Tal
Konkuk-universitetet i Seoul, Sydkorea 12 juni 2007
Sten Tolgfors, Handelsminister

"Sweden and Korea - how can we cooperate and learn from each other"

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Dear President Oh Myong,
Dear members of the faculty,
Dear students and friends of Sweden,

It is a great pleasure to have the opportunity to address you here today. I have chosen the topic "Sweden and Korea - how can we cooperate and learn from each other" since that's the purpose of my visit to Korea.

This is not a new perspective for me. For many years, prior to becoming Minister for Trade, I was a member and also the leader of the Swedish-South Korean friendship group in the Swedish Parliament. I have regularly met with the Republic of Koreas ambassadors to Sweden, as well as with the South Korean community in Sweden.

Let me already in the beginning of my speech state that ties in between Sweden and South Korea are very strong, and in my view also unique. I'm going to come back on the several things that ties us together.

But first, Sweden and South Korea are two advanced countries, both members of the OECD and important players within the UN system, but with different historical backgrounds.

Sweden is a member of the European Union and participates in various European cooperation projects. Sweden strives to be of service to the international community, using our experience as a country that has managed to stay out of wars for two almost centuries.

The Republic of Korea is an important actor in the international community, both economically and politically, but has suffered the unfortunate fate of a brutal occupation and several wars during the last two centuries. Korea is still the victim of a sad separation of its nation. Part of the Korean people suffer greatly from authoritarian rulers, although some hopeful signs perhaps have emerged during the last few months.

I consider myself a great friend of the entire Korean people, but only of one political system, the South Korean democracy.

When North Korean forces attacked the south in 1950 the world had just been divided by the Cold war. However, the majority of the UN members immediately realized that this was a threat to world peace. A threat that had to be met by unity and a resolute counter reaction. Sweden did not participate in the fighting that followed. Instead, we helped by sending a field hospital to Pusan to assist in the treatment of wounded. Thanks to common efforts, the UN members managed to avoid a complete occupation of the Korean peninsula by the communist forces, but ever since the peninsula has unfortunately been divided.

The situation in the divided Korea clearly shows how societies develop in different directions depending on their political and economical systems. The Republic of Korea is a member of the OECD and one of the richest countries in the world. Its industries are active on the world market and compete successfully with the rest of the world. The Republic of Korea is also a solid democracy, and a model for democratization in Asia.

In the DPRK, on the other hand, people are living under one of the world's most repressive regimes and the economy is in shambles. North Korea is one of the poorest countries in the world, in spite of all their natural resources and opportunities to develop a healthy industry.

I know that many South Koreans care deeply for family members in DPRK, and for the entire north Korean population. Many are deeply saddened by the living conditions there, as are people all over the world. All Koreans should be able to enjoy democratic and human rights, and good living conditions.

It is so obvious that democracy and market economy constitutes the foundation for healthy societies and prosperous economic development. Dictatorship and government control of all aspects of the economy and society leads to the very opposite. No society is perfect, and probably never will be, but without human rights, freedom of speech, free markets, respect for the rule of law and the fostering of creative and fearless individuals failure is a given result.

Sweden's interest in Korea is long term. Let me give a historical perspective.

Our interest did not start with the field hospital in Pusan. Journalists, archaeologists, philologists and anthropologists were here more than a century ago. Many books and articles describing the warmth and traditions of the Korean people were published and read by curious readers in Sweden already some one hundred years ago. In 1926 our then Crown Prince and later King Gustavous Adolfus, who was an ardent archaeologist, participated in an excavation in Kyongju and managed to find an important gold crown, which is now on display in the historical museum there.

Since 1953 Sweden has participated in the Neutral Nations Supervisory Commission and numerous Swedish officers have served in Panmunjom ever since the armistice agreement. This means that more than one thousand of Swedish officers have spent a long time in Korea, their stories being told to children and even grand children. We have willingly accepted the responsibility of taking part in Panmunjom.

During the last decades some ten thousand Korean children have found new parents in Sweden. I am aware that international adoption is a sensitive issue in South Korea, and I truly respect that, but in my perspective this is something that brings our two countries close together.

My best friend is Korean born, and takes great interest in everything that happens here. These Korean born children are now growing up, starting their own families, and they rightfully ask me to do all that I can to promote good cooperation with South Korea. And I will.

Naturally, those who have come to Sweden by adoption spend a lot of time thinking about the place and circumstances they came from, and what life is like in their old home land. These are important thoughts and questions, and the search for answers bring our two countries closer together.

The Swedish society has benefited greatly from the children, now often grown up Swedish citizens, who were born here. We should be very open to the possibility that they can vitalize our bilateral relations. Many of them are returning to Korea to get to know the country, it's culture and traditions. Many come here regularly. I welcome that.

* * *

Now let me look to the future.

Already, our industries are cooperating in creative and positive ways. There are more than seventy Swedish companies in the Republic of Korea and all the big Korean brands are familiar to us in Sweden.

Korea is Sweden's third trading partner in Asia - after Japan and China and our fourth export market after Japan, China and India. There is always scope for increased trade flows in between our countries, given the complementary nature of our industries.

Swedish and Korean companies sometimes compete with the same kind of products, but more often they complement each other, and export components and raw material to their respective production facilities. Korean shipyards are producing vessels for the Swedish company Wallenius, one of the largest car carrying companies in the world, and the Swedish company Hägglunds is producing important components for the Korean vehicle company KIA, just to mention two obvious examples of good cooperation in the industrial field.

Korean car producers such as Hyundai are day by day increasing their market shares in Sweden and two Swedish companies, Volvo Trucks and Scania, have a strong position on the Korean market for heavy trucks. Both Sweden and Korea have strong ICT industries, with brands such as Ericsson and LG, and Samsung. In the medical field our cooperation is increasing, and a number of Korean dentists have spent a lot of time doing research together with Swedish specialists.

