in Copenhagen
Copenhagen
Copenhagen is the capital and largest city of Denmark, with an urban population of 1,199,224 and a metropolitan population of 1,930,260 . With the completion of the transnational Øresund Bridge in 2000, Copenhagen has become the centre of the increasingly integrating Øresund Region...
, Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
. Since then the Icelandic Embassy in Washington D.C. has also served as the Icelandic Embassy for Mexico, in addition to three consulates located within Mexico in Campeche
Campeche
Campeche is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. Located in Southeast Mexico, it is bordered by the states of Yucatán to the north east, Quintana Roo to the east, and Tabasco to the south west...
, Guaymas
Guaymas
Guaymas is a city and municipality located in the southwest part of the state of Sonora in northwestern Mexico. The city is located 117 km south of the state capital of Hermosillo, and 242 miles from the U.S. border, and is the principal port for the state. The municipality is located in the...
and Mexico City
Mexico City
Mexico City is the Federal District , capital of Mexico and seat of the federal powers of the Mexican Union. It is a federal entity within Mexico which is not part of any one of the 31 Mexican states but belongs to the federation as a whole...
. The Mexican Embassy in Denmark serves as the Mexican Embassy to Iceland, with a consulate in Reykjavík
Reykjavík
Reykjavík is the capital and largest city in Iceland.Its latitude at 64°08' N makes it the world's northernmost capital of a sovereign state. It is located in southwestern Iceland, on the southern shore of Faxaflói Bay...
. In 2008 Felipe Calderón
Felipe Calderón
Felipe de Jesús Calderón Hinojosa is the current President of Mexico. He assumed office on December 1, 2006, and was elected for a single six-year term through 2012...
said: "Our two countries joined forces under the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
to codify the new Law of the Sea
Law of the sea
Law of the sea may refer to:* United Nations Convention on the Law of the Sea* Admiralty law* The Custom of the Sea...
and, in particular, work closely to achieve the Exclusive Economic Zone
Exclusive Economic Zone
Under the law of the sea, an exclusive economic zone is a seazone over which a state has special rights over the exploration and use of marine resources, including production of energy from water and wind. It stretches from the seaward edge of the state's territorial sea out to 200 nautical...
."
History
Iceland and Mexico established diplomatic relations on March 24, 1964.Iceland and Mexico collaborate over a number of shared interests; in 2001 they reached an agreement on agriculture, signed in Mexico City on November 27, 2000, and effective on October 1, 2001. In 2005 they signed an agreement for the promotion and mutual protection of investments, which was signed in Mexico City
Mexico City
Mexico City is the Federal District , capital of Mexico and seat of the federal powers of the Mexican Union. It is a federal entity within Mexico which is not part of any one of the 31 Mexican states but belongs to the federation as a whole...
on June 24, 2005, and has been in force since April 28, 2006.
On October 24, 2007 Albert Jónsson, the Iceland ambassador to Mexico presented his diplomatic credentials
Diplomatic credentials
Diplomatic credentials are documents presented by foreign ambassadors and ministers to the chief of state of the host government. The documents, which follow a standard text, identify the diplomats as representatives of their governments and empowered to speak for them.According to diplomatic...
at the National Palace
National Palace (Mexico)
The National Palace, or Palacio Nacional in Spanish), was the seat of the federal executive in Mexico. It is located on Mexico City's main square, the Plaza de la Constitución...
in Mexico City
Mexico City
Mexico City is the Federal District , capital of Mexico and seat of the federal powers of the Mexican Union. It is a federal entity within Mexico which is not part of any one of the 31 Mexican states but belongs to the federation as a whole...
. After the ceremony, Felipe Calderón
Felipe Calderón
Felipe de Jesús Calderón Hinojosa is the current President of Mexico. He assumed office on December 1, 2006, and was elected for a single six-year term through 2012...
and Jónsson discussed the current state of Icelandic-Mexico relations. Both want to strengthen bilateral trade
Bilateral trade
Bilateral trade or clearing trade is trade exclusively between two states, particularly, barter trade based on bilateral deals between governments, and without using hard currency for payment...
and Calderón wanted to cooperate on energy and fishing rights.
