Industry News

U.S. Sets Forth Arctic Strategy With Significant New Trade Component

Oct. 26, 2023
By: David G. Forgue

Since at least 2018 we have known that the formerly ice-in Arctic was becoming more accessible. Warming temperatures made possible the Northwest Passage that Cabot, Cartier, Hudson, and others had searched for in vain. This new accessibility has meant that countries that border the Arctic suddenly have an entirely new area in which to compete. These countries include Russia, Norway, Denmark (via Greenland), Iceland, Sweden, Finland, and Canada. In October 2022 the United States published its strategic plan for the Arctic and in October 2023 it published its plan to implement that plan.

The Implementation plan is interesting from a number of perspectives. However, we mostly talk about trade here, so we’ll stick with the trade pieces. First, the United States is focused on working with its “Arctic Allies” to protect critical infrastructure and improve investment screening for national security purposes. The Arctic Allies are Canada, Denmark (including Greenland and the Faroe Islands), Finland, Iceland, Norway, and Sweden. To that end the United States is “supporting” Iceland in passing investment screening legislation, as well as working closely with the remaining Allies. Expect more CFIUS or CFIUS-like evaluation of investment in the region in the future.

In addition, supporting sustainable economic development while also increasing trade and investment links between the United States and Greenland is a stated goal of the implementation plan. While this seems unlikely to be consequential to the United States on its face, it appears possible that Greenland may be an untapped source of critical minerals. Both investment regulation and a deepened trade relationship could become immediately relevant if critical minerals are commercially available in Greenland.

Finally, the implementation document contemplates shipping lanes in the Arctic, with the attendant need of Coast Guard and naval facilities to protect and assist commercial shipping. Some of this is already provided from Canada and Alaska in the Western Hemisphere. However, the document discusses an Arctic Coast Guard Forum for the Arctic Allies to be able to coordinate and cooperate.

The future of shipping, trade, and investment in the furthest north will raise many new opportunities and issues going forward. The attorneys at Barnes, Richardson & Colburn are able to help you navigate this new Old World.