Latvia’s Foreign Policy Goals and Relations with China

Foreign Minister of Latvia Indulis Bērziņš:

Speech at the Chinese People’s Institute for Foreign Affairs Beijing, China, June 13, 2000

Ladies and Gentlemen,

My thanks to you who have organised this gathering and to you who have come to participate. It is an honour to present my ideas before this distinguished audience.

Today, I will be speaking of

• Latvia’s foreign policy goals,

• the progress toward these goals, and

• Latvia’s interest in co–operation and business with China.

In China, it would not be wrong to say that Latvia is a small country.

Latvia can, in some way, be compared to Singapore — a tough little country of around two and one half million persons. And like Singapore, our economy is growing. The infrastructure is well–developed. And we are already a regional centre for banking and financial services.

Foreign Policy

Latvia’s main foreign policy goal is to re–link the lives of its people with the people of Europe.

At the EBRD conference a few weeks ago, our Prime Minister Andris Bērziņš said: "Europe is coming back to Latvia." And we’re happy to have Europe back especially because we’ve always belonged to Europe... just look at the map.

The best way to come back into the European family is to earn membership in the clubs of Europe. So joining the EU — the European Union — is a top goal.

Cooperation is also a goal. Cooperation on the global level... and that is one reason I’m here today.

But cooperation–building on the regional level within the Baltic and Nordic neighbourhood is the groundwork for cooperation on a global scale.

We apply various formulas. The 5+3 formula includes the Baltic States and the Nordic Countries. We meet frequently at the Level of Prime Ministers, Presidents, Foreign Ministers, and Defence Ministers.

Latvia has been contributing to the improvement of the network of friendly bilateral ties in the region. Baltic Sea States agree on common strategies to face challenges and to seek profit. We work together to make the region more attractive, but we collect the dividends individually.

The trilateral cooperation with Lithuania and Estonia is the most intensive form of regional cooperation we have developed so far.

On the other hand, the three Baltic States and the five Nordic States move closed together each year. Eventually 5+3 will equal eight.

Building Bilateral Contacts

I would like to turn now to relations between China and Latvia. Latvia considers the People’s Republic of China, to be the only official representative of the Chinese people. We support the "one state" policy.

Our bilateral relations are good. How China acted in 1991 set the right course. China was one of the first countries to recognise Latvia’s independence when we restored it after fifty years of occupation. And China was clear in its support for Latvia’s demand that Russian troops be removed from Latvian soil. The Latvian people remember who supported our freedom.

The visit of a Foreign Minister is important but it’s just one aspect of developing bilateral contacts.

In August of 1994, China opened its Embassy in Riga. In December of the same year, the President of Latvia visited China. The Foreign Minister of China visited Latvia for the first time in March 1995.

In the spring of 1997, the Chairman of our Parliament visited China. And, in August 1998, Latvia opened its Embassy in Beijing.

Last year, an important delegation from China came to Latvia on March 2nd. The delegation was headed by the Deputy Prime Minister for Trade, Wu Yi. Part of true diplomacy is to make businessmen happy.

My delegation is in China from the 13th to the 18th of June. We were immediately preceded by the visit of a delegation of six persons from Latvia’s Parliament. The Deputy Head of our Parliament was Head of this delegation.

• Latvia and China should have active contact at the Parliamentary level.

• His Excellency Mr Li Peng is visiting Slovenia, Slovakia and other countries this summer. We hope that he will be able to come to Latvia in the autumn. Certainly in Latvia he will receive a warm welcome.

• Links at the leadership level make history that we read about in the newspapers but people–to–people contacts especially among young people are what make the difference in the longer term. Our contacts should be as broad as possible.

Cultural Contacts

On the 2nd of September 1996, we signed an inter–governmental agreement on cooperation in the sphere of culture and education. This agreement forms the legal basis for exchange programs.

We are pleased that the Museum of Foreign Art in Riga Castle presented an exhibition of Chinese calligraphy and paintings last year. Now, an exchange of exhibitions has been organised with the Shanghai Museum. The Chinese government has helped our Museum of Foreign Art by sharing knowledge on how to restore damaged masterpieces.

Latvia and China have had successful exchanges between the Beijing and Riga opera and ballet troupes. The Chinese People’s Dance Group has participated in Latvia’s international dance festivals.

We highly value these opportunities to develop cultural contacts.

The presence of a Latvian Embassy in Beijing of course facilitates such exchanges in a way that was not possible previously. I encourage you who are in this room to contact our Embassy and to visit Latvia.

Trade and Economic Relations

Latvia in the past decade has achieved remarkable progress in transforming its economy into a market–based environment for business.

Already today Latvia boasts strong economic and trade relations with the EU countries — the EU region accounts for 57% of foreign trade (62,5% of exports; 54,5% of imports). This level of trade is fostered by the free trade agreement concluded in 1995, and by EU foreign direct investments — more than 56% of the total investments in Latvia.

