By now, it’s clear that America is not buying Greenland from Denmark, despite headlines to the contrary. However, there’s a more realistic path forward to secure U.S. strategic interests in the vast Arctic region: negotiating a Compact of Free Association (COFA).
Here’s why this approach could benefit all parties involved and address their respective goals.
Understanding Greenland’s Unique Position
Contrary to common assumptions, Greenland is not merely a Danish province. It operates as an autonomous nation under the Danish Crown, managing its own parliament, taxation, and most domestic affairs. Denmark handles Greenland’s foreign policy and defense obligations but legally cannot sell the territory without Greenlanders' approval.
The Greenlandic people, mostly indigenous Inuit, have a strong cultural identity and aspiration for full independence rather than becoming part of another nation. As such, the idea of joining the U.S. has little local support.
What is a Compact of Free Association?
A COFA is a treaty arrangement that offers a mutually beneficial solution. The U.S. already has similar agreements with the Republic of Micronesia, Palau, and the Marshall Islands. These pacts provide:
Economic aid and access to U.S. government programs.
Tariff-free imports and the right for citizens to live and work in the U.S.
Defense provisions, allowing the U.S. to station troops, operate military forces, and control foreign military access in these nations.
Strategic Benefits for the U.S.
A COFA with Greenland would bolster American security interests by maintaining control over defense and foreign investment in this resource-rich region. As the Arctic ice recedes, new sea routes are opening, making the area increasingly strategic for global shipping.
China’s growing interest in Greenland—both for rare earth minerals and potential oil exploration—has already raised alarms in Washington and Copenhagen. A COFA would give the U.S. leverage to block foreign military and economic footholds while supporting Greenland’s economy and autonomy.
In Greenland’s and Denmark’s Interests
Greenland's push for independence faces financial hurdles. The country currently depends on an annual Danish subsidy of around $783 million (and rising with inflation). Denmark’s budget strains are compounded by new defense commitments in Greenland, recently estimated to require 12-15 billion Danish crowns for patrol ships and upgrades.
A U.S.-Greenland COFA could alleviate Denmark’s financial burden while giving Greenland access to the resources it needs to move toward greater self-sufficiency. This arrangement would help Denmark preserve its relationship with Greenland without direct control, satisfying both Greenlandic independence aspirations and Danish pride.
Challenges and Opportunities
Negotiations would not be simple. Greenland’s left-leaning government prefers a peaceful, low-tension Arctic and may resist extensive military arrangements. Additionally, Denmark might view the deal as losing part of its territory.
To smooth negotiations, the U.S. could offer Denmark incentives, such as:
Allowing Danish troops to maintain a visible role in Greenland’s defense.
Exploring trade benefits, like making anti-obesity drugs from Danish company Novo Nordisk eligible for U.S. federal healthcare reimbursements.
A Practical and Strategic Solution
While the notion of “buying Greenland” might have captured headlines, a COFA offers a viable, win-win scenario for all stakeholders. It secures U.S. interests, supports Greenland's independence ambitions, and relieves Denmark of a costly burden.
