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News, 5/16/2018

Discovering Arctic Possibilities

The Arctic area has great business potential, but also many issues yet to be solved. The Arctic of the Future: Strategic Pursuit or Great Power Miscalculation?  event gathered international professionals to discuss Arctic matters last week in Washington D.C. We had the honor to talk with Tero Vauraste, CEO of Arctia Ltd. and chairman of the Arctic Economic Council and find out more about the problems and possibilities the Arctic region is facing.

CEO of Arctia Ltd. Tero Vauraste visited Washington D.C. in May to discuss Arctic matters.
CEO of Arctia Ltd. Tero Vauraste visited Washington D.C. in May to discuss Arctic matters.

You visit Washington D.C. quite regularly. What brings you here this time?

I'm here for two days and my program has been scheduled around the CSIS Arctic event. The objective was to bring some messages, such as assessments on the development of Arctic shipping, and report on the current work of the Arctic Economic Council. Now there are other topics coming up, such as icebreaking cooperation with the United States, something we've worked on for a long time.

You're also the chairman of the Arctic Economic Council at the moment. Has there been anything surprising during the chairmanship, and what kinds of plans do you have for the forthcoming year?

There have not been real surprises, but rather challenges with Arctic trade, such as protectionism in the United States, the impacts of sanctions to trade in the Arctic, as well as questions on steel and aluminum tariffs. Also current U.S.-China trade relations have surely had effects too. Market access, one of our main themes in the Arctic Economic Council, is closely linked to this.

However, on the bright side, there have been advances on cable projects and the Arctic rail route in Finland. So in my opinion, there's great buzz in Finland to further these big Arctic projects.

Otherwise in the Arctic Economic Council, we're currently working on collecting more members outside the Arctic region, and it's been successful so far to broaden cooperation.

You've talked a lot about free trade needs of the Arctic region. Are obstacles you just mentioned the most difficult ones?

Yes. The importance of free trade in the Arctic starts with the accessibility of the best technologies and services. But discussing a bit more broadly, the structure of trade in the Arctic is problematic because there are so many valid regulations: Russian, EU’s, European countries’ that are not the EU members, and the NAFTA region. In addition, Greenland is as its own region. So areas are very complex to start with. Unfortunately this topic is very relevant at the moment.

What would be the best way to solve these issues?

The problems originate from the progress of international relations and trade policy, so as the WTO is a bit weak at the moment, I would highlight the EU's role with this. When Finland will take a leading role as a chair of the EU, these issues should be highlighted.

Arctic issues might feel distant to Americans. What would you like to tell them about the opportunities there?

When talking about Alaska or even more northern regions, maybe Americans haven't recognized the full potential of those regions. So that's the message I would leave.

You're also the CEO of Arctia Ltd. Now that the US has started the polar icebreaker acquisition process, do you have any messages to the US about these icebreakers?

The main message is that you can get the whole production chain of icebreaking from Finland and Finnish companies; starting from research to design and building, operating and full life-cycle maintenance services. It's cost-effective in comparison to the way they are built here.

I would also like to reinforce international cooperation. Since Finland is the chair of the Arctic Council, maybe we could work on for having an icebreaking and S&R (search and rescue) agreement. Even if it isn't finalized during Finland's term, at least we could initiate it.

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Updated 5/31/2018

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