Overview of worldwide bilateral relations

Northern America, Western and Southern Europe

In 2004, the bilateral relations between and the UNITED STATES were highly dynamic and fruitful. First of all, it should be mentioned that on 29 March, the Estonian Prime Minister together with the Heads of Government of other acceding countries deposited Estonia’s North Atlantic Treaty Organisation accession protocol with the Government of the United States. Together with the leaders of the other acceding coun- tries, Prime Minister Parts met with Colin Powell and President George W. Bush. The importance of this event and the role of the United States in the enlarge- ment of NATO cannot be overestimated.

The good relations between Estonia and the United States were also confirmed by the visit of a US Senate delegation led by Senator John McCain. At their meetings with the Estonian leaders, the Senators voiced their appreciation of Estonia’s successful inte- gration in transatlantic and European structures. The Senators also expressed their appreciation of the Estonian military contingent serving in Iraq. In November, Assistant Secretary of State Elizabeth Jones visited Estonia for political consultations at the Ministry of Foreign Affairs, the Ministry of Defence and the .

There was also some progress in economic relations. In December, a meeting between the leaders of US companies situated in Europe and the Baltic political and business leaders was held in London. The Estonian delegation was headed by Prime Minister .

The partnership between Estonia and the United States was also strengthened through EPINE (Enhanced Partnership in Northern Europe) cooperation projects, which aim to develop cooperation in the region and to promote democracy in the neighbouring countries.

CANADA has had a special place in the hearts and minds of the Estonians since the 1950s. The reason for this is the fact that Canada provided shelter and work for thousands of Estonian refugees who left their homes during the last years of the Second World War to escape the second Soviet occupation.

43 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK

In 2004, Estonia and Canada continued their development assistance cooperation. On 16 April, a Memorandum of Understanding was signed by the two countries which allows to finance trilateral assistance projects within ODACE (Official Development Assistance in Central Europe)

Owing to the distance between Canada and Estonia, it is natural that bilateral visits are not very frequent. Chairman of the Riigikogu Ene Ergma paid an unofficial visit to Toronto from 5-6 June 2004 to attend the celebration of the 120th anniversary of the Estonian National Flag, organised by the Estonian community in North America.

In 2004, the first official visit of an Estonian Head of Government to the UNITED KINGDOM since the restoration of Estonia’s independence took place. During the visit, which took place from 17-20 October Prime Minister Juhan Parts met with Prime Minister Tony Blair, Foreign Minister Jack Straw and Defence Minister Geoffrey Hoon. At the meeting between the two Prime Ministers, the economic reforms, the Lisbon strat- egy and the EU’s financial perspective were the main discussion topics. At the initiative of the Estonian side, the European neighbourhood policy, issues related to Russia and Iraq were also discussed. Prime Minister Juhan Parts also met with the Lord Mayor of London, Robert Finch and the Director General of the Confederation of British Industry, Digby Jones. He also paid a visit to the Parliament. Prior to the meetings in London, Prime Minister Juhan Parts visited Scotland where he had meetings with Scottish politi- cians and delivered a speech at Glasgow University.

The most prominent visit from the UK to Estonia was that of the Lord Mayor of London Robert Finch.

In connection with the Irish EU Presidency in the first half of 2004, a considerable num- ber of working visits where exchanged with IRELAND, i.a. the visits by Prime Minister Juhan Parts (February, May), Foreign Minister Kristiina Ojuland (April, May). Irish Prime Minister Bertie Ahern visited Estonia in May. Political consultations between the Ministries of Foreign Affairs took place in November.

Alongside the extensive political contacts, the cultural exchange was also impressive. In connection with the European Union accession, the Estonian Philharmonic Society Chamber Choir and the Chamber Orchestra performed in Galway and Dublin on 1 May. Other Estonian artists also performed in the framework of the “accession pro- gramme”. At the same time a number of top-level Irish artists performed in Estonia.

The most important event in the relations with was the meeting between Chancellor Schröder and Prime Minister Parts in Bremen in conjunction with the return of a painting by Albrecht Dürer and its presentation to the public. The meeting and the din- ner of the two Heads of Governments were characterised by openness and trustfulness.

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Of great symbolic value was the visit of the newly elected Federal President Horst Köhler from 23-24 November. The Federal President’s visit was a part of his tour of the Baltic countries and as this was his first visit abroad it was of great significance for the new member states. The visit underlined Germany’s continued interest in this part of Europe and the destiny of small countries.

As a part of the regular agenda, the annual 3+1 meeting between the Baltic Foreign Ministers and Germany took place on 1 December in the Estonian resort town Pärnu. Topical issues of the EU and the world at large were discussed.

Although no exchange of top-level visits took place in 2004 between Estonia and AUSTRIA, there was a number of important working visits. From the Estonian side Foreign Minister Kristiina Ojuland, Chairman of the Riigikogu Ene Ergma, Minister of Finance Taavi Veskimägi and Minister of Internal Affairs Margus Leivo all paid working visits to Austria. At the same time Austrian Federal Minister of the Interior Ernst Strasser paid a visit to Estonia to familiarise himself with the respective Estonian structures.

The most important event in Estonia’s relations with SWITZERLAND was President Arnold Rüütel’s official working visit to the Swiss Confederation from 17-19 May 2004. The President met with the President of the Confederation Joseph Deiss and Foreign Minister Micheline Calmy-Rey. The main topics discussed were bilateral relations, the European Union and various issues of international politics.

As with the other EU member states, the relations with continued to be active and became even livelier in 2004. One of the most notable events in the bilateral rela- tions took place on 21 October when the first ever Belgian Ambassador to Estonia, resid- ing in Tallinn, Pierre Clément Dubuisson presented his credentials to President Arnold Rüütel. President Arnold Rüütel paid a visit to Belgium in May, during which he opened the new Estonian Mission to the EU. At the practical political level, the security policy consultations that took place between Estonia and Belgium on 19 May deserve a special mention.

