The origins of the Cod War can be traced to the nineteenth century, when Britain championed the narrow 3-mile limit of territorial waters. In the 1890s, British trawlers began to work the rich fishing grounds off Iceland; Icelanders resented this competition but were unable to do anything about it. After World War II Iceland began to extend its fishing jurisdiction and in 1952 formally extended its fishing limit from 3 nautical miles to 4, including wide bays and fjords.
British fishermen were now excluded from their traditional fishing grounds and decided to retaliate, with tacit blessing from London, by imposing a ban on Icelandic fish in Britain. This move was bound to hurt the Icelandic economy because it relied to a large extent on the British market. But in 1953 the Soviet Union, sensing a way to play on disputes within NATO, struck a long-term oil-for-fish deal with Iceland.
Concerned about increased Soviet influence in Iceland, the United States pressured London to lift the ban, and in 1956 the British gave in. In 1958, an Icelandic left-wing coalition government extended fishing limits to 12 miles. Britain responded by sending the Royal Navy to protect its trawlers from harassment or arrest by Icelandic gunboats. During this first Cod War (the term "Cod War" was coined by British journalists) the Royal Navy enjoyed superiority in the disputed waters, but developments in the law of the sea as well as Iceland's strategic Cold War importance worked in favor of the Icelanders. In 1961, Britain finally accepted the 12-mile limit. In return, a subsequent right-wing government in Iceland agreed to refer future fishing limit disputes to the International Court.
In 1971, however, a new left-wing coalition in Iceland decided to widen the fishing limit to 50 miles and refused to refer the matter to the International Court. At first, Britain declined to dispatch warships to the scene, and the Icelandic coast guard vessels made good use of a new "secret weapon," big iron-cutters that slashed British fishing nets. In May 1973, however, the British sent in the Royal Navy, prompting a rash of collisions between its ships and those of Iceland. Besides the limit extension, the left-wing government had threatened to expel U.S. military forces from Iceland. Although the Icelandic government was divided on this issue, it was obvious that the fishing dispute was adversely affecting U.S.-Icelandic relations, not to mention NATO cohesiveness. In October 1973, after Iceland had threatened to break diplomatic relations with Britain, the warring sides reached a compromise that granted Britain limited fishing rights within the new zone for another two years.
By the mid-1970s, the international community was clearly moving toward 200-mile exclusive economic zones, to include fishing rights. Still, a new center-rightist coalition in Iceland believed that an immediate extension to 200 miles was necessary. Iceland took this step in October 1975, and the following month British frigates reappeared off Iceland. This time multiple clashes occurred, inflicting serious damage to both sides. But, almost incredibly, there was no loss of life. In February 1976, Iceland severed diplomatic relations with Britain (the only case of such a move between two NATO states). In June 1976 Britain gave in, and by the end of the year the last British trawlers sailed outside Iceland's 200-mile limit. Thus ended the Cod War, an excellent example of how a small state could use its strategic importance to advance its own agenda during the Cold War.
Jónsson, Hannes. Friends in Conflict: The Anglo-Icelandic Cod Wars and the Law of the Sea. London: Hurst, 1982.; Thór, Jón Th. British Trawlers and Iceland 1919–1976. Esbjerg, Denmark: Fiskeri-og Søfartsmuseets Forlag, 1995.