Historical rivalry between the United States and the Soviet Union
The United States has been consistently opposed to Russia's legal stance on the NSR and has refused to ratify UNCLOS. In terms of the impact of Arctic issues on relations between the two countries, the NSR is one of the biggest bones of contention. Both sides are adamant in their positions, which are diametrically opposed. Russia has declared the waters of the straits between its shores to be internal waters, whereas the United States asserts its right of passage through what it regards as straits in international waters. Each country defends its position in terms of national security interests. In its defense Russia can marshal a number of arguments. The Vilkitskiy, Shokalskiy, Dmitry Laptev, Sannikov, Eteriken, Yugorskiy Shar, Kara Gate and Red Army Straits are all less than 12NM wide, arguing strongly for their status as territorial waters. Moreover, historically little maritime traffic other than Russia's own has ever passed through the NSR. In cases where straits abut the territorial waters of another country, or provide the only means of maritime entrance to the waters of another country, some straits have been designated international waters, but neither of these conditions applies to the straits in the NSR. The United States' grounds for supporting its assertion of right of passage is weak, and most third parties appear to support the Russian position. As stated above, the United States also opposes CASPPR, Canada's Arctic environmental regulations. This stance is consistent with the American refusal to ratify UNCLOS.
4.3.7 Conclusion
In the foregoing discussion of procedures required for navigation of the NSR and the legal background to those requirements, we have found much that is inconvenient and unsatisfactory to civilians and companies intending to ply these waters. The demand for four months' advance notice of NSR navigation is hard to coordinate with the contracts of tramp operations, which are often chartered for much shorter periods of time. Both recent and current data on ice conditions, which are crucial in proposing routes and estimating travel times, are not made available free of charge. Persons who must have data and forecasts on ice conditions vital for navigation can only obtain them by paying a fee to AARI or other governmental organizations. When the time and effort of concluding contracts and so forth is considered, NSR shipping remains a distant prospect for today's shipping market, which requires fast decision-making. On a cost-benefit basis, NSR shipping is at present hard to justify. As is described in Section 4.4, transit fees, or tariff structures for the NSR are by no means acceptable in comparison to the route via the Suez Canal, and even after the fee is paid there is no guarantee that the NSR will provide speedy and fully safe passage. It is our hope that Russia will begin to provide clear guarantee of the services it provides in exchange for its transit fees. At present, the opening of the NSR is only at the phase of laying the appropriate legal groundwork, since physical preparations are so poor. The advanced state of dilapidation of the NSR infrastructure put into place over many years is now becoming apparent. If this infrastructure crumbles completely, it will have to be rebuilt at great expense. Revamping the navigational and legal system of the NSR to provide acceptable convenience to the international shipping market, partly through the demonstrative effect of test voyages, is an urgent priority.
4.4 Evaluation of Economic Viability
In this section we weigh the business case for the NSR. Drawing on publicly available documents, this section touches on changes to shipping volume from the past to the present, as well as seasonal variations of shipping, types of cargo and issues of profitability in light of Russia's state of economic upheaval. Going forward, this section also looks at a hypothetical scenario for stimulating development of the NSR, in which the transit cargo between the Far East and Europe through the NSR is greatly increased, examining which types of cargo can be shifted to NSR transit shipment.
