Message to the Senate Transmitting the Iceland-United States Defense Shipping Preference Treaty

To the Senate of the United States:

With a view to receiving the advice and consent of the Senate to ratification, I transmit herewith the Treaty between the United States of America and the Republic of Iceland to Facilitate their Defense Relationship, with related Memorandum of Understanding, signed at New York on September 24, 1986. I transmit also, for the information of the Senate, the report of the Department of State with respect to this Treaty.

Iceland is a vital United States ally that provides defense facilities of strategic importance to the defense of the United States and NATO. Recently, a troublesome issue has arisen concerning the transportation of cargoes to the base in Iceland, an issue that could impair the critical United States-Iceland defense relationship. Although for approximately 14 years such cargoes had been transported exclusively by Icelandic shipping companies, under U.S. cargo preference laws they have more recently been carried primarily by a United States carrier, which entered the trade in 1984. The Government of Iceland has taken the position that because Iceland's economy and security depend upon its shipping lines, and because of our mutual defense interests, Icelandic lines should have the opportunity to compete for participation in this trade. Iceland's serious concern about this defense issue has been expressed at the highest levels. This Treaty will resolve this matter and will further the cooperation of the United States and Iceland in essential areas of defense.

The Treaty provides an exception to inconsistent cargo preference law with regard to transportation of cargoes shipped between the United States and Iceland for purposes of the 1951 United States-Iceland Defense Agreement. Under the Treaty, transportation of such cargoes shall be provided by vessels of the United States and vessels operated by Icelandic shipping companies on the basis of competition pursuant to the Treaty. Any such competition is to result in contract awards that ensure that both United States flag carriers and Icelandic shipping companies are able to maintain a viable presence in the trade. The related Memorandum of Understanding provides for implementing arrangements necessary to ensure achievement of these objectives.

Because of the unique circumstances involved, this Treaty does not represent a change in the Administration's general policy concerning cargo preference or a precedent for other agreements.

In view of the important national security interests furthered by this Treaty, I recommend that the Senate consider this Treaty as soon as possible, and give its advice and consent to ratification of the Treaty, with related Memorandum of Understanding, during this session.

RONALD REAGAN

The White House,

September 30, 1986.