Tal
Kommerskollegium - Handelns Dag 7 mars 2007
Sten Tolgfors, Handelsminister

Inledningstal av handelsminister Sten Tolgfors vid minimässa på Handelns Dag

Talet hölls på engelska

DET TALADE ORDET GÄLLER

Ladies and Gentlemen,

The mini-fair gives you the opportunity of meeting a number of the authorities and organisations that help Swedish companies to participate actively in international trade and the globalised economy.

Swedish prosperity is built on international trade and the ability of our companies to compete in global markets. Exports and imports correspond to about 90 per cent of our GDP.

The EU market accounts for the largest share. As an EU member, Sweden belongs to the largest and most important economic area in the world, with 550 million consumers and 20 million companies. The trading rules of the internal market are being improved constantly, as is compliance with these rules in member countries.

Sweden's other major trading partners include the United States, China, Russia and Japan. Maintaining and even increasing our share of the world market is a must and a challenge for our business leaders and the Government. Free trade and open world markets will serve us and the world economy best. And a competitive home market is the best key to successful marketing abroad.

I believe that our SMEs in particular could make better use of the many opportunities that globalisation will bring in the coming years. Globalisation is not something that has already happened, and is now over and done with. Instead, it is a process that is only just starting and whose features are changing constantly.

Globalisation is deepening due to the potential for increased productivity offered by global production chains. There is also the accelerated diffusion of technology achieved by falling communications costs and innovative forms of business organisation. In almost every growing economy, the importance of trade will rise. The growth in the trade ratio over the next 25 years will be powered by a new dynamic in trade in services. Global trade in goods and services is likely to rise more than threefold.

More important, we are only starting to see a new, deepening wave of globalisation due to the rapidly growing economic weight of the BRIC countries - Brazil, Russia, India and China - in the international economy. This goes for both trade and foreign direct investment.

According to UNDP, trade barriers in industrialised countries cost developing countries between USD 100 and 150 billion per year, which is about twice as much as total global development assistance. This situation requires multilateral solutions in order to open markets.
The "Doha Round" has been under way for more than six years. A necessary condition for progress in the negotiations is that the United States indicates a readiness to further reduce its agricultural subsidies. In addition, the EU must make further cuts in its agricultural tariffs and large developing countries such as India, Brazil and China must be willing to reduce their tariffs on industrial products.

Much remains to be done. But the fact is, never before has so much been on the table in the agricultural area as there is now. It would be a tremendous waste if these forward steps in the negotiations were to come to nothing.
There is optimism, and a new energy. Leaders from the United States, the EU and Brazil have emphasized the need for progress and success. I met USTR Susan Schwab the other day, as well as congressmen from both parties in Congress. We had Commissioner Mandelson in Sweden a couple of weeks ago. We regularly talk to large EU countries like France and the UK, as well as northern liberals. Optimism now needs to be transformed into success. The more each of us gives, the more we will gain collectively.

However, time is beginning to run short. The US President's mandate from Congress to negotiate a trade agreement, the TPA, runs out this summer. If there's no breakthrough before then, there's a risk that the whole round will fail or else be delayed several years. I expect it could be restarted in 2009 or 2010, at the earliest. This would be devastating for the WTO and the multilateral system and for the world economy as a whole. Small and poor countries that have no real alternative to the WTO are the ones that would be hit hardest.

I don't want to see the world divided into separate trading blocks, depending on bilateral FTAs. FTAs are good if added on top of a Doha deal. They can be broader and go further, but should not be allowed to impact on the WTO.
Greater market access is vital for developing countries. They need support to be able to take advantage of the new opportunities. That is precisely what the Aid for Trade process is all about. Sweden has been one of the countries pressing to strengthen trade-related assistance. All WTO members now support Aid for Trade and a large number of countries have promised to increase their contributions considerably. This year the Government is increasing the Swedish effort by a third, and we have made trade and development one of our priorities for development cooperation.

The Government stresses cooperation with the Swedish business sector. A number of Swedish companies have the potential to offer solutions that promote development and have come a long way in environmental thinking, social consideration and non-corrupt business practices. We need to match the needs, priorities and conditions of the developing countries with the skills and experience of the Swedish resource base.

Trade and industrialisation have always been closely linked. Sweden has long experience of international trade. Companies such as Alfa Laval, Ericsson and SKF made good use of the opportunities in foreign countries by establishing companies for trade and manufacturing, and they have competed successfully worldwide for a long time. Many others have followed - Volvo, Saab, Electrolux to name a few. Later on IKEA and H&M became success stories at home and abroad.

A study by the Swedish National Board of Trade shows that, as a small, trade-dependent economy, Sweden stands to gain considerably more from a successful Doha Round than the average industrialised country. The prediction is an annual increase in national income for Sweden of SEK 5.2-12.3 billion, if negotiations succeed. Here we're talking about SEK 2500-3000 per Swedish household. And this is not taking into account dynamic effects.

The foundation for Swedish trade policy is a good business climate, especially for SMEs. The purpose of trade promotion is to give the extra push and support that may be needed to assist the internationalisation of our SMEs. Focusing on Swedish interests abroad and the image of Sweden as an open, innovative and attractive country is therefore a priority.

We also need increased access for our companies to the global market. The EU's internal market has been our home market for more than 10 years. Yet we need to make that fact better known here in Sweden. We share external trade policy with the other member states. We promote the free trade side of the debate within the Union.

Over the years the Government has financed many different trade promotion activities. In order to ensure that it is done effectively, I have initiated a review of the trade promotion system. It will focus on how the outcome of the promotion activities matches the expectations of the Government, as well as the needs of our SMEs. We also want to consider what synergies closer cooperation between the Trade Council and the Invest in Sweden Agency could generate abroad.

The benefits to Swedish industry as well as other economies from a successful deal in the DDA are extensive. Trade barriers will only harm world economy. We want to combine openness to trade with an agenda to strengthen our economic competitiveness.

We can't compete with low wages. We must compete with the quality of our goods and services. We must move up to higher value-added production when the BRIC economies compete with low-cost production. We have to compete with a well-educated labour force, resources for research and development, well-organised production, leadership and communication. We also have to show political leadership and point out the positive sides of globalisation.

With these words let me welcome you all to the mini-fair!