US-Russia Relationship and the Arctic: What to expect during the Finnish Arctic Council chairmanship?

Auditorium of the Finnish Institute of International Affairs; Ankkurikatu 5, 4th floor, Helsinki · 06.04.2017 10:00 - 11:30

Finland assumes the chairmanship of the Arctic Council in April in an increasingly uncertain political environment. Recent changes in Russia’s foreign policy have caused concern in Europe and have also raised new questions about the direction of Russia’s Arctic policy. Surprisingly, an additional layer of uncertainty related to Arctic politics has emerged from the United States, as Donald Trump was elected as the 45th president of the US. After the US elections, there has been widespread concern about the future of the US climate policy, the direction of US energy policy and energy cooperation in the Arctic, as well as the future of Arctic multilateral governance. The potential recalibration of the US-Russia relationship in general and the fate of sanctions in particular are also seen as worrying. What does all this mean for the Arctic region? What kind of Arctic policy will be pursued by the US or by Russia? How will the US-Russia relationship develop, particularly with respect to the Arctic? What can be expected in this regard during the Finnish Arctic Council chairmanship?

Opening words

Teija Tiilikainen, Director, the Finnish Institute of International Affairs


Heather Conley, Senior Vice President, Centre for Strategic and International Studies
Ekaterina Klimenko, Researcher, Russia and Eurasia, Stockholm International Peace Research Institute (SIPRI)


Juha Käpylä, Senior Research Fellow, the Finnish Institute of International Affairs

Summary of the seminar
In her opening remarks, FIIA Director Teija Tiilikainen welcomed the two keynote speakers invited to discuss Arctic politics. The topic has been followed at FIIA by two Senior Research Fellows, Juha Käpylä and Harri Mikkola, who have been analysing the transformation of the Arctic region with a special focus on governance, security and economic issues.
Senior Research Fellow Juha Käpylä chaired the seminar. He went over Finland’s agenda for the Arctic Council chairmanship which the country will assume in May. During the upcoming two-year period, Finland seeks to advance the implementation of the Paris Agreement and the UN Sustainable Development Goals. Finland’s priorities include environmental protection, meteorological cooperation, connectivity, and education. According to Käpylä, the Finnish agenda looks promising. It advances the core task of the Council, the protection of the Arctic environment. Finland also seeks to tackle concrete circumpolar challenges and contributes its knowhow to that end. That said, Finland assumes the chairmanship in an increasingly uncertain political environment due to changes in Russia’s foreign policy since the Ukraine crisis broke out. Additional uncertainty is brought about by the presidency of Donald Trump. Questions remain about the future Arctic policies of the new US administration and of Russia. What can be expected in this regard during the Finnish chairmanship, Dr Käpylä inquired.
CSIS Senior Vice President Heather Conley approached the theme of the seminar from the point of view of the US. She said that as we are a month away from the US passing the baton of Arctic Council chairmanship to Finland, the timing is excellent. Putin’s presence at the recent Arctic conference in Arkhangelsk showed how important the Arctic is to Russia. President Xi’s visit to Helsinki was an important reminder of China’s growing interests in the Arctic, and that the region is becoming strategically more significant.
Ms Conley discussed both the future of the US policy towards Russia and the US Arctic policy, saying the two are connected. The US is coming to grips with Russia’s demonstration of 21st century active measures and tactics. The US must reflect on its transparency and institutional strength. US policy towards Russia is frozen for the time being. There has been speculation on the lifting of sanctions by the new administration. Yet if the White House decided to lift them, Congress would stiffen the sanctions, turning them into law. US Ambassador to the UN, Nikki Haley, gave a tough statement against Russia after the gas attack in Syria. Trump has said that the new START Treaty may not have been a good deal. The ongoing investigation by the Senate Intelligence Committee makes the situation even more challenging. It is interesting to see whether there are any hints of a change in the US policy when Secretary of State Tillerson visits Moscow. Ms Conley was not optimistic about finding a way forward in this situation.
We are used to thinking that the Arctic is an exceptional zone of peace and cooperation. Tillerson will attend the meeting in Fairbanks, Alaska in May, hopefully Russian Foreign Minister Lavrov will as well. The Council’s consensus-based work will continue. Ms Conley was concerned that the scientific funding for polar research might be reduced. The Finnish chairmanship agenda has a focus on the implementation of the Paris Agreement. The US Arctic policy might be rebalanced towards economic opportunities. Ms Conley believed that while we need environmental protection, sustainable development and growth are also necessary.
More countries impacted by climate change will want to join the Arctic Council. If the Council continues to accept new countries like Turkey, Mongolia or Switzerland, how will it manage the new members? Increased military exercises by both Russia and NATO create tension, which is why we need more confindence-building measures and transparency.
Ekaterina Klimenko from SIPRI discussed Russian Arctic policy and US-Russia relations in the Arctic. It is now 10 years since Russia planted its flag on the Arctic seabed and caused other countries to look at the region again. Since the first Russian Arctic strategy from 2008, Russia’s goals have not changed much. Russia’s goals in the strategy include safeguarding the Arctic as a zone of peace and cooperation, preserving the ecosystem, using the Northern Sea Route for transportation, and developing the region’s energy resources.
The development of offshore energy resources is difficult for Russia because it lacks the required technology. Russia is one of the biggest producers of gas and oil, but its current production areas are depleting and new ones are needed. Gazprom and Rosneft, the two biggest companies, formed alliances in order to develop Arctic shelf resources. However, with the fall of oil and gas prices and the shale gas revolution, Arctic resources became unprofitable. Also due to the sanctions imposed on Russia, the partnerships have mostly been halted. Without American and Norwegian technology, exploration in the Arctic is difficult. Shipping via the Northern Sea Route depends on the development of offshore resources. It is not so much a cargo route, but related to projects such as the planned LNG plant on Yamal Peninsula, Ms Klimenko explained.
Military activity in the Arctic is the most controversial aspect of Russian presence in the region. Russia’s Arctic strategies do not mention a direct military threat in the region, but Russian forces are prepared to repel aggression and provide deterrence. Access to the Atlantic and Pacific oceans is also important to Russia. Russia’s plans, for instance modernising its fleet, reflect broader security concerns than just those related to the Arctic region. Russia may use the forces elsewhere, or they may be part of the country’s power projection. Since the introduction of sanctions, Russia has developed a partnership with China: Chinese investments in the Russian Arctic are significant. This is an interesting change from Russia’s previous reluctancy to cooperate with China in Arctic issues.
As to Russia-US relations in the Arctic, this is the only region where the two powers have no major disagreements, including territorial disputes, Ms Klimenko noted. Low-level cooperation continues, for example in the form coast guard cooperation. The work of the Arctic Council continues with Russian participation, unaffected by the tensions. However, Russia’s military policy in the Arctic is a point of tension between the countries. Ms Klimenko did not expect much change during the Finnish chairmanship. Russia is still waiting to see what working with the Trump administration is like. Tillerson’s visit is important in this regard. Unless sanctions are lifted, new breakthroughs are unlikely.
After the presentations, the discussion revolved around questions such as the Finnish agenda for its chairmanship, American and Russian views on the environment and climate change, the growing role of observers in the Arctic Council, the difficulty of Trump and Putin meeting at a possible Arctic summit without a clear agenda, as well as Russia’s military posture.