Estonia’s cooperation with Belgian regions is a special feature of the bilateral relations. In November 2004, the Estonian-Walloon joint committee prepared a cooperation programme for 2005-2007, as a logical follow-up to a similar programme signed in December 2001.

As is the case with most EU member states, the mutual interest in increased business contacts grew during the year 2004.

During the preparations for the EU Presidency (July-December 2004), the pursued a very active Europe policy and visits were paid to both the member states and the acceding states. In April, Prime Minister paid a visit to Estonia just a few days before Estonia’s accession. The Dutch Prime Minister had meetings with

45 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK

Estonian leaders and familiarised himself with the country. At the same time, he pre- sented his country’s vision and priorities for the Presidency.

During talks with Estonian leaders it became obvious that the visions of the two coun- tries concerning the priorities of the EU in 2004 were much the same – competitiveness, employment and the promotion of economic growth.

In addition to the Prime Minister, a number of other important members of the govern- ment paid visits to Estonia in 2004, like Minister of Defence Kamp, Minister for European Affairs Atzo Nicolaï and others. Generally speaking, it may be said that in 2004 more Dutch ministers and politicians visited Estonia than during all the preceding years.

In 2004, bilateral relations with FRANCE were very lively and friendly. During the year several high-level visits took place. The most prominent of those were the working visits of Prime Minister Juhan Parts, the participation of Defence Minister Margus Hanson in NATO enlargement events and his meeting with the French Minister of Defence Michèle Alliot-Marie, and the visit of the Riigikogu Foreign Affairs Committee . Security policy consultations between the two countries took place in the end of October.

From the French side Defence Minister Michèle Alliot-Marie, Minister of Transport Gilles de Robien, Minister for European Affairs Claudie Haigneré and other prominent French politicians and civil servants visited Estonia during 2004.

In 2004, trade between the two countries continued to grow. For Estonia, the trade bal- ance continued to be negative. France was Estonia’s 13th trading partner.

Relations with GREECE in 2004 can be characterised as “business as usual”. When speak- ing of high-level contacts, it should be noted that the Olympic Games in Athens, which required enormous efforts from the nation, left a distinct mark not only on internal affairs, but also on Greece’s international contacts.

Before the Olympics, Foreign Minister Kristiina Ojuland paid a visit to Athens on 15 June, primarily in connection with her candidacy for the post of Secretary General of the Council of Europe.

During the Olympics, President Arnold Rüütel accompanied by Mrs Ingrid Rüütel, and Minister of Culture Urmas Paet, spent a week in Athens as guests of the International Olympic Committee.

At the same it must be noted that thanks to the Olympic Games an unprecedented num- ber of Estonians visited Greece and especially Athens.

A central theme of bilateral relations with TURKEY was Turkey’s readiness for accession negotiations with the European Union. In June, Estonian-Turkish consultations took place, where the Turkish delegation presented their country’s progress in meeting the

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Copenhagen criteria and harmonisation of legislation. Estonia on its part confirmed its continued support for Turkey’s endeavours.

In September, the Turkish Foreign Minister Abdullah Gül paid a visit to Estonia and met with the President, the Chairman of the Riigikogu, the Prime Minister and the Foreign Minister. It was noted that relations between the two countries were excellent. President Arnold Rüütel underlined that Estonia was interested in both economic and defence cooperation with Turkey. Estonia welcomed the extensive political and economic reforms carried out by Turkey.

It is only natural that the relations with CYPRUS in 2004 were more active than ever before. At the beginning of the year, President Arnold Rüütel paid an official visit to Cyprus accompanied by a business delegation. As members of the group, the two countries have had considerable common interests and cooperation over the past years. Active relations with Cyprus form a natural part of Estonia’s goal to strength- en bilateral relations with the Mediterranean EU member states.

In October, the Cypriot President Tassos Papadopoulus paid a visit to Estonia during which further possibilities for developing cooperation between the two countries were discussed.

In 2004, the bilateral relations with ITALY were remarkably lively. Immediately before Estonia’s accession to the European Union, two significant visits took place. The Italian Deputy Prime Minister Gianfranco Fini, currently the Foreign Minister, paid a visit to Estonia at the end of March and in April, President Azeglio Ciampi was on a state visit. During both visits, the Italian side stressed that Italy has always regarded Estonia as an integral part of Europe and that accession to the EU meant that Estonia was coming back home. Deputy Prime Minister Fini underscored that both Italy and Estonia are EU border states and this implies the need for close cooperation in the sphere of common security. President Ciampi found on his part that increased cultural contacts between the two countries were important for bringing their people closer to each other. It was also underlined that economic contacts could be expanded and that there is plenty of room for Italian direct investments into Estonia.

In 2004, bilateral relations with SPAIN were not very rich in prominent visits and events. However, the opening of the Spanish Embassy in Tallinn in March should be regarded as a landmark, which can have a strong impact on the development of bilateral cooperation.

In February, Prime Minister Juhan Parts visited Madrid where he participated in the Christian Democratic and People’s Parties International. In March, President Arnold Rüütel visited Madrid and attended the memorial service for those killed in the March 11 terror attacks. The regular political consultations between the Ministries of Foreign Affairs were held in Tallinn in November.

47 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK

Due to the distance of PORTUGAL from Estonia and the relatively modest size of both countries, the bilateral relations between Estonia and Portugal are good but not very lively. They have, however, become more active during the past few years when the pros- pect of Estonia joining the EU grew more and more realistic. The highlight of 2004 was Prime Minister Juhan Parts’ official visit to Portugal in April.