The presence of Swedish business in Korea will continue to grow, and so will the economic integration in between our two economies. Sweden can serve as a bridge for Korean companies to the northern European market and the Baltic see region, and is becoming an increasingly interesting arena for investments from Korea.
Koreas determination to become one of the world's leading nations in science and technology creates new possibilities for interaction and cooperation. Much attention now a days is devoted to the developments in China and India. But Korea is Asia's leader in establishing new top-class research and developments (R&D) centres. Today I visited Hyundai-Kia R&D Center and it's easy to tell how innovative research and development is the back bone of these competitive industries.

Koreas investment in R&D equalled 3 per cent of GDP in 2005 - it is now at the same level as the US and higher than Germany's. Only Sweden - and Finland and Japan - show higher figures. Four per cent of our GDP is used for research and development - the highest share of any OECD country.

Sweden is considered one of the most innovative nations in the world (according to UNESCO Science Report 2005 and UNCTAD World Investment Report 2005), internationally renowned in areas such as life science, information technology, environmental technology, telecom, automotive and design.

Many well-known innovations and discoveries, both modern and historical, have Swedish origin. The ideas of inventors have laid the foundation for industries and corporations, which in turn have played an important role when Sweden more than 100 years ago entered the road to prosperity. Alfred Nobel, founder of the Nobel Prize, was one of Sweden's greatest inventors and industrialists. The Nobel Prize has been awarded since 1901 for outstanding achievements.

Research co-operation between Sweden and Korea is growing. But it is still at a modest level by international comparison. Therefore, I am very pleased that Konguk University and Chalmers University of Technology as well as Södertörn University College in Sweden have agreed to increase their exchange of researchers and students in the coming years.

* * *

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 Swedish GDP.

We are basically free traders. We are open to both export of our own products as well as to import from other countries, to the benefit of consumers and companies with global supply lines.

Sweden is facing globalisation with strong self-confidence due to strong economic growth, increasing export and import and strong creation of jobs. Sweden ranked as the third most competitive nation in the world according to World Economic Forum Growth Competitiveness Index 2005.

Sweden and Korea have both taken advantage of the globalization. Korean Industrial groups - like Samsung, Hyundai, LG, Daewoo - operate globally and have established a strong position in Europe. Globalization can only be met by enhanced competitiveness at home, and openness to others, not by isolation and inward looking protectionism.

It is primarily through the WTO that we can ensure open trade and a rules based trading system. We will need a strong multilateral trading system in the future, probably even more than today.

An ambitious result in the WTO Doha Development Round is my Government's top priority.

All countries in the world - developed and developing - need a framework that will provide stability and predictability for world trade. This could only be accomplished by a new multilateral trade agreement.

This is my assessment: The Doha Round is now at a crucial stage and we all need to show further flexibility in order to secure a successful outcome. There is a good chanced that we can achieve a breakthrough in the negotiations early this summer, see a renewal of President Bush's TPA-mandate early this fall, and then hopefully conclude the Round by the beginning of next year.

However, there is a risk that too many actors are focussing on the difficulties. This could become a self-fulfilling prophecy, as political pressure is lifted off. On the other hand, the closer we get to a deal, the more obvious the benefits will become, and the harder it will become to resist it.

Even though agriculture is a hard nut to crack and it dominates the debate, it only represents 7 per cent of world trade. The negotiations on industrial goods and services are of far greater importance for many countries - this is particularly true for Sweden and South Korea.

A recent study show that 65 per cent of Swedish gains from a successful Doha round will come from liberalisation of trade in industrial goods. Trade facilitation and services are other important areas.

What's on the table is worth roughly USD 117 billion per year in welfare gains globally. We're talking about USD 400 per Swedish household. And this is not taking into account dynamic effects of increasing trade and investments. The biggest winners will be the developing nations.

A failed Doha Round would come at a high price for the multilateral system. Companies work with global supply lines, and need trade agreements which takes this into account.

* * *

The ongoing negotiations for a Free Trade Agreement between EU and Korea is an important complement to the WTO negotiations. By focusing on areas currently outside the WTO such as rules such as investment, trade in certain services and the removal of non-tariff barriers, the agreement will complement the multilateral system well. The agreement is competitiveness-driven: comprehensive and ambitious in coverage, aiming at the highest possible degree of trade liberalisation including far-reaching liberalisation of services and investment

A successful result will give significant economic benefits for both parties. The biggest gains for the EU would include business services to Korea. Export from the EU is expected to increase 50% by this agreement. For Korea the agreement would have a major impact and estimations expects the exports to the EU rise by 36 pre cent.

* * *

To sum up. Swedish and South Korean relations are excellent. We are closely tied together by events and cooperation in our history. I believe that we also share opportunities in the future.

When everyone seems to focus on the present Tiger economies of Asia, we should keep in mind the very impressive development of the Republic of Korea. Nothing short of remarkable. High economic growth has been combined with democracy, which makes Korea a role model for development of other countries in Asia.

I congratulate you on the election of one of Korea's most able diplomats as the United Nations new Secretary-General. This makes Sweden and Korea two of the very few countries that have had the privileged of seeing one of our top diplomats in this important position. Mr. Ban Ki-Moon is the eighth Secretary-General, the Swedish diplomat Dag Hammarskjöld was the second.

Interestingly, Mr. Hammarskjöld's reputation as an effective UN chief was given a great boost by his engagement in Korean issues, not least by his mediation aimed at getting American airmen released from captivity in China. Mr. Ban Ki-Moon is faced with the same difficult task of bringing peace to the Korean peninsula, and it is my sincere wish that he shall succeed in making this possible.