COPENHAGEN, Oct 29 (Reuters) - The United States and Greenland have agreed to strengthen economic and trade ties after resolving a dispute over a service contract to a U.S. air base in the north of the Arctic island.
The Thule Air Base has been a sore point between the United States, Greenland and Denmark since the Pentagon in 2014 awarded a service contract to a U.S. company, breaking a decade-long agreement of keeping it in Danish-Greenlandic hands.
After U.S. President Donald Trump’s rebuffed attempt to buy the island last year, the United States, in a renewed focus on the Arctic, set up a consulate in Greenland and also donated $12 million in aid towards developing the small economy.
“The case is of great importance to Greenland in principle,” Greenland’s foreign minister, Steen Lynge, said in a joint statement between Greenland and Denmark released late on Wednesday.
“We are proud that Pituffik (Thule) and Greenland’s key role in American security has now been recognised.”
Under the new agreement, the United States is committed to awarding the next contract, most likely in 2024, to a company registered in Greenland or Denmark, with a majority ownership by Danes or Greenlanders.
Greenland, a semi-autonomous part of the Kingdom of Denmark, is largely dependent on state aid from Denmark, which also handles most foreign and security affairs.
Greenland is important for the U.S. military and its ballistic missile early warning system, as it balances Russian and Chinese commercial and military buildups in the Arctic. The Thule base mainly operates a missile warning system and space and satellite surveillance.
Based on a 1951 treaty with Denmark, the United States has stationed military personnel on Thule, known as Pituffik in Greenlandic, ever since the Cold War, but it does not pay rent.
Up until 2014, it did however pay a Danish-Greenlandic company, Greenland Contractors, to service the air base, a contract worth about 600 million Danish crowns ($95 million) a year, which was viewed as an important contribution to the island economy.
As part of the deal announced on Wednesday, Greenland and the United states also agreed to strengthen ties on trade, mining, education and tourism. ($1 = 6.2952 Danish crowns) (Reporting by Nikolaj Skydsgaard; Editing by Nick Macfie)
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