Northern, Central and Eastern Europe

The two most significant events for Estonia in the foreign policy realm during the year 2004 – accession to the European Union (EU) and the North Atlantic Treaty Organization (NATO) – have, on the multilateral level, significantly intensified Estonia’s relations with the Nordic countries, at the same time adding an extra dimension to bilateral relations. Of central importance has become cooperation based upon common interests with Finland, Sweden, and Denmark within the EU. Even more active has become defence cooperation with our Nordic NATO partners, as well as with Sweden and Finland, which are not members of the Alliance. Estonia’s membership in NATO, together with the fact that the Estonian Embassy in Helsinki was, on September 1, designated to be the NATO Contact Point Embassy in Finland, has broadened the, till now, essentially bilateral defence cooperation network.

Economic cooperation with the Nordic countries, which continue to be the biggest foreign investors in Estonia, was solidified even more with the signing, last year, on February 11, of the agreement concerning Estonia’s joining of the Nordic Investment Bank (NIB), of which, Estonia is, since 1 January 2005, a full member. On the one hand, this confirms the credibility of the Estonian economy, and on the other, has a positive impact upon Estonia’s entrepreneurship and economic growth. Thanks to the simpli- fication, since our EU accession on May 1, of border crossing procedures and other formalities concerning international travel, Estonia is becoming ever more popular as a destination for tourists from the Nordic countries.

The diversification of Estonia’s traditionally close and good relations with FINLAND has been greatly promoted by the so-called Wise Men’s Report of 2004. Since its adoption, it has been thoroughly analyzed in both Estonia and Finland, thus becoming the basic document for establishing cooperation in the matter of systematizing very extensive relations. The various subjects dealt with in the Report have, during the year 2004, con- stantly been on the agenda of bilateral ministers’ meetings. And in most spheres, direct and active relations have been established between the appropriate experts of the two nations, the promotion of which is one of the basic recommendations of the Report.

Among the most important events in the development of bilateral relations, mention should be made of: the appointment of a permanent Estonian police representative to Finland in March of 2004; the greater bilateral cooperation between law enforcement

48 2004 OVERVIEW OF WORLDWIDE BILATERAL RELATIONS

agencies; the expansion of the activities of FINESTO (the Estonian-Finnish anti-narcot- ics working group) into the sphere of combating economic crime; active cooperation in the banning of single-hull tankers as well as in the prevention of oil pollution in the Baltic Sea; and the launching of GOFREP, the trilateral (Estonian-Finnish-Russian) sys- tem for monitoring navigation.

Major steps were also taken for the further development of bilateral relations in the edu- cational and scientific sphere: in the spring of 2004, a working group was established for the systematic coordination of Estonian-Finnish educational cooperation, and on May 26, in Helsinki, the prime ministers of both countries participated in the first joint ses- sion of the Finnish Council for Research and Technology and the Estonian Council for Research and Development.

Estonian-Finnish economic contacts have continued to develop and there has been a growth in bilateral trade. Finland continues to be Estonia’s biggest trading partner. Since 2001, Estonia has had a positive balance of trade with Finland. At the end of the first half- year of 2004, the balance was 155.9 million EUR (2.4 billion EEK) in Estonia’s favour.

By mid-2004, Finnish investments in Estonia amounted to 1.51 billion EUR, which con- stitutes 25.6 % of all foreign direct investments in Estonia. Presently there are1,975 firms registered in Estonia with partial Finnish ownership.

Estonia is the main foreign destination for our northern neighbours travelling abroad -- almost one third of all trips abroad by Finns are made to Estonia. During the first half of 2004 alone, almost half a million Finnish citizens visited Estonia.

In conjunction with Estonia’s accession to the EU, the biggest and, for the Finnish gen- eral public, most accessible event, to date, for introducing Estonia was held in Helsinki. In the course of three days (May 7 – May 9) the Finnish capital’s attention was focused upon Estonia in the city’s main square, where visitors were able to familiarize themselves with the best that we have to offer, be it in the cultural, tourism, handicrafts, or culinary sphere. More than 100 Estonian firms participated in the Estonian Days organized by Enterprise Estonia, with almost 400 performers taking part in the cultural programme. During the three days, close to 200,000 people visited the event.

The year 2004 can be characterised by traditionally close and constructive relations between Estonia and SWEDEN. In addition to high-level visits -- the Estonian prime minister, foreign minister, and speaker of the Riigikogu visited Sweden -- numerous working meetings took place between members of the respective cabinets as well as between government officials at various levels.

In September, the tragic events of 60 years ago, when the World War II Estonian boat refugees arrived in Sweden, were commemorated in both countries. In the autumn of 1944, as Soviet troops re-occupied Estonia, an estimated 25,000 Estonians fled across the

49 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK

Baltic Sea to Sweden. At Dalarö, near Stockholm, where many of the refugee boats had landed, a memorial named Departure and Homecoming was unveiled as an expression of gratitude to Sweden for the help and support given to the refugees. This monument also honours those Estonians who succeeded in reaching the sanctuary of Sweden, as well as pays tribute to the unfortunate ones who found a watery grave in the Baltic Sea. At the Museum of Occupations in Tallinn, there is an exposition dedicated to the boat refugees, which was opened by the Swedish minister for coordination, Pär Nuder (cur- rently the finance minister), who is himself an offspring of Estonian boat refugees. In addition to the aforementioned 25,000 Estonian boat refugees, almost the whole 7,000 member coastal Estonian-Swedish community was evacuated, during the War, to the land of their forefathers. At present, about 10,000 Estonians live in Sweden.

The lively economic relations between Estonia and Sweden are being strengthened even more by the Swedish decision not to apply any restrictions on the free movement of labour after the enlargement of the EU.

Sweden continues to be the biggest foreign investor in Estonia. According to the Bank of Estonia, by the end of the first half of 2004, Sweden had a 42% share of foreign invest- ments made in Estonia. At the end of 2004, 763 firms listed with the Estonian Commercial Register were owned by Swedish capital.

