Trade deficit between Sweden and US

Via Skype, US Secretary of Commerce Wilbur Ross participated in a lunch with the Swedish-American Chamber of Commerce in New York on Tuesday. The US is Sweden’s most important trade partner outside the EU, and Wilbur Ross says he is prepared to resume the paused TTIP negotiations.

Sweden’s Minister for Enterprise Mikael Damberg also participated in the lunch and will meet Wilbur Ross today, Thursday. He does not share Wilbur Ross’s views of TTIP but says, “even if we have different views, it is important for us in the government to develop a relationship with this American administration”.

Wilbur Ross points out the major trade deficit – last year Sweden sold SEK 87 billion worth of goods and services to the US but imported only SEK 37 billion worth – although says, “We share many of our values with Sweden and have huge respect for the technical knowledge in the country.”

Sweden heads for clash with EU

Chinese investment in the EU increased by 75 per cent in 2016 and amounted to EUR 35.1 billion, according to the Rhodium Group. Concerns that China could gain control of assets affecting national security have led heavyweight nations such as Germany, France and Italy to urge a rethink of foreign investments in the EU, and in a speech today, Wednesday, European Commission President Jean-Claude Juncker is expected to lay out plans for a more robust screening of trade.

The Swedish government is opposed to more thorough vetting of foreign investments, with EU Affairs and Trade Minister Ann Linde describing the move as “protectionist”. “I believe the opportunities the WTO agreement gives Sweden and other EU member states are adequate,” she says.

In contrast, Thomas Lagerqvist, chair of the Sweden-China Trade Council, welcomes a discussion on tighter screening, saying: “It is naïve of Sweden to believe there is no risk”.

Strengthening ties with Russia

Despite conflicting views on a number of issues, EU Affairs and Trade Minister Ann Linde recognises that both Sweden and Russia share an aim to work towards realising the huge potential in bilateral economic relations.

Writing in Dagens Industri , ahead of her visit to Russia on 12-13 September, the minister points to areas of cooperation between the two countries, including trade, organised crime, culture and student exchange, and underlines the fact that Sweden is the fifth largest direct investor in Russia, discounting tax havens. By way of example, one Swedish company has invested close to SEK 60 billion in Russia since 2001.

Trade between Russia and Sweden amounted to some SEK 48 billion in 2016 and there is potential for Swedish exports to grow. The Russian government’s aim is to invest in energy efficiency and environmental protection, and Linde looks forward to discussing ways to boost cooperation in these, and other, areas with her Russian counterpart.

China trip to pave the way for new deals

Prime Minister Stefan Löfven is to begin a three-day trip to China next week, including a meeting with Chinese Prime Minister Li Keqiang, accompanied by Enterprise Minister Mikael Damberg, Trade Minister Ann Linde and Environment Minister Karolina Skog, along with a business delegation that includes Ericsson, ABB, Astra Zeneca, Scania and Volvo Cars and Volvo Group.

Sweden’s exports to China amounted to SKr 46 billion in 2016. During the first quarter this year exports grew by 33%, compared to the same period last year.

Mikael Damberg says that China’s efforts to move forward on the global political arena in terms of trade and climate makes it easier to find a shared agenda.

Norway difficult trade partner

Last year Swedish companies sold goods to Norway worth SKr 124 billion and services worth SKr 91 billion, making it Sweden’s largest export country. However Anna Stellinger, director general of Sweden’s National Board of Trade says, “Companies expect it to be easy to trade with Norway, but it is difficult.”

The board was tasked by the government to survey businesses to see where the greatest trade difficulties occur. Among the third of companies that experiences problems with exports to a non-EU countries, almost all singled out Norway, followed by Russia, China, Brazil, the US and India. Bureaucratic times and difficult processes for customs are among the problems.

A third of companies believe it is important for Sweden to bring about better trade conditions with Norway. The Board of Trade believes that the survey indicates that the choice of countries in the export strategy ought to be narrower.

Ukraine attracting Swedes

Trade Minister for Ukraine Nataliya Mykolska is in Stockholm to attract Swedish companies to Ukraine. The selling points are low wages, speedy reforms and an EU agreement.

She says areas of priority are food, light industry, timber, furniture and IT. She also sees potential in tourism. She says the government has also worked hard to counter corruption, saying that more has been done in the past three years than in the preceding 25 years.

Political risk for multi-billion kronor deals

Five deals worth SKr 2.9 billion were struck with Iranian partners during the Swedish delegation’s visit to Iran at the weekend. Scania, led by CEO Henrik Henriksson, signed two new agreements for a total of 1,350 buses. Henriksson described their relationship with Iranian partner, Mammut, as a way of “spreading the Swedish model”.

However the political risks for those investing in the country are high. The business climate is nervous, not least because of Donald Trump and American sanctions.

Karsten Stroyberg, who is responsible for Danske Bank in the region, the only bank apart from SEB that helps Swedish companies in Iran, says, “It is very complicated and very limited… You cannot have any Americans in the company, you cannot have any American dollars or companies in the agreement.”

Linde concerned

On Thursday afternoon Mexican President Enrique Peña Nieto announced that he would not attend a meeting with US President Donald Trump. His move was a response to a planned border wall between the two countries, and the question of who would pay for it.

For every day that passes Professor Henrik Horn of the Research Institute of Industrial Economics (IFN) is more and more convinced that Donald Trump intends to realise his trade threats, and that there is a real risk of a trade war, reports Dagens Industri.

Trade Minister Ann Linde (S) is also concerned, saying trade patterns will “deteriorate” when the international rules for global trade are called into question.

However, the minister is keen that Sweden should have good relations with the US, pointing out that Swedish companies employ 330,000 people and is one of the largest investors per capita in the US.

Meanwhile, Anna Stellinger, director general of the National Board of Trade Sweden (Kommerskollegium), fears Donald Trump’s trade action could have direct and indirect impact on Swedish exports and companies.

“The US is our second most important export country in terms of services, and the third most important for exports of goods,” she says, emphasising that 140,000 jobs in Sweden are dependent on US exports.

Hands’ recipe to cope with Brexit

Even though the UK wishes to keep close ties with the EU, Brexit will force it to seek trade ties elsewhere, Greg Hands, the minister of state for international trade, tells Dagens Industri in an exclusive interview.

The minister acknowledges that the UK must increase its exports to China and India, but also points out that many of its key markets are in the EU. “We export more to Sweden, the Nordic region and the Baltic region that to China and India together,” he says.

Mr Hands met Ann Linde, the Swedish minister for EU affairs and trade, in Stockholm last Friday to discuss free trade, and tells the newspaper: “We had a very positive discussion on cooperation in various trade fora, including the WTO. We spoke of our common interest in free trade being on the world agenda.”

EU turns to other countries to defend free trade

Talking to Svenska Dagbladet, EU trade commissioner Cecilia Malmström discusses growing concerns over Donald Trump and protectionism. “But we can’t be paralysed by Trump,” she says, telling the newspaper that there is overwhelming consensus on the importance of safeguarding talks and negotiations ahead of the WTO’s ministerial conference in December.

With the EU-US trade deal, the TTIP, frozen for the time being, the EU is eyeing new trade opportunities, particularly in Asia. “Countries are waiting in line already. They call and wonder if we can speed things up now that the US is no longer interested. We have Mexico, Japan and Mercosur wanting bilateral and multilateral agreements with the EU. Our popularity has actually increased, which is positive,” she says.