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Halldór Ásgrímsson, utanríkisráðherra 1995–2004

Utanríkisstefna Íslands á breytingartímum (á ensku)

14. ágúst 1997

Utanríkisstefna Íslands á breytingartímum
Ræða Halldórs Ásgrímssonar, utanríksisráðherra
Buenos Aires

Iceland's Foreign Policy in a Changing World
Speech by H.E. Mr. Halldór Ásgrímsson, Minister for Foreign Affairs,
Argentine Council for International Relations
Buenos Aires

Ladies and Gentlemen,
It is an honour for me to have an opportunity to address you on the main aspects of Iceland's foreign policy in a new and changing world here in Buenos Aires.

We are living in historic times. Communism has collapsed and winds of change are sweeping through Europe and the rest of the world. The Eastern European countries and the Baltic States have applied for a membership to NATO and the European Union. Countries in South America and in Southeast Asia are experiencing an economic boom of an unheard magnitude.

Distance has become relative due to innovation in computer software and technology, communications and transport. Distance is therefore not the same obstacle in business as before. The multilateral trading system has been strengthened through the establishment of the World Trade Organisation. Obstacles to trade are being dismantled and regional groupings have gained momentum like the European Union, NAFTA, Mercosur and ASEAN.

How does Iceland fit into this New World order? What are the main pillars of the foreign, security and defence, and trade policy of Iceland?

Let me begin by outlining few points concerning our foreign trade policy.

Iceland is highly dependent on foreign trade. The relative large share of foreign trade is due to the high productivity of the main export industry, fisheries. Because of the importance of foreign trade a liberal trade policy naturally is in Iceland's interest.

Iceland became a contracting party to the GATT in 1968 and a founding member of the World Trade Organisation (WTO) as well as the Organisation on the Economic Co-operation and Development (OECD).

Whereas around three-quarters of our external trade is with Western Europe a good trading relationship with other European countries is extremely important. Iceland joined the European Free Trade Association, EFTA, in 1970 and in 1973 it concluded a free trade agreement with the European Community. These developments carried with them very dramatic changes for Iceland's economy and society to the better. In addition to the above-mentioned agreements, the EFTA countries and the European Union concluded an agreement creating the so-called European Economic Area (EEA) between the 18 Member States. This Agreement entered into force on 1 January 1994. It covers not only free trade in goods but the freedom of capital, services and persons as well. It also provides substantial liberalisation in trade with fisheries products.

Iceland is not a member of the European Union, the reason mainly being the Union's Common Fisheries Policy which Iceland views as being incompatible with its national interests and high dependence on fisheries. In Iceland the fishing industry is serious business without any subsidies. The fishing industry in the European Union, however, is heavily subsidised, being a regional policy as well.

If one studies an Atlas he or she will observe that Iceland is in the middle of the Atlantic Ocean between Europe and the Americas. Because of this, Iceland has for a very long time had excellent trade relations with North America, it being one of the most important markets for Iceland. Iceland's strategic location between Europe and Americas has been very helpful in keeping up a frequent transport-link to most of the major cities in the United States and in Canada as well as in Europe.

Other traditional markets for Icelandic goods apart from Europe and North America are mainly Japan and Russia.

The business environment in Iceland has in the last few years changed dramatically. It is more outward looking with a better educated generation taking over the reins of many businesses. Icelandic businesses are looking all over the world for opportunities to form joint ventures and utilising their expertise and know-how. This is not only the case with the fishing sector as such, but with firms in the bi-product sector and from the software industry to name a few. The increase in foreign investment in Iceland has been substantial over the last few years. This investment is mainly in the power-intensive industries, aided by tariff-free access to the European market.

Because of the new thinking by the Icelandic business in terms of internationalisation, Iceland has monitored economic development all over the world. Apart from traditional markets, we have followed closely economic development in some of the countries in South America and in Southeast Asia. There is no coincident that an Icelandic business delegation is here in Buenos Aires. Argentina has gained world wide admiration for their economic progress and political stability in the last few years. We have for example witnessed a growth in the Argentine fishing sector and I am convinced that there is a great potential for increased trade between Argentina and Iceland.

Ladies and Gentlemen,

Let me now turn to some points concerning Iceland's defence and security issues.

Iceland is a founding member of NATO and has had a bilateral defence agreement with the United States since 1951. On the basis of this bilateral agreement, US forces have been stationed in Iceland under the auspices of NATO. Iceland considers that its interests in the field of security and defence are fully secured through the membership of NATO and this bilateral defence agreement.

The transformation of the European security landscape over the past few years has influenced the debate on security and foreign policy in Iceland as elsewhere. The Cold War is over but it has been replaced by threats of other nature, which is a cause of concern. These are, for example, threats to the environment, the proliferation of weapons of mass destruction, ethnic and religious conflicts and the globalisation of organised crime, in particular drug trafficking. These world-wide threats affect Iceland's security as they affect the security of other countries and continents.

However, though great changes have taken place, in our view it is clear that NATO will remain the backbone of European security. I have no hesitation in saying that few countries in NATO have attached greater importance to the Trans-Atlantic link than Iceland. A constant emphasis must be placed on the importance of maintaining the security link across the Atlantic on a firm basis. A continued strong American presence in Europe and the assurance of their participation in the military command. This link must not be weakened by any means.

At the Nato Summit last month, a historic decision was taken when Poland, Hungary and the Czech Republic were invited to membership talks in the first enlargement of NATO since the end of the Cold War. The Summit firmly emphasised that NATO will remain open to new member states and that this first enlargement will not be its last.