Since 1998, Estonia has had a positive balance of trade with Sweden, as was the case in 2004.

In March, the new car ferry Victoria was put into service between Tallinn and Stockholm, and in the fall, Estonian Air, the national carrier, opened a new line between Tallinn and Gothenburg. The expansion of travel opportunities has given a new boost to the devel- opment of tourism -- during the first half of 2004, the number of Swedish tourists visiting Estonia increased by more than 20%, compared to the same period in 2003.

Estonia’s traditionally close cooperation with DENMARK and the development of bilat- eral contacts at various levels continued in 2004, with the highlight of the year being President Arnold Rüütel’s official visit to Denmark on September 13-15. Another good example of the constant bilateral exchange of information and the flexible relations, which exist at the governmental level, is Foreign Minister Kristiina Ojuland’s visit to Denmark, as are the reciprocal visits paid by the defence ministers of the two coun- tries.

In addition to matters concerning the EU and NATO, Estonian-Danish relations have also been focused upon renewable energy and wind parks, which has stimulated Estonian developments in this sphere. With the participation of Danish capital, one wind park project has already been started in Estonia and another one is under way.

In the sphere of economic relations, it should be noted, that between June 2003 and June

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2004, Danish investments in Estonia increased by about 1 billion EEK (64 million EUR).

The volume of trade between the two countries is also showing a rising tendency. During the first half of 2004, there was a 7.5% increase in trade, as compared to the same period in 2003. Denmark is presently Estonia’s eighth biggest trading partner.

Estonia’s relations with the NORWAY, during the year 2004, were focused upon the preparations being made for the launching of the bilateral financial mechanism ensuing from the European Economic Agreement (EEA). Within the framework of the financial mechanism, Norway will provide Estonia, in the period 2004-2009, with financial aid in the amount of 22.6 million EUR or, in other words, 4.5 million EUR a year. The prepara- tions culminated on November 17 with the signing of a memorandum of understanding for the implementation of the financial mechanism, and with a well-attended seminar covering the nuances of the mechanism.

The fact that Norwegian business circles continue to invest in Estonia is proof of Estonia’s continued, or even growing, economic credibility. In this sphere, mention must be made of the almost 1 billion EEK Norwegian investment in a wood pulp mill in the town of Kunda, which is located in the economically depressed north-eastern region of Estonia. The mill will start operating in 2006. Mention should also be made of Norwegian invest- ments and participation in renewable energy projects such as the Pakri wind park.

2004 also showed that the Estonian Air Tallinn-Oslo direct route, established in 2003, has justified itself financially, and has significantly boosted travel between the two coun- tries.

The highlight of Estonia’s relations with ICELAND, in the year 2004, was the state visit of President Arnold Rüütel to the island nation in May. During the visit, both global matters and bilateral issues were discussed. As for the latter, there are prospects for increased cooperation, especially in the realm of commercial fishing.

In addition to our partnership in NATO, relations between Estonia and Iceland have, since Estonia’s EU accession, grown ever closer, thanks to the EEA. In addition to Norway, the biggest contributor to the EEA financial mechanism, Estonia also receives financial support for its priority projects from Iceland.

Estonia continues to regard cooperation with its Baltic neighbours of Latvia and Lithuania as being of the utmost importance. In addition to our traditional trilateral cooperation, there has been an increase, during the last few years, in the development of bilateral relations on various levels and in various spheres. This has been prompted by our similar foreign policy priorities as EU and NATO Member States, in the coordina- tion of various cooperative policies, in the economic realm, and within international organisations.

51 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK

In the year 2004, Estonia’s relations with LATVIA were traditionally active, being char- acterized by a smoothly functioning mechanism for maintaining contacts and holding regular meetings. The usual close bilateral cooperation on the governmental, parlia- mentary, and local administration levels was given added value by events like the hold- ing of the worldwide Estonian festival ESTO (which takes place every four years in a city with a noteworthy Estonian community) in Riga, bringing thousands of Estonians from all over the world to the Latvian capital. Of historical significance was the joint high- level commemoration of the 85th anniversary of the Battle of Cesis (in Latvia, near the Estonian border), where, during the Latvian and Estonian struggle for independence (1918 – 1920), a joint Estonian-Latvian force routed an army of Baltic-Germans and German mercenaries, which was trying to subjugate the two Baltic countries.

Of the official visits that took place, special mention should be made of the Latvian prime minister Indulis Emsise’s visit to Estonia in April. Due to changes that took place in the Latvian government, even two foreign ministers made introductory visits to Estonia -- Richard Piks in April and Artis Pabriks in August. In addition to these official visits, the Latvian president, Vaira Vike-Freiberga, and the speaker of the Latvian parlia- ment, Ingrida Udre, attended the Estonian Song Festival in July.

The traditionally active bilateral parliamentary relations were especially vigorous in 2004 due to the Latvian chairing of various Baltic cooperative endeavours on the state level.

In 2004, a boost was also given to regional cooperation between the two countries. At the beginning of July, the Estonian-Latvian Joint Commission for Cross Border Cooperation held its first session, where joint sub-commissions were established for the drafting of plans dealing with the future of Southern Estonia and Northern Latvia as a cooperative region. Also in 2004, negotiations were successfully concluded for establishing a sea and air link between Estonia’s largest island, Saaremaa, and the Latvian port city of Ventspils.

Estonian-Latvian economic relations are developing every year. In 2004, more than 1,000 firms operating in Latvia had full or partial Estonian ownership. At the moment, one third of all Estonian foreign investments have been made in Latvia. This consti- tutes 7% of all foreign direct investments made in that country, thereby placing Estonia among Latvia’s six biggest foreign investors.