Needless to say, the large share of exports to the EU points at the high competitiveness of Latvian producers, while the investment statistics reveal Latvia as a safe place for investment.

In bilateral trade, Britain led the way — receiving 17% of Latvia’s total exports — followed by Germany with 16%. Russia comes in fifth place with 7% trailing Lithuania.

Access to the consumer–rich regions of Scandinavia, Central and Eastern Europe and the EU, favorable business opportunities (supported by attractive incentive packages, including the free economic zones), and overall stability are only few arguments that speak in favor of more active enrollment of the Chinese companies in Latvia.

Transit

Latvia’s unique geographical location on the shore of the Baltic Sea has placed it squarely at the crossroads of international commerce. For centuries Latvia has been a major commercial hub between West and East, and the centre of the Hanseatic League, the World’s "first" Free Trade Area.

This background has been a basis for a strong transit and transportation infrastructure that handles the cargo flows between East and West (the Latvian transit corridor handles 15% of Russia’s oil exports, while Ventspils is among the largest ports of the Baltic Sea and the 15th largest in the Europe).

Having an excellent port, railway and road infrastructure (with expandable capacities), no administrative barriers (e.g., tedious customs formalities) — this means that for decision–makers, Latvia is an attractive transit corridor for trade flows between East and West.

It is for this reason Latvia is genuinely interested in participating in new transcontinental shipment initiatives from China to Europe.

Particularly, I would draw attention to the Asia–Europe transit corridor project (the "transcontinental bridge") where Latvian transit infrastructure could effectively serve as the furthermost Western point of the corridor, enabling fast, safe and reliable handling of cargo flows in transit.

In this regard, Latvia considers it as a priority to continue work on coordination of the Agreements on Sea Transportation and on Cooperation in using Latvian Ports for Handling and Transporting Chinese Goods.

Woodworking, electronics, information technologies, packaging manufacturing, food processing are only few fields for potential successful cooperation between Latvian and Chinese companies.

WTO Membership

Latvia’s effort to joint the WTO ahead of the other Baltic States in February 1999 testifies to the priority status assigned to foreign trade and commercial cooperation.

At this point, allow me to say briefly that Latvia supports China’s membership in the WTO and I personally applaud the success of China’s recent lobbying effort with the US Congress to secure Permanent Normal Trading Relations (PNTR). This was a step forward on the road to WTO membership. Many countries breathed a sigh of relief at this positive development.

Domestic Goals

To project a strong foreign policy, we need to make our country strong first. In Latvia, a number of domestic goals are a basis of what we want to accomplish internationally.

Let me name three of these goals:

• the enhancing of administrative capacity so as to develope Latvia’s reputation for professional service and quality manufacturing;

• the integration of our society; and

• dealing with the past; this means seeking reconciliation and forgiveness through an honest accounting of what happened on Latvia’s territory during the Second World War and the occupation.

Quality: a National Goal

On the issue of professional service.

You will find good service in Latvia. To some extent, this is a sign of respect for the customer. It is also a question of culture.

Last month, our service was put to the test. Latvia just hosted the EBRD conference — the annual meeting of the European Bank for Reconstruction and Development. Delegations from 62 countries came to Riga.

We realise that belonging to Europe involves more than just generating wealth and high living standards, it involves the ability to create an atmosphere in which visitors feel comfortable.

We cannot provide excellent service to global business unless we maintain the cosmopolitan attitude developed over centuries.

The EU connection boosts Latvia’s access to the world. But having more of the west does not mean that we want less of the east.

Latvia’s links eastward, our knowledge of foreign languages, our ability to be a home for foreign business — these contribute to our strength as a nation. And to our sophistication and ability to serve international clients.

The visitors to the EBRD conference felt this attitude.

An Integrated Society

Next, I want to discuss integration for our society because the degree to which a national community functions as a unit is an indication of a country’s integrity.

Latvia is home to many immigrants. Since independence, we have worked hard to find a way to invite immigrants to join the national community which allows then to also maintain their cultural traditions.

Violence between ethnic groups has never occurred in Latvia. Latvia is building an inclusive society with equal opportunities for all. Living standards for the average Russian living in Latvia is better than the living standard of the average Russian living in the Russian Federation.

To draft our programme on social integration, we listened to the advice of experts from the United Nations, the EU, the OSCE, and the Council of Europe.

I could mention some highlights:

• the programme reinforces the protection of human rights, already part of Latvian law;

• secondly, the programme is designed to encourage all long time residents to become citizens;

• thirdly, the programme supports Latvian culture and the Latvian language — including funding and support for teachers and education literature;

• fourth, we are encouraging active participation of non–governmental organizations — NGOs;

• fifth, the state agrees to support minority schools and cultural organizations. (At the moment, state–financed secondary education in Latvia is available in eight minority languages — Ukrainian, Russian, Belarussian, Estonian, Lithuanian, Polish, Hebrew, and Roma — though not yet in Chinese.)