Ólafur Ragnar Grímsson
Ólafur Ragnar Grímsson
Ólafur Ragnar Grímsson is the fifth and current President of Iceland. He has served as President since 1996; he was unopposed in 2000, re-elected for a third term in 2004, and re-elected unopposed for a fourth term in 2008. He is the longest-serving left-wing president in the history of...
, the President of Iceland
President of Iceland
The President of Iceland is Iceland's elected head of state. The president is elected to a four-year term by universal adult suffrage and has limited powers. The president is not the head of government; the Prime Minister of Iceland is the head of government. There have been five presidents since...
and Felipe Calderón
Felipe Calderón
Felipe de Jesús Calderón Hinojosa is the current President of Mexico. He assumed office on December 1, 2006, and was elected for a single six-year term through 2012...
, the President of Mexico
President of Mexico
The President of the United Mexican States is the head of state and government of Mexico. Under the Constitution, the president is also the Supreme Commander of the Mexican armed forces...
met in March 2008. This was the first time a President of Iceland had made a state visit to Mexico.
Thorgerdur Katrín Gunnarsdóttir, Iceland's Minister of Education, Science and Culture
Ministry of Education, Science and Culture (Iceland)
The Icelandic Ministry of Education, Science and Culture is a cabinet-level ministry divided into three departments: the Department of Education, the Department of Science and the Department of Cultural Affairs. Since 1 February 2009, the minister is Katrín Jakobsdóttir of the Left-Green Movement....
accompanied the president and Iceland's first lady on trip. Also attending were members of the Icelandic Ministry of Foreign Affairs, and the Presidential Office, as well as a trade delegation.
Ólafur Ragnar Grímsson addressed the people of Mexico on March 11, 2008, saying:
In this new century, mankind eagerly seeks and requires leadership born of the same qualities, searching for solutions to the most fundamental challenge of our times, the threat of climate change, which is so evident in the melting of the ice sheets and the glaciers and the rising sea levels all over the world. Due to the Gulf Stream, Mexico and Iceland are closely linked in this endeavour. Flowing from Mexico into the North–Atlantic, the Gulf Stream encircles my country and constitutes the core of the conveyor belt of ocean currents which in every continent regulates the climate. Cooperation between our countries is therefore both urgent and is endowed with symbolic value, reminding us how all nations now share a common fate, but also demonstrating to others new ways towards solutions. ...
The two leaders discussed common ground, including concerns over climate change
Climate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
, since both nations are directly affected by the Gulf Stream
Gulf Stream
The Gulf Stream, together with its northern extension towards Europe, the North Atlantic Drift, is a powerful, warm, and swift Atlantic ocean current that originates at the tip of Florida, and follows the eastern coastlines of the United States and Newfoundland before crossing the Atlantic Ocean...
. Also in 2008 the two nations signed a tax treaty
Tax treaty
Many countries have agreed with other countries in treaties to mitigate the effects of double taxation . Tax treaties may cover income taxes, inheritance taxes, value added taxes, or other taxes...
to avoid double taxation
Double taxation
Double taxation is the systematic imposition of two or more taxes on the same income , asset , or financial transaction . It refers to taxation by two or more countries of the same income, asset or transaction, for example income paid by an entity of one country to a resident of a different country...
. The agreement to abolish double taxation was signed by Agustín Carstens
Agustín Carstens
Agustín Guillermo Carstens Carstens is a Mexican economist who has served as Governor of the Bank of Mexico since and was recently seeking to replace Dominique Strauss-Kahn as managing director of the International Monetary Fund...
, the Mexican Minister of Finance; and the Minister of Education, Science and Culture
Ministry of Education, Science and Culture (Iceland)
The Icelandic Ministry of Education, Science and Culture is a cabinet-level ministry divided into three departments: the Department of Education, the Department of Science and the Department of Cultural Affairs. Since 1 February 2009, the minister is Katrín Jakobsdóttir of the Left-Green Movement....
of Iceland, Thorgerdur Katrín Gunnarsdóttir.
They also signed a treaty on geothermal energy, and one abolishing visas for diplomats.
