Iceland will become the first European country to sign free trade agreement with China next week, according to Prime Minister of Iceland Johanna Sigurdardottir who kicked off her visit to Beijing on Friday.

Iceland's Prime Minister Johanna Sigurdardottir [Photo/Xinhua]

Before embarking on her flight, Sigurdardottir accepted a written interview with China Daily, saying she aims to sign the agreement during her visit to the country on April 13 to 18.

She also believes the agreement will lower the price of Chinese products in Iceland while calling the agreement "a landmark agreement" to both countries because if it gets signed, Iceland willbecome the first country in Europe to sign FTA with China, the world's second largest economy.

"This is the first free trade agreement China finalizes with a European country, and for Iceland this is a very important agreement, with one of the largest economic powers in the world," she said.

The prime minister said the minister for foreign affairs in Iceland, and minister of commerce of China will sign the agreement.

She said the free trade agreement should create increased business opportunities, facilitate trade and cooperation between our countries.

"With customs duties lowered or at zero, free trade should also lower prices to Icelandic consumers, on Chinese products, and increase competitiveness for Icelandic companies exporting or providing services to China," she said.

"Although the trade deficit is large, we have seen a lot of increase in trade with China and export of goods to China for the last decade," said Sigurdardottir.

"With the free trade agreement coming into force, I certainly hope that this will have a very positive effect on trade, reducing the deficit," she added.