The year 2004 was no exception when it came to Estonia’s good and close relations with LITHUANIA. Of the official visits, the highlight was President Arnold Rüütel’s state visit to Lithuania on October 4-6. In addition to various meetings with the country’s political elite, President Rüütel was familiarized with Zokniai airfield and the NATO planes sta- tioned there, which help to secure the Baltic air space. Mention should also be made of Foreign Minister Kristiina Ojuland’s working visit to the country on April 23.

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Estonia’s economic relations with Lithuania have also been improving from year to year. Lithuania is continually the foreign country where Estonians most like to invest their money -- almost 45% of all direct investments made by Estonian firms in foreign coun- tries are made in Lithuania. At the same time, Lithuanian business circles are increasing their investments in Estonia.

Trading between the two countries is continually increasing. During the first half of 2004, trade between the two countries grew by 34%, as compared to the same period in 2003. But, since 2001, Estonia has had a negative balance of trade with Lithuania, with the bulk of Estonian imports from that country consisting of fuel processed at the Mazheikiai oil refinery.

Characteristic of the relations with the VISEGRAD COUNTRIES AND SLOVENIA during the year 2004 were numerous high-level visits and intensive cooperation at the working level. A general rapprochement with Central European countries has taken place due to the accession to the European Union and also the common experience ensuing from the shared heritage from the past half century.

Estonia’s relations with POLAND, its biggest trade partner in Central Europe, continued to be active and rich in contacts. Among high-level visits that of Prime Minister Juhan Parts on September 28 - 30 deserves special mention as the first specific head of govern- ment visit to Poland since 1930. Understandably the primary topic discussed during the visit was that of the EU.

Earlier in the summer, on June 21 the Polish Prime Minister Marek Belka paid a short visit to Estonia in connection with the Baltic Sea States Summit where Estonia handed over the chairmanship of the Baltic Sea States Council to Poland.

Active contacts at the parliamentary level peaked with an official visit of the Speaker of the Polish Sejm, Józef Oleksy on November 8-9. At the meetings in connection with the visit the importance of the role of national parliaments in the EU as well as the exchange of ideas about the eastern policies and enlargement were the central issues.

Parallel to high-level meetings consultations between officials of the Foreign and Defence Ministries on various issues of mutual interest continued as usual.

As the highlights in relations with HUNGARY in 2004 may be regarded the working visit of President Arnold Rüütel to Hungary on April 5-7, during which Arnold Rüütel was awarded the honorary doctorate of Gödöllö university, and the working visit of the presi- dent of the Republic of Hungary, Ferenc Mádl to Estonia on August 15-17 in conjunction with the 4th world congress of the Finno Ugric peoples.

As Estonia and Hungary are both Finno Ugric states, cultural relations have always had a significant role in the bilateral relations, in which Estonian Institute in Budapest

53 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK

and Hungarian Institute in Tallinn have played a prominent role. On January 30, 2004 the Hungarian minister of culture, István Hiller , inaugurated the new premises of the Hungarian Institute in Tallinn.

Trade between Estonia and Hungary has been growing from year to year. In 2004 Estonian exports to Hungary increased considerably and Hungary became one of Estonia’s most important export partners.

Also the relations with the CZECH REPUBLIC were characterised by a number of high- level visits and frequent contacts on the level of officials. Of visits the offical visit of the chairman of the Czech chamber of deputies Lubomir Zaorálek should be mentionend. The main topics discussed were those connected with the European Union and regional cooperation. The Czech delegation also visited the island of Saaremaa in order to meet the representatives of local governments and find ways for developing bilateral contacts at regional level and promotion of tourism.

On October 4 a delegation of the committee on European Affairs of the Czech Senate, headed by its chairman Jiří Skalický visited Estonia.

Good cooperation in the field of defence was confirmed by the visit of the Czech minis- ter of defence Miroslav Kostelka on January 16.

In 2004 traditional meetings between the officials of the foreign and defence ministries also took place, both in Tallinn.

In the bilateral relations with SLOVAKIA the most significant event was the working visit of the vice prime minister of Slovakia for EU and minorities’ affairs, Paul Csàky, to Estonia. The discussions which took place during the visit confirmed that Estonia and Slovakia have to a large extent common views on the issues related to the EU.

In September the Estonian minister of defence Margus Hanson paid an official visit to Slovakia, during which a bilateral agreement on classified information was signed.

Good relations between various state institutions of Estonia and SLOVENIA continued to develop also during 2004, exemplified by the contacts between the parliamanets of the two countries. In February the foreign affairs committee headed by its chairman Jelko Kacin visited Estonia. The most prominent bilateral visit of the past year was the official visit of the Estonian foreign minister Kristiina Ojuland to Slovenia on March 7-9, during which it was noted that the excellent political relations between the two countries need to be complimented by more active economic relations.

Estonia’s foreign policy concerning SOUTH EAST EUROPE AND WESTERN BALKANS has been growing steadily during the past years. During 2004 notable progress was also made in the bilateral relations with the countries of the region.

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Relations with both BULGARIA and ROMANIA increased in 2004. During the high-level visits of the year and bilateral meetings it was noted that the bilateral political relations were excellent as confirmed best by the well-working cooperation in the NATO, admit- ting at the same time the need to activate economic cooperation. A good basis for the development of bilateral relations is the interest of both Bulgary and Hungary in the experience Estonia gathered during its accession to the EU.

Of the bilateral visits the official visit by Foreign Minister Kristiina Ojuland to Bulgaria on February 29 – March 2 aroused most attention. During this visit an agreement on cooperation in the field of education and culture was signed. On March 1 there was also a seminar on IT matters where Foreign Minister Kristiina Ojuland held the key-note speech. Estonia’s experience of the integration into the EU was also the main theme discussed at the meetings with the Bulgarian prime minister Simeon Saxe-Coburg Gotha during his official visit to Estonia on October 18.

Among the bilateral contacts with Romania during 2004 the most noteworthy were the official visit of Foreign Minister Kristiina Ojuland to Romania on April 5-6 and the visit of the Romanian minister for European Affairs, Alexandru Farcas to Estonia on September 14.

