Tal
New York 26 februari 2007
Sten Tolgfors, Handelsminister

Anförande på svensk-amerikanska handelskammaren i New York

Ladies and gentlemen,

First of all, I would like to say how proud I am to join the distinguished list of luncheon speakers here at the Swedish-American Chamber of Commerce. For over 100 years the Swedish-American Chamber of Commerce here in New York has been an important player in promoting Swedish business in the US. It is an honour for me to visit with you today and to give the first speech of my visit to the United States here.

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I am a friend of the market economy and private ownership; I dislike market distortions. I believe that the natural comparative advantage should be allowed to allocate resources in the most effective way. This is why declare myself a freetrader.

I am also a multilateralist and a friend of the US. I firmly believe in a strong transatlantic link, in the necessity of strong ties between the European Union and the United States, in our common values of democracy and a free economy. It is clear to me that we need to work together to promote economic growth and competitiveness on a global level.

When we won the election in Sweden last September, we declared our wish to focus more on our relationship with the US and the strengthening of the transatlantic link - both bilaterally and through our membership of the European Union.

Why is this so important? The first reason is quite simple. We are historically connected. In 1638, Sweden established the colony New Sweden in what is now Delaware. I went to high school quite near that area, just outside Atlantic City. And I still have friends there.

I am just one of many examples of the close ties due to extensive travel and cultural exchanges between our two countries. And this is not forgetting the 10 million Americans of Swedish descent.

Secondly, we have strong commercial ties. The US is one of Sweden's top-two export markets. Swedish exports to the US are greater than our total exports to Asia and the Middle East combined.

Another example is the 200 000 Americans that work in Swedish-owned companies. (Volvo, Ericson, IKEA and fast growing service companies such as Securitas.)

Between 1995 and 2005 Swedish exports of goods to the US increased in volume by 9.5 percent on average each year.
In the first three quarters of 2006 the US was the tenth largest supplier of goods to Sweden. That is 25 percent more than China and 61 percent more than Japan.

Since 1997 the US has held the largest aggregated amount of Swedish FDI (foreign direct investments). FDI totalled 37.3 billion US dollars( 266 billion SEK) in 2001. Larger than the investments in any other country.

Thirdly, the EU and the US represent the world's two largest trading blocs. Our combined economies generate a total of 57 percent of world GDP, accounting for more than 40 percent of world trade.

Fourthly, stronger cooperation with the United States is crucial when we are dealing with today's global challenges. Shared values and interests and the way the US and the European Union cooperate are important for the development of freedom and prosperity globally.

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Free trade is a cornerstone of Swedish foreign and business policy, as well as our domestic economic policy. Swedish prosperity is built on international trade and the ability of our companies to compete in markets all over the world. Our economy is small and open. Exports and imports combined correspond to about 90 percent of GDP.

We chose the path of free trade and an open economy. And I believe international trade is the most efficient tool to achieve our common goals of freedom and prosperity and to respond to the challenges of globalisation.

We need to take on the challenges of globalisation by increasing our own competitiveness. Building barriers will only reduce our competitiveness in the long run. To deal with the anxieties caused by the sometimes negative effects of globalisation, for instance production moving abroad, we need to do a number of things. We can't compete with low wages. We must compete with quality of goods and services. We must move up in added value in our production when BRIC-economies compete with low cost production. We can compete with a well educated labour force, resources for research and development, well organized production, leadership and communication.

The Swedish Government shares a vision together with the US to promote a world of more open societies, more open economies and more open trade, but I feel we both can and should do more. I will continue to make the argument for freer trade and more competition as often as I can.

An important task for any government is to help create favourable conditions for business both at home and abroad - not least for small and medium-sized enterprises. However, barriers still exist between us. Today it is not primarily tariffs that constitute these barriers, but non-tariff barriers, especially in the regulatory field. Barriers that, in my view, border on protectionism.

The Transatlantic Economic Initiative was launched at the EU-US Summit in 2005 with the aim of removing some of the remaining barriers in the transatlantic market.
Sweden strongly welcomes the initiative of the German EU presidency to focus on these issues. Reforms are needed, especially from the perspective of growing international competition and the costs incurred by companies because of red-tape. Regulatory cooperation is a key area where our companies have much to gain.

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My visit to the US this week is primarily because of the negotiations in the Doha Development Round in the World Trade Organisation (the WTO). Successful completion of the Doha Round is in my view the most critical question for the world economy right now.

If we fail now, the costs may be very high. A recent study by the Swedish National Board of Trade suggest that we stand to gain 117 billion USD/year on a global level. Not only will we sustain welfare losses from a failed Doha-round, but the multilateral trading system will loose credibility. And a resumption of negotiations will realistically not start again until after the next American presidential election, somewhere in 2009 or even 2010, depending on how long it takes for a new administration to be put into place and to get a TPA (trade promotion authority).

Fortunately we have a small window of opportunity for a breakthrough in the negotiations this spring. The EU has shown that we have the political will to secure a deal. Given what is already on the table, the Doha-round would be the biggest liberalisation of global trade in history. It involves deeply restructuring farm support in the developed world and opening markets in agriculture, manufacturing and services. This is important in the developing world, where tariffs and barriers to trade and investment are highest. The industrialized countries have a lot to gain from the Doha round. But developing countries have even more to gain from freer trade and market access. The Doha Round is also an opportunity to integrate growing economies like China and Brazil into the multilateral system.

Now is the time for all WTO members to show courage and determination and complete the Doha round. Much is at stake and everyone has to give up something in order for all the pieces of the puzzle to fall into place. This is what I have been bringing up in my talks with all the key players in international trade negotiations in the past three months. I have stressed this in my meetings with the WTO director general Pascal Lamy, with EU Commissioner Peter Mandelson, and the French Minister for trade Mme Lagarde, among others..

And this is what I will say when I meet with USTR, Susan Schwab and members of Congress later this week.

We must show that we are committed to free trade and open markets so that we, and more importantly developing countries, can enjoy the kind of development that we once did when our societies went through industrialization. Only openness and a wariness of all kinds of protectionism - blatant or not - can secure freedom and prosperity.

This is why we, Sweden and the US, share the responsibility of explaining and pointing out the importance of transatlantic cooperation. And that we are committed to multilateral solutions.

Agriculture cannot be allowed to be a deal breaker. The agricultural sector only represents 7 percent of world trade. If the developed world opens its markets to agricultural goods it will have an enormous impact on the economies of the developing world because it is in this sector that they have a comparative advantage. Further, we need to put emphasis on interests such as industrial goods and market access, which is where mature economies have the most to gain.

It is my belief that we all share the responsibility to defend free markets and the multilateral trading system every day. Free trade cannot be taken for granted. That is why the business community must also do its part. As leading business people, all of you here today can help towards this end, for instance by talking to your representatives in Congress Who better than entrepreneurs and businessmen and women to show politicians what is at stake.

But the window of opportunity is rapidly closing with the President's Trade Promotion Authority expiring in June. We need a breakthrough this spring.

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- In conclusion, I would like to express my thanks to the Swedish American Chamber of Commerce New York for inviting me here. And let me express how pleased I am to see how well the cooperation works between the Chamber, the Swedish Consulate and other key players in promoting Sweden in New York. We need this kind of cooperation to promote Swedish entrepreneurs, Swedish products and expanding business sectors.

I am ready to be of assistance, and wish to hear from you on how I can help promote and bring our two fantastic countries together.

I thank you for this opportunity to speak to you and for listening!