Forget Greenland, There’s a New Strategic Gateway to the Arctic
The Faroe Islands have a history of trading with everyone who will buy their fish. With growing tensions in the Arctic region, the islands are now receiving more attention from superpowers.
Jenis av Rana, foreign minister of the Faroe Islands, was excited on the morning of July 22. In his 25-year-long career as a member of the Faroese Parliament for the Christian Conservative party, he occasionally met with colleagues from Iceland or Greenland or even different Scandinavian countries. But he hadn’t even been foreign minister for a year, when on that Wednesday morning he was preparing to meet U.S. Secretary of State Mike Pompeo.
Pompeo was in Copenhagen, and quite untraditionally, had decided to invite the foreign ministers of the self-governing parts of the Danish Kingdom—Greenland and the Faroes—to join him and the Danish foreign minister for a meeting. For the tiny Faroese department of foreign relations, it was the culmination of many years of work that such a high-profile U.S. official was willing to talk directly to the Faroese government.
But more than anything, the invitation was a sign of the growing strategic importance the Faroe Islands, as an Arctic nation, are beginning to have. Four months later, on Nov. 28, the tiny island group—which sells a quarter of its fish to Russia and was about to commit to a 5G agreement with the controversial Chinese telecom firm Huawei—signed a partnership declaration with the United States.
The Faroes consist of 18 small islands, inhabited by 52,000 people. The archipelago lies in the middle of the North Atlantic Ocean, at the center of the so-called GIUK-gap—a North Atlantic transit route between Greenland, Iceland, and the northern United Kingdom—which has regained the strategic importance it enjoyed during the Cold War.
As stated in the U.S. defense strategy for the region, which was released in a report to Congress in 2019, the gap has become a “strategic corridor for naval operations between the Arctic and the North Atlantic.” And with both Russia and China as competitors, the region is increasingly important for U.S. national security interests. With the Arctic ice melting, and the shipping traffic growing, the Faroe Islands are hoping to become a maritime service base for U.S. and NATO ships.
Like Greenland, which outgoing U.S. President Donald Trump announced he wanted to buy a year ago, the Faroe Islands are a self-governing part of the Danish Kingdom. The economy is primarily based on fishing and salmon farming.
An increasing U.S. diplomatic presence in the Faroes has been noted by local politicians and media in recent years. The U.S. ambassador to Denmark, Carla Sands, has been visiting the islands frequently. While it is normal for the politically appointed U.S. ambassadors in Denmark to visit the Faroese as part of their duties, the feeling in the Faroes is that Sands has had a more substantive agenda than her predecessors.
When the state-owned telecommunications company, Føroya Tele, was in negotiations with Huawei to make the Chinese company its 5G-provider, the ambassador addressed the issue directly in the Faroese newspaper, Sosialurin, urging the company to “choose an American or European firm” to make sure that it was the Faroese people, “not the Chinese government” that was in charge of deciding how the technology would influence Faroese values and society.
Sands has been vocal in her worries about the potential surveillance Huawei can do for the Chinese state, but in this op-ed she went further, and tried to spread fear that countries that let Huawei control their tele-infrastructure would be working by “communist rules.” If those rules were broken, for example by “supporting human rights demonstrations in Hong Kong,” the country could be subject to “threats, reprisals and economic sanctions.”
Sands told me that she found her role as ambassador to naturally include engagement in the Faroes to ensure trade and “people-to-people relations.” She also noted the importance of the islands to NATO security. Sands isn’t the only American suitor to visit the islands lately. In October, U.S. Admiral Robert Burke, Commander of U.S. Naval Forces Europe, visited and met with the Faroese foreign minister to discuss security in the Arctic and the possibility of cooperation with the Faroes providing services to U.S. navy ships.
Faroese foreign relations have always been synonymous with business relations. As foreign and security policies on the islands are still, legally speaking, under the Danish government’s control, Faroese leaders were historically somewhat limited to making trade and fishery agreements.
But when Denmark joined what later would become the European Union in 1972, the Faroese Parliament decided not to follow—mainly because it would mean giving up fishing rights. And the EU’s ever-growing importance for Danish politics has complicated the relationship between Denmark and the self-governing parts of the kingdom, which sometimes, like when it comes to fishing rights, have opposing interests. As the Faroe Islands aren’t part of the European single market, the islands have developed important business relations outside the union.
The archipelago’s government was one of the first in the West to reach a fishery agreement with the Soviet Union in the 1970s, and later discussed a free-trade agreement with Russia for years. Even though no agreement was reached, Russia remained a vital market for Faroese exports.