Extensive and successful co-operation with Russia will be of key importance for the future development of security in Europe. The NATO-Russia Founding Act is an important contribution to the security of Europe as a whole, and should ensure the constructive participation of Russia in the emerging new European Security Architecture for the coming century.

Ladies and Gentlemen,

I would now like to turn to some of the foreign policy aspects of Iceland.

We must bear in mind that security in the traditional sense is only half the picture. The social, political, environmental and economic aspects of security, which are often referred to as "soft security", play an important role in securing peace and stability in Europe. Through several international organisations we work together with other countries on issues and problems we commonly face.

A key organisation in the European "soft security" is the Council of Europe, especially with regard to its role in co-operation in the areas of human rights, development of democracy and improved relations of different nations across borders. The work of the Council is particularly important for the adaptation of the countries of Central and Eastern Europe to Western social and political traditions. Many of these countries are already members, and the number of Member States has now risen to forty.

The Icelandic government has emphasised participation in the Council of Europe. In two years Iceland will take over the Chairmanship in the Committee of Ministers of the Council.

For many years we have had very close links with the other Nordic countries, Norway, Sweden, Denmark and Finland. Nordic cooperation is extensive and far-reaching in many fields, including trade and economy. A passport union, a common labor mar-ket and harmonization of various legislation are but a few examples.

As I mentioned earlier, Iceland has extensive co-operation with the European Union, so political changes taking place inside the Union can easily affect Iceland. The two biggest political issues that are now being dealt with are the enlargement of the Union and the establishment of the European Monetary Union.

Iceland regards EU's, enlargement as a positive step to economic development, security and political stability in Europe. Any enlargement is of direct consequence to Iceland since each new member state will also become a member of the European Economic Area.

The establishment of the European Monetary Union will as well have an effect on Iceland whereas Iceland has extensive trade with the countries of the European Union.

Many of Iceland's vital interests have been addressed through the United Nations. I am especially referring to the UN Convention on the Law of the Sea and the UN Agreement on Straddling Fish Stocks and Highly Migratory Fish Stocks. During the negotiations on these agreements, Iceland had a very good co-operation with the representatives of Argentina. Argentina was one of the pioneers of extending the limit of their economic zone to 200 nautical miles. Iceland was in fact the first European country to do so.

Many of the problems confronting the nations of the world in the coming years will only be solved with joint effort of many countries through the United Nations. It is the only forum where all the nations of the world are granted an equal opportunity to make their contribution to the solution of problems that are common to all of us. One of these issues is the question of protecting our environment. This is particularly true in the case of Iceland that seeks its livelihood in the ocean.

At the Special Session of the UN General Assembly on sustainable development last June, Iceland emphasised, that utilisation and the protection of the living resources of the sea, is a growing element in sustainable development. I would like to use this opportunity to warn against attempts to shift the emphasis away from the principle of sustainablility to that of conservation for the sake of conservation alone, disregarding the rights of states to utilize their resources in a sustainable and responsible manner. Iceland and Argentina must be on the alert in this matter for their interests are common and the consequences of neglecting our guard against extremist conservation groups could be devestating to both countries.

Iceland has ratified the UN Agreement on Straddling Fish Stocks and Highly Migratory Fish Stocks. The essence of this agreement consists of rules on the co-operation of coastal states and states involved in high seas fisheries within the framework of regional fisheries organisations on the protection and regulation of fishing from migratory fish stocks. At present, various regional organisations are being restructured in the light of these international developments. Iceland has participated actively in this work and placed great emphasis on it.

It is important that states, which utilise the same stock, agree on a total allowable catch and divide it among those states, which have a real interest and depend heavily on fisheries. Over the past few years, the fishing of Icelandic vessels outside the Icelandic economic jurisdiction has brought substantial revenues into the Icelandic economy. Hopefully this will continue to be the case, but it must be borne in mind that utilisation of the fishing grounds on the high seas has increased dramatically. It is of the utmost importance to bring under control all fishing which as yet are not subject to any kind of control.

It is the firm policy of Iceland that all the living resources of the sea, including whales, should be utilised in a sustainable manner. The position regarding protection and utilisation of whales must be governed by the same basic scientific principles as the utilisation of all other living marine resources. It is our policy to maintain close consultation and co-operation with all the countries concerned, even though we have been frustrated by the lack of understanding for these principles in some countries and organisations.

Regional co-operation within the Barents Council, the Council of Baltic Sea States and the Arctic Council has increased substantially. Iceland has participated actively in this co-operation and special emphasis will be placed on areas where Icelandic expertise can be put to good use for our partner states.

The main purpose of the Council of the Baltic Sea States is to promote all forms of relations between the Member States by improving the economic climate, environmental conditions and promoting increased trade, and at the same time strengthening the foundations of democracy, human rights and public security. The work of the Council in the area of environmental matters is also important.

With the establishment of the Arctic Council, a forum has been created for extensive co-operation between the member states. One of the Council's most important tasks will be to ensure a balance between environmental conservation and the utilisation of natural resources in the Arctic Region.

Ladies and Gentlemen,

The balance of power in the world is changing. Superpowers have ceased to exist and others are emerging. But their power is of another nature and will not only be measured in military terms but also in economic terms such as balance of payments and economic growth. Iceland is adapting to the development of this new structure but is as well looking towards areas where there is economic growth and stable business promoting governments. Iceland is currently developing stronger co-operation with countries like Korea and China and is interested in increasing its co-operation with Argentina, which shares many of the same interests as Iceland.

Thank you.


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