China has just signed a free trade agreement with Iceland and Chinese Premier Li Keqiang declares along with Icelandic president Johanna Sigurdadottir that this will: ”…further deepen their mutually beneficial co-operation in the fields of trade and investment…”
Mutually beneficial, really?
China has 1,354 billion inhabitants that can buy Icelandic fish. The size of the Icelandic population is 0.002 percent of that.
It´s a population so small it needs an app to make sure people don´t sleep with their cousin.
Now, of course Iceland has something else to offer besides free trade: Its´ all-of-a-sudden perfect location in the middle of the Arctic, these days coming to live with the warming up of the oceans.
Only last autumn the first ships managed to make it to China through the Arctic waters – no longer frozen most of the year and next summer there will be a regular Chinese shipping route here. This will cut the time and the cost for shipping Chinese goods to Europa by half.
In exchange for selling its fish on the enormous Chinese market, Iceland also signed several agreements on cooperation over different Arctic issues and promised to support the Chinese ambition to take place in the Arctic Council.
Like the agreement of the 15th of April says:
“Iceland reaffirmed its support for China’s application for observer status in the Arctic Council. The Chinese side expressed appreciation for this support.”
Lucky timing here, the Arctic Council is to vote on applications for observer status for a number of applicants next month.
Now, the Arctic Council is open strictly for countries in the Arctic region so observer status it will have to be but China feels it is a near-Arctic state so the Chinese are going for a ´permanent observer status´ so as not having to mix with the other 26 observers without any say in Arctic matters.
In case the permanent observer thing doesn´t work out, a Chinese company has bought land on Iceland, perfectly located for a shipping marina for passing ships but intended according to the buyer as a tourist resort for Chinese tourists.
China has also promised to help Iceland drill for oil in waters close by.
The Arctic region is believed to have the largest remaining oil and gas reserves in the world, only now surfacing because of the melting ice.
It also has large deposits of rare minerals.
Iceland is very grateful to China. Should this Arctic Council ambition not work out, Iceland – just the other day, lucky timing again – created a brand new assembly dubbed the Arctic Circle, to give non-Arctic countries like China, India and Singapore a forum for influence in the region.
And just in case that is not enough, China is investing heavily in Canada forged a “strategic partnership” with Arctic-Country Denmark only last year and sends its Prime Minister on a rare visit to current-Arctic-President Sweden a few weeks before the crucial vote.
It makes sense for China to try and secure the Arctic region for its commercial interests. But what about the European position in all this, you ask?
Well, do you remember the European position in the 1990s when the US courted European capitals and offered bilateral deals for their national airlines? The European Commission argued that it should negotiate for everyone so as to get the best agreement possible from a position of strength.
The EU countries in question were of the opposite view; they should negotiate their own deal, by themselves. Which they did.
With the Arctic it´s the same story over again.
The European Commission has been asking for a permanent observer status in the Arctic Council for five years but in spite there being three EU members in the Arctic Council (Denmark, Finland and Sweden), the request has been denied so far.
Canada seems to be against granting the EU an observers´ status in the Arctic Council on account of the EU banning seal hunting.
Russia is just against in general.
The US is also against and lobbying the EU countries within the Arctic Council, saying that having the EU onboard would undermine their national interests.
The EU does not have millions of euros to turn hesitant countries into allies like the Chinese can.
All it has is the hope of European solidarity prevailing.