Roberto del Toro and Mario Alberto Gutierrez of PriceWaterhouseCoopers
PricewaterhouseCoopers
PricewaterhouseCoopers is a global professional services firm headquartered in London, United Kingdom. It is the world's largest professional services firm measured by revenues and one of the "Big Four" accountancy firms....
explain the tax consequences of the double taxation
Double taxation
Double taxation is the systematic imposition of two or more taxes on the same income , asset , or financial transaction . It refers to taxation by two or more countries of the same income, asset or transaction, for example income paid by an entity of one country to a resident of a different country...
treaty: "Holders of less than 10% of a company's shares would be subject to a 5% withholding tax
Withholding tax
Withholding tax, also called retention tax, is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government. In most jurisdictions, withholding tax applies to employment income. Many jurisdictions also require...
on dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
s, with 15% withholding on all other dividends; withholding on interest and royalties would be 10%. A protocol to the agreement states that the contracting countries make use of provisions of their local laws relating to thin capitalisation
Thin capitalisation
A company said to be thinly capitalised when its capital is made up of a much greater proportion of debt than equity, i.e. its gearing, or leverage, is too high...
; furthermore, interest from back-to-back loan
Back-to-back loan
A Back-to-back loan is a loan agreement between entities in two countries in which the currencies remain separate but the maturity dates remain fixed. The gross interest rates of the loan are separate as well and are set on the basis of the commercial rates in place when the agreement is...
s will not be benefit with the treaty provisions."
During the meeting Mexico agreed to support the nomination of Iceland as a nonpermanent member of the United Nations Security Council
United Nations Security Council
The United Nations Security Council is one of the principal organs of the United Nations and is charged with the maintenance of international peace and security. Its powers, outlined in the United Nations Charter, include the establishment of peacekeeping operations, the establishment of...
for the 2009–2010 assembly. The Icelandic Government agreed to nominate Mexico for a position on the council. They also agreed to begin negotiations on an agreement for air transportation between the two countries. On the trip Olafur Ragnar Grimsson
Ólafur Ragnar Grímsson
Ólafur Ragnar Grímsson is the fifth and current President of Iceland. He has served as President since 1996; he was unopposed in 2000, re-elected for a third term in 2004, and re-elected unopposed for a fourth term in 2008. He is the longest-serving left-wing president in the history of...
gave an interview to Organización Editorial Mexicana
Organizacion Editorial Mexicana
Organizacion Editorial Mexicana, also known as OEM, is the largest Mexican print media company and the largest newspaper company in Latin America. The company owns a large newswire service, it includes 70 Mexican daily newspapers, 24 radio stations, 1 tv channel and 44 websites.Organización...
and said that "geothermal energy has a future in Mexico."
As of April 2009, Iceland is one of only 37 countries with which Mexico has a tax treaty and one of only 22 where an agreement for a broad exchange of information has been signed.
Trade
In 2008, Iceland was ranked 118th in total trade with Mexico and was ranked 4th among the countries of European Free Trade AssociationEuropean Free Trade Association
The European Free Trade Association or EFTA is a free trade organisation between four European countries that operates parallel to, and is linked to, the European Union . EFTA was established on 3 May 1960 as a trade bloc-alternative for European states who were either unable to, or chose not to,...
. 2008 bilateral trade was 9.2 million dollars for Mexico. Mexico's exports to Iceland were: metal tubes with threaded ends (46.0%), motor vehicles (18.7%), and lactic acid
Lactic acid
Lactic acid, also known as milk acid, is a chemical compound that plays a role in various biochemical processes and was first isolated in 1780 by the Swedish chemist Carl Wilhelm Scheele. Lactic acid is a carboxylic acid with the chemical formula C3H6O3...
(2.0%). The major imports from Iceland to Mexico were: cod liver oil
Cod liver oil
Cod liver oil is a nutritional supplement derived from liver of cod fish. It has high levels of the omega-3 fatty acids, EPA and DHA, and very high levels of vitamin A and vitamin D. It is widely taken to ease the symptoms of arthritis and for other health benefits...
(4.6%), gutted fish
Fish
Fish are a paraphyletic group of organisms that consist of all gill-bearing aquatic vertebrate animals that lack limbs with digits. Included in this definition are the living hagfish, lampreys, and cartilaginous and bony fish, as well as various extinct related groups...
(3.1%) and roe
Roe
Roe or hard roe is the fully ripe internal egg masses in the ovaries, or the released external egg masses of fish and certain marine animals, such as shrimp, scallop and sea urchins...
(2.8%).