Finland’s Trade Policy Programme is a Government Resolution concerning the policies that lay down the guidelines for the country’s trade policy in the next couple of years.
This is the first overall presentation of the impacts of Finland's EU membership on the trade policy environment and the content of trade policy. The Programme therefore seeks to provide a detailed analysis of the tasks and key objectives of trade policy in the new global economy.
The world economy is for the first time becoming truly global. The OECD countries still dominate the world economy but East Asian developing countries, in particular, are gaining an expanding share of production, trade and investment. The Russian economy is also growing, but it is still dependent on oil and gas production. The poorest developing countries, especially in Africa, have not managed to keep pace with the emerging developing countries, and their share of the world economy has further declined.
The pursuit of economic growth, global competition, specialisation, and business activities based on the dispersal of the value chain are likely to further increase international trade and investment.
The dismantling of barriers to trade and investment will continue.
However, especially in case the multilateral trade negotiations fail, it is possible such regional and bilateral arrangements are concluded as will restrict access to and operations on markets and which in this sense will erode the international trading system. Fears and concern provoked by changes in the world economy have started to transform into growing protectionist pressures. The intensifying efforts to develop multilateral rules reveal that there is a need for improved global governance.
Internationalising companies will be less and less dependent on their original home States and on individual States in general. The mobility of companies has prompted States and regions to engage in competition on the location of the most favourable operating business environments. From the point of view of governments and nations, questions such as where companies pay their taxes, where profits are repatriated, where investments are made and where people are employed are still relevant.
Membership in the EU has changed the operating environment of Finland's trade policy, and the EU’s negotiating power has significantly strengthened Finland’s trade policy position.
Effective participation in the EU’s common commercial policy requires mastering its broad agenda and success in ensuring that our national objectives are incorporated in the EU’s objectives. It is therefore necessary to allocate sufficient resources for the work and to develop more proactive working methods. Instead of border protection measures, trade policy focuses more and more on national regulatory systems. Therefore, ideological and value-based choices, which have traditionally fallen within the framework of other policy sectors, play a more prominent role in trade policy than earlier.
There are more and more actors in society willing to influence trade policy, and trade policy is criticised more than before. Active political and civil society discussion on trade policy is therefore welcome.
Trade policy plays an increasingly important role in protecting Finnish labour, livelihoods and welfare. Trade policy measures strengthen the competitive capacity of the Finnish economy by influencing the operating environment of business and trade outside the national borders and by ensuring a smooth flow of imports. Finland’s general trade policy line has always emphasized the importance of dismantling barriers to trade and investment and participation in an open world economy. It is important that the EU continue to pursue trade policy that is in line with Finland’s policy, aiming at the dismantling of barriers to trade and investment and the reinforcement of common rules for international trade.
Measures carried out in different policy sectors to the benefit of developing countries must be mutually compatible and reinforcing.
Trade policy decisions concerning developing countries are very significant in this context. The less developed developing countries need more effective special and differential treatment than before in the context of trade policy. It must depend on their level of development and aim at their integration into international trade and the trading system, avoiding the introduction of separate rights and obligations on a permanent basis. The trading capacity of the poorest developing countries must be supported. The more advanced developing countries should remove trade barriers more systematically than before and also take part in granting special treatment to the poorest countries.
Finland’s economic success requires the further removal of barriers to export and investment and an open import policy that promotes competition. The key challenges include customs duties and non-tariff barriers to trade and trade-distorting measures that are still prevalent in many markets.
However, the trade policy agenda is subject to constant revision due, for instance, to changes in the structure of the world economy. Amidst these changes, it is important to ensure the viability of agriculture and to take care of the foundations of the welfare state.
The continued existence, expansion and reinforcement of the multilateral rules-based trade policy system, embodied in the WTO, is of utmost importance for Finland. However, in order to safeguard its interests, the EU has to further deepen its bilateral trade relations especially with its principal trading partners. At the latest when the results of the current WTO round of trade negotiations are available, the EU will have to assess whether it should participate in new free trade arrangements in order to protect European competitiveness.