Estonia’s experience in the field of European integration is considered valuable also in CROATIA. With the aim of making acquaintance with the Estonian experience and discuss Croatia’s plans the secretary of state of the Croatian ministry of foreign affairs Godan Bakota visited Estonia on June 2 having meetings with a number of high officials of the Estonian foreign ministry.

The biggest event in the bilateral relations between Estonia and Croatia was probably the visit of Foreign Minister Kristiina Ojuland to Croatia on March 30-31 during which the minister besides meeting her colleague also had the opportunities to meet the President, the Prime Minister, the Speaker of the Parliament and other members of the parliament. Besides an aviation agreement between the two countries was signed.

In relations with ALBANIA, BOSNIA AND HERZEGOVINA, MACEDONIA and SERBIA and MONTENEGRO, Estonia has demonstrated its positive engagement primarily in two ways: firstly, through participation in development cooperation, and preparedness to transfer its reform and eurointegration experience, secondly through participation in the international military and police stabilisation forces for a number of years already

Of bilateral contacts political consultations between the foreign ministries of Estonia and ALBANIA on April 20-21 in Tirana deserve mention. On November 25 Estonia’s first ever ambassador to Albania Peep Jahilo presented his credentials to President Alfred Moisu.

In 2004 the first high-level visit in the history of the relations between Estonia and BOSNIA and HERZEGOVINA took place – on October 18-19 the foreign minister of Bosnia

55 2004 ESTONIAN MINISTRY OF FOREIGN AFFAIRS YEARBOOK

and Herzegovina Mladen Ivanić paid an official visit to Estonia. The aim of the visit was to gain Estonia’s support to his country’s endeavours in its rapprochement with the EU and NATO/PfP. BH has demonstrated great interest in the Estonian experience in both areas. A protocol on cooperation between the foreign ministries of the two countries was signed.

Last year relations between Estonia and MACEDONIA also gained momentum. On February 12-13 the defence minister (currently prime minister) of Macedonia Vlado Buchovski paid an official visit to Estonia. On 19 April political consultations between the foreign ministries took place where among other topics the European and transat- lantic integration of Macedonia were discussed.

As milestones in Estonia’s relations with SERBIA and MONTENEGRO the presentation of his credentials by Estonia’s first ambassador Mart Laanemäe to the president of Serbia and Montenegro on April 8 and the first official visit of Foreign Minister Kristiina Ojuland to Belgrade and Podgorica on May 2-4, 2004. Serbia and Montenegro like other nations of the region are interested in Estonia’s experience of European integration and regional cooperation as well as Estonia’s support for their foreign policy goals. In Belgrade the central theme was Kosovo, while in Podgorica Estonia’s experience of liberalisation of trade and attraction of foreign investments were the main topics.

Estonia’s relations with RUSSIA in 2004 followed the general pattern, which has evolved over a number of years. Estonia proceeds in its relations with Russia from the principle of constructive partnership and is willing to continue a political dialogue, which takes into consideration the interests of both parties. Positive developments in Estonia-Russia relations are possible only if both sides show a political will for real dialogue.

Despite the fact that there is plenty of room for positive development and regardless of the frequent propaganda attacks against Estonia from the Russian side, last year also saw some positive signs in the bilateral relations with Russia. A number of significant meetings took place. In December, in conjunction with the meeting of the NATO-Russia Council, a bilateral meeting between Foreign Ministers Ojuland and Lavrov took place in Brussels. Earlier, in September, Foreign Minister Ojuland paid a visit to St. Petersburg where she also met with Governor Matviyenko. In February 2004, political consultations between the Foreign Ministries of the two countries took place.

Estonia’s accession to NATO and the EU has added a new dimension to Estonia-Russia relations. As it is in Estonia’s interests that Russia, as its neighbour, were a full-fledged democracy, Estonia as a member state of the EU has constantly reiterated the impor- tance of a constant and candid dialogue with Russia. When speaking of tangible posi- tive effects of Estonia’s accession to the EU, the abolition of double tariffs, which Russia introduced on Estonian exports in 1995, is worth mentioning. Russia has also indicated its readiness to sign the border agreement initialled in 1996 and 1999.

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These signs of an emerging positive trend give reason to hope that the EU’s consistent common Russia policy will bear good fruit.

The relations between Estonia and UKRAINE were just as lively and positive in 2004 as previously. Ukraine continues to be an important political partner for Estonia and can be considered as one of our priorities in the EU. Owing to the common experience of the past and the rapid reform process, which Estonia has successfully undergone, the Ukrainians have generally a very positive attitude towards Estonia.

Several high-level visits from the Ukrainian side were postponed in 2004 due to the elections. The only high-level bilateral visit of the year was the official visit of Foreign Minister Kristiina Ojuland to Ukraine from 10-12 May.

In 2004, Estonia continued to give technical assistance to Ukraine. Within the framework of cooperation between the Estonian School of Diplomats and the Ukrainian Diplomatic Academy, young Ukrainian diplomats received training in matters related to NATO and the European Union in Tallinn.

In the fall of 2004, a 4-year multilateral Canadian-Ukrainian-Baltic project came to an end. The project called CUBEMTP (Economic Management Training Program) was received with great interest by the Ukrainian side and it proved to be a great success. Considering the success of the project, the parties are considering the possibilities for a follow-up in 2005.

As for economic relations between Estonia and Ukraine, Estonia’s accession to the European Union had a certain impact on trade between the two countries as it brought about the annulment of the FTA between Estonia and Ukraine. The negative effects were not as grave as anticipated by some analysts, and in fact, the trade between Estonia and Ukraine continues along the traditional lines. The trade balance with Ukraine is continu- ously negative for Estonia. Ukrainian businesses have shown rather little interest in invest- ing in Estonia. At the same time, according to the Bank of Estonia, Estonian businesses have steadily increased their investments in Ukraine. Estonian investments in Ukrainian amounted to 416 million Estonian kroons (26.6 million EUR) as of September 2004.

