(NOTE: This article is in the public domain; there are no restrictions on republication. Please use the following credit line: This article originally appeared in The Wall Street Journal Europe and the Svenska Dagbladet.)

HOW TO HELP THE BALTIC RIM

By Lyndon L. Olson, Jr.

U.S. Ambassador to Sweden

STOCKHOLM -- "America's security is tied to Europe, and Europe will never be fully secure if Baltic security is in doubt." These words, spoken by President Bill Clinton at the signing of the U.S.-Baltic Partnership Charter at the White House in January, underscore the deep commitment of my country to ensuring the integration of the Baltic states -- Estonia, Latvia and Lithuania -- into the great institutions of Europe. This policy, in turn, makes our partnership with the Nordic countries of paramount importance. The entire regional approach is enshrined in the U.S. government's Northern European Initiative.

This week, the initiative will receive an added push when the U.S. Embassy in Stockholm sponsors a conference highlighting the growing American presence in the Baltic Sea region. The conference will bring together high-ranking officials from all the Baltic Sea states and the United States, as well as prominent businessmen, legislators and NGO leaders to discuss the great opportunities and challenges that face Europe's fastest growing region.

This initiative is based on three straightforward objectives:

The first is to strengthen U.S. ties with our traditional regional partners, the Nordic countries. Our ties with Sweden, for example, are enhanced now that Sweden is both a member of the European Union and of the North Atlantic Treaty Organization's Partnership for Peace program. We are working with our Nordic and Baltic partners in a number of concrete ways to fight organized crime, clean up nuclear waste, prevent the spread of tuberculosis, and create greater commercial opportunities in the region.

Our second objective is to help the new market economies of the Baltic Rim -- the Nordic countries, the Baltic states, Russia, Poland and Germany -- to prosper and to become good candidates for membership in such key institutions as NATO, the EU, and the World Trade Organization. We all recognize the significant market potential of a region with 100 million consumers. These new market economies are already some of the world's fastest-growing. Moreover, the region functions as a gateway to the wider mainland markets around Warsaw and Moscow.

The United States is doing its part to realize this ambition in several ways. For example, we have established the Baltic-American Enterprise Fund to promote the growth of small- and medium-sized businesses. We have also signed treaties on taxation with all three Baltic states as well as Poland. These treaties help foster trade and investment by removing significant tax barriers for U.S. firms doing business in the region. Also toward this end, we have signed Bilateral Investment Treaties with the same four countries. As ambassador to Sweden, I am pleased to note that my government's strong support for WTO accession by the three Baltic states has already begun to pay off, as Latvia will become a member soon. Indeed, American diplomats from Brussels to St. Petersburg met in Stockholm in September and agreed upon a proactive, American commercial strategy for the Baltic region.

But there's only so much outsiders can do. The Baltic states and Russia need to do more to create the stability and predictability that business investment requires. This includes putting in place a sound and transparent legal infrastructure in which laws are consistently and fairly applied. Border crossing and customs procedures need to be established, and corruption must be rooted out. The U.S. is already a leading investor in the Baltic states and Russia, but if these countries expect to attract more commitments -- such as the $300 million investment by the Williams Company in Lithuania's oil sector this year and Northern States Power in Estonia's energy industry -- the world needs to see continued progress on the legal infrastructure issue.

The creation of a Baltic Business Dialogue, which would bring together business leaders from the U.S., Russia, and the Baltic Rim countries to work out practical solutions to trade problems, would help integrate the region in the larger world economy. Cooperation among business leaders in the Baltic Sea region and with their counterparts in the U.S. is vital to this region's future prosperity.

The third and final objective we have in the Baltic region is to help Russia become an integrated member of the new Europe. As recent events have demonstrated, this will not be an easy task. It will take many further years of disciplined economic policies on the part of Russia as well as strong financial support from the West for this vision to become a reality. But we cannot forget that Russia plays a key role in determining the overall prosperity and stability of the Baltic Region. As U.S. Deputy Secretary of State Strobe Talbott has said, we want Russia to "think of the Baltic states as a gateway outward, not as an invasion route."

With flexible and creative thinking, there are concrete ways to make it happen. Let me give you an example. We all understand the value of communications and information sharing in promoting cooperation. Taking advantage of an already existing fiber optic cable between Warsaw and St. Petersburg, and by adding links to the Baltic states, the law enforcement authorities of these countries are now sharing data on crime and drug trafficking, and fighting one of the most serious threats to economic prosperity in Russia and the Baltics, namely sophisticated organized crime.

This region, in the words of the Economist magazine, is "the biggest, most complicated, and most promising piece of the new Europe." I have sketched out how the United States is working with its partners to realize the region's great promise. I have no doubt that we will succeed in making it the most prosperous and peaceful in Europe.

(End text)