FROM: U.S. STATE DEPARTMENT
U.S. Relations With Iceland
Bureau of European and Eurasian Affairs
Fact Sheet
June 15, 2012
The United States was the first country to recognize Iceland's independence in 1944 following Danish rule, union with Denmark under a common king, and German and British occupation during World War II. Iceland is a member of the North Atlantic Treaty Organization (NATO) but has no standing military of its own. The United States and Iceland signed a bilateral defense agreement in 1951; it remains in force, although U.S. military forces are no longer permanently stationed in Iceland.
The U.S.-Icelandic relationship is founded on cooperation and mutual support. The two countries share a commitment to individual freedom, human rights, and democracy. U.S. policy aims to maintain close, cooperative relations with Iceland, both as a NATO ally and as a friend interested in the shared objectives of enhancing world peace; respect for human rights; economic development; arms control; and law enforcement cooperation, including the fight against terrorism, narcotics, and human trafficking. The United States and Iceland work together on a wide range of issues from enhancing peace and stability in Afghanistan, to harnessing new green energy sources, to ensuring peaceful cooperation in the Arctic.
U.S. Assistance to Iceland
The 1951 bilateral defense agreement stipulated that the U.S. would make arrangements for Iceland's defense on behalf of NATO and provided for basing rights for U.S. forces in Iceland. In 2006 the U.S. announced it would continue to provide for Iceland's defense but without permanently basing forces in the country. That year, Naval Air Station Keflavik closed and the two countries signed a technical agreement on base closure issues (e.g., facilities return, environmental cleanup, residual value) and a "joint understanding" on future bilateral security cooperation (focusing on defending Iceland and the North Atlantic region against emerging threats such as terrorism and trafficking). The United States also worked with local officials to mitigate the impact of job losses at the Air Station, notably by encouraging U.S. investment in industry and tourism development in the Keflavik area. Cooperative activities in the context of the new agreements have included joint search and rescue, disaster surveillance, and maritime interdiction training with U.S. Navy and U.S. Coast Guard units; and U.S. deployments to support the NATO air surveillance mission in Iceland.
Bilateral Economic Relations
The United States seeks to strengthen bilateral economic and trade relations. Most of Iceland's exports go to the European Union (EU) and the European Free Trade Association (EFTA) countries, followed by the United States and Japan. The U.S. is the largest foreign investor in Iceland, primarily in the aluminum sector. The United States and Iceland signed a Trade and Investment Framework Agreement in 2009.
Iceland's Membership in International Organizations
Iceland's ties with other Nordic states, the United States, and other NATO member states are particularly close. Iceland and the United States belong to a number of the same international organizations, including the United Nations, NATO, the Organization for Security and Cooperation in Europe, Arctic Council, Organization for Economic Cooperation and Development, International Monetary Fund, World Bank, and World Trade Organization.