The very good and rapidly developing Estonian and GEORGIAN bilateral relations were marked by the official visit of Georgian President Mikheil Saakashvili and his delegation to Estonia from 12- 13 October 2004. The delegation included Foreign Minister Salome Zourabichvili and Minister of Defence Giorgi Baramidze. President Saakashvili met with President Arnold Rüütel, Prime Minister Juhan Parts, Foreign Minister Kristiina Ojuland, Chairman of the Riigikogu Ene Ergma and others.

The meetings focused on the Georgian reform process, international issues and bilateral relations.

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Estonia welcomed the inclusion of Georgia and other South Caucasus States into the European Neighbourhood Policy and stressed the importance of Georgia taking full advantage of the provided opportunities.

The Georgian side expressed the hope for Estonian support for their desire for closer cooperation with the EU and Euro-Atlantic structures, while the Estonian side under- lined Estonia’s determination to support Georgia’s democratic development. Both sides underscored the importance of close cooperation between Estonian and Georgian authorities with the aim of promoting the reform process by taking advantage of Estonia’s experience, by training civil servants on European integration issues, by developing a communication strategy to inform the society about European integra- tion, by conducting consultations, conferences and other activities on issues related to European integration, by developing legislation and obtaining the best practices in good governance, and by promoting public e-services.

During the visit an agreement was signed on the avoidance of double taxation and pre- vention of fiscal evasion with respect to taxes on income and capital. Also a joint state- ment was released to the public.

The Presidential visit was preceded and followed by other Georgian-Estonian activities throughout the year: Estonian experts were present as OSCE ODIHR observers at the Georgian Presidential Elections; Minister of Foreign Affairs Ojuland met with Georgian President Saakashvili and Georgian Minister of Foreign Affairs Japaridze in Strasbourg; Prime Minister Parts met Georgian President Saakashvili at a NATO meeting in Slovakia; Chairman of the Foreign Affairs Committee of the Estonian Parliament Marko Mihkelson together with Committee member Ivanov visited Georgia on different occasions – to mention just a few of the most outstanding occasions. Another noteworthy project is that a defence policy planner from the Estonian Ministry of Defence has been working, as an adviser to the Georgian Ministry of Defence, helping the country prepare for NATO since June 2004.

Foreign Minister Kristiina Ojuland and Foreign Minister Vardan Oskanian met in March at a UN meeting in Geneva. In April 2004, Estonian Ambassador to ARMENIA, residing in Athens, Andres Unga presented his credentials to Armenian President Robert Kocharian.

The Foreign Affairs Committee of the Estonian Riigikogu visited Armenia in May.

President Arnold Rüütel and his delegation paid an official visit to Armenia from 13-16 November 2004. The delegation included Minister of Culture Urmas Paet, Minister of Regional Affairs Jaan Õunapuu, State Secretary Heiki Loot and a business delegation headed by President of Estonian Chamber of Commerce and Industry Toomas Luman. President Rüütel met with President Robert Kocharian, Prime Minister Andranik

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Margaryan, Chairman of the Armenian National Assembly Artur Baghdassaryan and His Holiness Garegin II.

The meetings concentrated on bilateral relations, the European Neighbourhood Policy and international issues. Estonia welcomed the inclusion of Armenia and other South Caucasus States into the European Neighbourhood Policy and stressed the importance of Armenia taking full advantage of the provided opportunities. Special attention was paid to the mutual interest for cultural and economic cooperation.

President Rüütel also opened an Estonian-Armenian business seminar and held a speech at the University of Yerevan.

Asia

The 5th Summit of the Asia Europe Meeting In 2004, on 8-9 October, the 5th Asia Europe Meeting Summit (ASEM) took place in Vietnam’s capital of Hanoi. This was the first enlargement of this Asian-European coop- eration forum. Ten European Union (EU) Member States (including Estonia) and three Asian states (Kampuchea, Laos, and Myanmar) became full ASEM Partner States. Prime Minister Juhan Parts, greeted the forum in the name of the acceding EU states. Within the framework of the Summit, Parts had a bilateral meeting with Prime Minister Wen Jiabao of China.

Participation in the ASEM process gives Estonia an excellent opportunity to associate with Asian states on a completely new level and within new formats. Through ASEM, small EU states, like Estonia, have broader possibilities for achieving their foreign eco- nomic policy objectives in Asia as a whole.

In 2004, the most important event in the development of Estonian-Japanese relations was President Arnold Rüütel’s and Mrs. Ingrid Rüütel’s official visit to JAPAN from 30 October to 4 November. The head of state was accompanied by Communications Minister Andrus Ansip; the president of the Bank of Estonia, Vahur Kraft and various government officials; as well as a 22-member business delegation.

The subjects discussed at President and Mrs. Rüütel’s audience with Emperor Akihito and Empress Michiko were the environment, a matter close to the heart of both heads of state, as well the development of bilateral cultural and economic cooperation. The president had the opportunity to extend to the emperor an official invitation to visit Estonia.

President Rüütel met with Prime Minister Koizumi, to whom he also extended an invita- tion to visit Estonia, and had dinner with Foreign Minister Machimura.

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Since there are no political problems marring Estonian-Japanese relations, it was pos- sible to devote the visit mostly to the development of economic cooperation. Several Japanese firms were visited, and there were opportunities to meet with influential busi- ness figures, like the vice president of Keidanren (Japanese Business Federation), Mr. Sasaki, who had headed the Keidanren delegation’s visit to Estonia in March. Among other things, a business seminar was held to introduce Estonia to local business circles, which was attended by the representatives of 60 Japanese firms.

