Free trade fears cloud Sweden's embrace of Obama

Amid the excitement in Sweden over Barack Obama’s victory, there remains real concern among members of the political and business establishment over how the US president-elect will approach the issue of free trade.

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“Our hope is that he doesn’t follow through on what he’s said about free trade,” Moderate party secretary Per Schlingmann told The Local.

In the course of his campaign, Obama made a number of statements which raise questions about his support for free trade.

“If we continue to let our trade policy be dictated by special interests, then American workers will continue to be undermined,” he told an audience at a campaign rally in Michigan in June.

“Allowing subsidized and unfairly traded products to flood our markets is not free trade.”

Among other things, Obama also called for trade agreements with tougher labour and environmental protections, as well as a renegotiation of the North American Free Trade Agreement (NAFTA) linking the US with Mexico and Canada, the benefits of which he said had been “oversold” to the American public.

Obama’s positions worry free trade advocates who fear the president-elect’s less than enthusiastic support of free trade may portend a more protectionist attitude on the part of the United States.

“I hope that [Obama] doesn't follow through on his statements about free trade. I can't say for sure what will happen, but I hope his policies are wiser than his past comments,” said Erik Ullenhag, party secretary for the Liberal Party (Folkpartiet).

Swedish exports the equivalent of about 50 percent of its GDP annually, whereas the US exports goods and services equivalent to about 8 percent of GDP.

As a result of Sweden's much greater reliance on external trade, free trade receives much wider support among most of the country’s major political parties.

Leif Pagrotzky, a Social Democratic trade minister in the government of Göran Persson, admitted that “there was something to” the concerns people had about Obama’s trade stance, but added that free trade has also suffered during the administration of President Bush.

“The Bush administration has put a black eye on free trade. Things have taken a large step backwards,” he said.

“I'm not worried [about Obama’s free trade views] because things can't get much worse, and I'm hopeful they can get better.”

Speaking Wednesday morning to an audience attending an election watch breakfast sponsored by the American Chamber of Commerce, Börje Ekholm, the CEO of Sweden’s influential Investor holding company, also cautioned against reading too much into Obama’s past comments regarding free trade.

“I think it’s important that we don’t exaggerate the anti-trade stance of Obama. I think he’s smart enough not to upset the free trade patterns of the world economy,” he said.

“What’s important is having a president with clear and strong leadership,” he added.

As Sweden and the United States, along with the rest of the world, struggle to cope with the fallout from the current financial crisis and the onset of a recession, others emphasized the importance of openness to helping revive the global economy.

“The world, and especially Sweden needs more openness and more free trade,” said Henrik von Sydow, a Moderate member of the Riksdag.

Current minister of agriculture and member of the Centre Party Eskil Erlandsson agreed.

“It’s important to open up so our societies can come together, and not to close things off. I hope that president [Obama] will open things up because we need to the US to help our economy get going again,” he said.

While also expressing his hope that the Obama administration will be able to distance itself from the president elect’s past comments on free trade, Mauro Gozzo, chief economist with the Swedish Trade Council (Exportrådet) didn’t see reason for grave concern, explaining that any movement on trade policy won’t likely happen anytime soon.

“I don’t expect much to happen in the early years. I’m not optimistic, but I’m not pessimistic either,” he said.