Social integration is not just about bringing in minorities as full participating members of society. We look at the places where society has become split into groups and try to close the gaps. This means thinking about the rich and the poor, the "haves" and "have–nots", men and women, young and old. The groups which are vulnerable or under–privileged require attention so that society does not lose balance as it develops.

 

The creation

of a United Europe

Now, I would like to turn to the EU and Latvia’s prospective accession.

The European Union, enlarged to include the current candidate states, will have over 500 million inhabitants. Still less than half the size of China but more than enough to provide a worthy competitor and trade partner.

Around 100 million persons live in the Baltic Sea region. Latvia is swimming hard to catch the first wave of enlargement. We aim to complete accession negotiations by January 1, 2003. Latvia expects to join the EU as early as 2005 along with the first wave of new members.

Much depends on the willingness of EU states to reform. Much depends on the IGC, the inter–governmental conference, which concludes at the end of the year during the French Presidency of the EU.

Latvia is often classified as a "country in transition". However, this term could just as easily be applied to the EU. The Union is an entity in transition.

The EU must modernise itself to accommodate a confederation of 27 or more member states.

There will be sinkers and swimmers in the global economy of the new millennium, and increasing competition. Latvia is betting that the EU will be one of the swimmers. And Latvia wants the EU to become even more important as an economic and political power.

 

Latvia’s future

in the European Union

I’ve said that Latvia sees its future in the EU. I’ve mentioned the challenge of enlargement. Now I’d like to talk about orientation.

Joining the European Union is not some kind of goal in itself for Latvia. It is part of the process of returning to where we have always belonged as a people and a nation.

In fact, European integration puts national sovereignty in a new light. Closer political integration brings out various emotions in my country, as well as in other European countries. We believe, in the balance, that by joining the European Union we will be reinforcing our sovereignty, not losing it.

This year, the planning for enlargement and the IGC is putting new energy into project of building a Europe, whole and secure.

It has also put new energy into the effort to build positive relations between the EU and Russia. Even without political initiatives, the intensity of contacts between the EU and Russia should not diminish. Economically, each needs the other. Each provide. Each gain. The volume of trade is substantial. Russia already has 40 percent of its trade with the EU. After enlargement, Russia will have 50 percent of its trade with the EU.

 

Security

Security of the Baltic region is an inseparable part of euro–Atlantic security. There is no such thing as a regional solution to security in the Baltic area.

In Vilnius, Lithuania, on May 19th, the Foreign Ministers of all nine NATO candidate countries signed a declaration expressed their strong interest to join the Alliance by 2002. This Declaration was the strongest expression of solidarity among east European states since the fall of the Berlin Wall.

In spite of early hopes for ESDP, the European Security and Defence Policy, Latvia is convinced that Europe, Canada, and the United States should work together to address and solve security problems.

Among the Baltic States, security cooperation has advanced especially in the area of peace–keeping where we have a joint battalion called BALTBAT and in air space control. In these areas, the Baltic States military structures are integrated.

We are also looking to our friends. In July 1998, Latvia’s Defence Minister visited China to initiate contacts. During the current visit, we will further investigate the opportunities of military cooperation between Latvia and China.

 

Regional development

Finally, a few more words on the regional dimension. Speaking of Europe as a whole, the Baltic Sea area is the most dynamic economically while at the same time being socially one of the most peaceful. The Baltic Sea region includes 4 EU Member states, 4 EU candidates, 2 members of the European Economic Area, and only one country that is not an EU member or an EU candidate... Russia. The movement toward EU integration is dominant.

The framework for co–operation among countries in the region is well established.

• Trilateral co–operation among the three Baltic States — Latvia, Lithuania, and Estonia;

• 5+3 co–operation — the Baltic and Nordic countries; and

• 11 country co–operation in the Council of Baltic Sea States.

For Latvia, the EU’s Northern Dimension initiative means more active involvement of the EU in the region. More active investment.

The Northern Dimension of Europe embraces not only Baltic and Nordic countries but northwest Russia in a concept of coordinated economic development.

Europe is welcoming Russia to join with it in facing common dilemmas. The new leaders of Russia have an opportunity to take security cooperation with the West to a new level. Latvia will work closely with the EU to develop a policy toward Russia which responds to its evolution.

As EU member states, we will be on the "frontier of co–operation" between the west and Russia, and — be sure— we will use this opportunity.

 

Conclusion

To conclude then:

• Latvia’s future is bound together with Europe’s future. But more west should not mean less east.

• Latvia, due to its location, its infrastructure, and its traditions is an interface between east and west.

• Latvia’s business environment favours foreign investment.

• Latvia is a good partner for China.