In 2004, Estonia’s relations with South Asian states progressed amiably, just as in earlier years. But there is, of course, plenty of room for further development in the domains of economic relations, as well as cooperation in the fields of culture, education, and tourism.

A noteworthy event exemplifying Europe’s greater interest in that part of the world was the proclamation of INDIA into a Strategic Partner of the European Union.

In the realm of Estonian-Indian relations, mention must be made of the active cultural exchange between the two countries. Many acclaimed Indian musicians performed in Estonia, among them, the famous violinist and Johan Ali Khan and flau- tist Pandit Amar Nath. Much of this activity took place thanks to the Indian Cultural Association of Estonia, which was founded at the end of 2003.

In 2004, relations with can be described as having been close, which includes continued cultural cooperation. In May, for instance, the Estonian born Israeli com- poser Avi Benjamin’s musical “Devil in Moscow” (based upon Mihhael Bulgakov’s novel “Master and Margarita”) was performed in Tallinn’s historic Estonia Concert Hall.

Estonian-Israeli political and economic consultations took place in on 16-18 November. The Estonian delegation was headed by the Foreign Ministry’s under-sec- retary for political affairs, Tiina Intelmann. Under discussion were the development of economic cooperation, the Middle East conflict, European Union (EU)-Israeli relations, and several other relevant foreign policy themes.

The year’s most significant event in the realm of Estonian-Israeli relations was Prime Minister Juhan Parts’s official visit to Israel on 30-31 December. The prime minister’s two-day visit to Israel focused, in addition to the intensification of bilateral relations, upon the general situation in the Middle East and EU-Israeli relations. At the meeting with Ariel Sharon, the two prime ministers confirmed that Estonia and Israel have good relations, especially in the cultural and educational spheres. But they noted, that there was plenty of room for development in the realm of economic cooperation. Both prime ministers expressed hope, that the visit will give a substantial impulse to the intensifica- tion of business contacts. Prime Minister Parts also met with President Moshe Katsav and the Knesset’s speaker, Reuven Rivlin. The Estonian prime minister visited the Yad

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Vashem Holocaust Memorial complex in Jerusalem, where he had the opportunity to participate in a remembrance ceremony for the victims of the Holocaust. Prime Minister Parts also visited Tel Aviv University, as well as a high-tech business incubator financed jointly by the government and private capital.

European Union-Mediterranean (EUROMED) Cooperation, or the Barcelona Process

At the Dublin EUROMED Foreign Ministers’ Meeting, Estonia was represented by a delegation headed by the Foreign Ministry’s under-secretary for political affairs, Tiina Intelmann. The Dublin discussions focused upon increasing the effectiveness of the Barcelona Process, and the supporting of reforms in South and East Mediterranean states. Among other things, it was decided, that the EUROMED foundation for inter-cul- tural dialogue, founded in 2003, would be named The Anna Lindh Euro-Mediterranean Foundation for the Dialogue between Cultures. The Foundation’s head office would be in the Alexandria Library in Egypt, and will work very closely with the Swedish Institute.

At the EUROMED Foreign Ministers’ Meeting in The Hague on 29-30 November, Foreign Minister Kristiina Ojuland, participating in the plenary session’s panel discussion about inter-cultural dialogue, announced, that Estonia would support the Anna Lindh Foundation with 10,000 EURs. The aim of the Foundation is to develop dialogue for an increased understanding between European, Mediterranean, and Middle East coun- tries.

Iraq

On 4-5 November, Defence Minister Margus Hanson visited Iraq, where he met with his Iraqi counterpart, Hazim al-Shalaan; the commander of the coalition forces, General George Casey; as well as the division and battalion commanders under whom the Estonian military personnel in that country are serving. Defence Minister Hanson was familiarised with the security situation, and the difficulties involved with the rebuilding efforts in that country. There were extensive discussions concerning the preparations for the then upcoming Transitional National Assembly elections. Defence Minister Hanson also had an opportunity to meet and talk with the Estonian military personnel serving in cargo-handling team CT-3 and light infantry platoon ESTPLA-9.

Latin America

The European Union, Latin American, and Carribean Summit,or Guadalajara Summit The conference of the heads of state and governments, as well as foreign ministers, of 58 European Union (EU), Latin American, and Carribean states in Guadalajara, Mexico, on 28-29 May, or the Guadalajara Summit of May 2004, was the first international summit

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where Estonia participated as an EU Member State. Estonia was represented by Prime Minister Juhan Parts and the Foreign Ministry’s under-secretary for political affairs, Tiina Intelmann.

To discuss matters concerning effective multilateralism and social cohesion, the del- egates were divided into three so-called working tables, with Prime Minister Parts being in the one headed by Chile’s president, Ricardo Lagos Escobar. In his address, Prime Minister Parts stated that multilateralism is of special significance for Estonia, since, for 50 years, Estonia did not have the opportunity to participate in international decision- making, whereas now, Estonia is a full member of both the EU and the United Nations.

The Estonian delegates had an opportunity to further broaden Estonia’s foreign relations at a special meeting of the Cariforum 16 states and the EU’s 10 new Member States. There were also bilateral meetings within the framework of the Summit. Prime Minister Parts was able to meet with Panama’s first vice president, Arturo Ulises Vallarino Bartuano, and the prime minister of Barbados, Owen Seymour Arthur.

Before leaving the Summit, Prime Minister Parts also had the opportunity to meet with Alvaro Uribe Vélez, the president of Colombia. Since relations between the states of the Andean Community (Bolivia, Colombia, Ecuador, Peru, and Venezuela) and the Baltic Sea region states are not yet well developed, the prime minister proposed, that joint discussions be held much more regularly. And also, that a several-year programme be drawn up, in which, the main focus would be upon cultural exchange. Estonia and Colombia could be the main “instigators” of this process, and, in addition to the three Baltic states, Sweden and Finland could also be invited to join this initiative.

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