Naval Air Station Keflavik closed, and the two countries signed a technical agreement on base closure issues (e.g., facilities return, environmental cleanup, residual value) and a “joint understanding” on future bilateral security cooperation focusing on defending Iceland and the North Atlantic region against emerging threats such as terrorism and trafficking. The United States also worked with local officials to mitigate the impact of job losses at the Air Station, notably by encouraging U.S. investment in industry and tourism development in the Keflavik area. A new Joint Declaration between the United States and Iceland was signed in 2016, supplementing the 2006 declaration. Cooperative activities in the context of the agreements have included joint search and rescue, disaster surveillance, and maritime interdiction training with U.S. Navy and U.S. Coast Guardunits; and U.S. deployments to support the NATO air surveillance mission in Iceland.

Bilateral Economic Relations

The United States seeks to strengthen bilateral economic and trade relations. The United States is Iceland’s single largest trading partner, although most of Iceland’s exports go to the European Union (EU) and the European Free Trade Association (EFTA) countries. The U.S. is one of the largest foreign investors in Iceland, primarily in the aluminum sector. The United States and Iceland signed a Trade and Investment Framework Agreement in 2009.

Iceland’s Membership in International Organizations

Iceland’s ties with other Nordic states, the United States, and other NATO member states are particularly close. Iceland and the United States belong to a number of the same international organizations, including the United Nations, NATO, the Organization for Security and Cooperation