After the Ukraine crisis in 2014, tensions between the West and Russia reached a boiling point. At the peak of the disagreements, the United States and Europe implemented sanctions on Russian minerals, which led to Russia imposing boycotts on European food imports. The Faroe Islands had just faced European boycotts themselves following a fishery dispute with Norway and the European Union and had increased their export to the Russian market. Luckily for the Faroese economy, Russia did not include the islands in the boycotts, and in the coming years, exports to the Eastern giant increased.
In 2015, the Faroe Islands opened a diplomatic mission in Moscow, and in 2018, the Faroes signed a memorandum of cooperation with the Eurasian Economic Union, formalizing cooperation with Russia and its neighbors. In 2018, 27 percent of Faroese exports went to the Russian market—making the Faroes the largest fish exporter to the country—and Russia was the largest single importer of Faroese fish (European countries combined imported more Faroese fishery products) and therefore essential to the Faroese economy.
While Danish politicians have sometimes expressed concern over Faroese trade with Russia while Denmark and the EU are being partially boycotted, Denmark does not have the power to decide who the Faroes trade with. As the Faroe Islands have become increasingly independent over the last decades, the nature of the relationship with Denmark has changed. When it comes to trade, the Faroes deal with anyone they choose, and the Danish government knows that any interference with trade or fishing rights could lead to major conflicts within the kingdom.
Washington probably won’t be worried about Faroese fish exports to Russia, but will be aiming at gaining equally economic and cultural ties to the islands’ inhabitants. The Faroe Islands have embassies in Moscow and Beijing, and the Faroese foreign minister told me that Pompeo had asked, in the meeting with the foreign ministers of the Danish Kingdom, why the Faroes don’t have any diplomatic representation in the United States.
In recent years, China has also become a more important market for the Faroes than ever before. The Faroese salmon-farming giant, Bakkafrost, is currently facing problems in exporting salmon to China because of the COVID-19 pandemic, but the islands are exporting more than 20 times more salmon to China than in 2010. A free-trade agreement with the most populous country on earth is therefore something politicians and businessmen in the Faroes dream about. And when the Faroese telecom company was working on a 5G agreement with Huawei, the Chinese ambassador to Denmark apparently raised the issue with Faroese ministers.
The promise of an easier path to free trade was of course meant to be secret, but it was revealed as the Faroese minister of commerce was about to give an interview to Faroese media on another topic, but was approached by a state official from his ministry. The minister had forgotten to turn off his microphone, and his private conversation with the official, who told him that the Chinese ambassador had said in a meeting that it would be easier to achieve free trade between the countries if the telecom company signed an agreement with Huawei, was recorded.
The revelation made international news and put pressure on Faroese authorities not to make Huawei it’s 5G provider. It has since become clear that an agreement with Huawei, even though not officially ruled out, is unlikely.
The Faroese tightrope act is likely to continue as great powers show a greater interest in the islands. A recent Danish Institute for International Relations report, commissioned by the Danish Foreign Ministry, outlines the effects of the Arctic change from a “low-tension” toward a “high-tension” region. In addition to discussing the challenges that growing tensions between the superpowers in the Arctic will have on the region in general, it discusses the challenges the new political reality will have on the Arctic parts of the Danish Kingdom—Greenland and the Faroe Islands.
“Great power tension in the Arctic has two effects on the Faroe Islands,” Mikkel Runge Olesen, one of the authors of the report said. “The first one is that they are back on the map,” he explained, “but there is a negative side as well. The more interested the US becomes, the harder it will be to fly under the radar, trade with everyone, and not pick a side.”
After the meeting with Pompeo, the Faroese foreign minister was satisfied. He had prepared to talk about formalizing trade and cooperation between the United States and the Faroe Islands and was positively surprised by the effectiveness of the meeting; officials from both countries had already started working on the agreement that was formalized last month. Apart from stating that the parties of the agreement want to strengthen cooperation in science, culture, and business, the agreement also acknowledges “common strategic and economic interests in the North Atlantic.”
For the United States, this will perhaps be seen as a victory in establishing its presence and maybe for the immediate future ruling out Chinese influence in a place that trades with everyone. The agreement has not received a lot of attention in the Danish media, but one can imagine that Danish politicians are happy as well. While the agreement was signed by Faroese and U.S. officials, American diplomats must have informed the Danes of what was going on. And while a memorandum with the Eurasian Economic Union does not align with Danish foreign policy, Faroese partnership with the U.S. government does.
Faroese politicians are aware of the increased relevance the tiny island group is beginning to have. When I talked to the Faroese foreign minister in August, he expressed happiness over the superpower suitors.
“We have often been told that we have been insignificant in recent years after our geographical location lost importance when tensions in the region disappeared,” Rana explained. “We have had problems reaching out to other nations, and therefore the current situation is welcomed … Some nations have natural resources, but our location is a resource for us.”