‘We need to defend the transatlantic economic link’

Less openness to foreign trade risks making both the US and countries such as Sweden poorer, argue Maria Rankka and Andreas Hatzigeorgiou of the Stockholm Chamber of Commerce.

'We need to defend the transatlantic economic link'
Why the US election matters to Sweden. Photo: Joe Raedle/AP

In an international economic context, the 2016 US presidential election is one of the most significant for decades. The fact that trade policy is one of the biggest issues in the election campaign means that there is a lot at stake in the election for other countries, not least the EU and Sweden. What is unique about this year’s presidential election is that it is between two candidates who take a skeptical view of free trade, albeit to varying degrees.

The US presidential election will have reverberations far beyond the country’s borders. The US is an economic superpower, whose impact on the global economy is substantial. The country is the world’s second-largest economy and a global leader in innovation and research.

Europe and Sweden are especially dependent on the transatlantic economy. The US is the EU’s biggest export market and Sweden’s largest export market outside Europe. But the US is also dependent on the EU and Sweden for growth and employment.

Sweden is the US’s largest foreign direct investor per capita, and some 1,200 businesses with links to Sweden are active in the country. Sweden’s foreign trade with the US supports over 330,000 US jobs. Undoubtedly, less openness to foreign trade and investment would risk making the US and countries like Sweden poorer.

Trade and trade policy has become a hot political topic. Country after country have seen the trade between countries, regions, businesses and people become more ideologically loaded. This has been evident in Europe, in countries such as the UK, where trade policy was high on the agenda during the UK’s EU membership referendum. It is also patently clear in the US, where more than one in two voters regard trade policy as “very important” for their votes.

Donald Trump is highly critical of the trade policy pursued by previous administrations, Democratic and Republican. His view is that their policies resulted in jobs and businesses moving overseas.

His has proposed that the current free trade agreement between the US, Canada and Mexico – the North American Free Trade Agreement – should be abandoned, and that high tariffs should be imposed on imports from countries that “take American jobs”. Specifically, he suggests raising a 45 percent tariff on imports from China, and a 35 percent tariff on imports from Mexico.

But nor does Democratic candidate Hillary Clinton embody a miracle cure for increased trade and greater investment. She has adopted a clear stance against the new free trade agreement that the US secured after seven years of negotiation with Australia, Japan and other countries, the so-called Trans-Pacific Partnership. Apart from abandoning the TPP representing a strategic and economic loss, it would worsen prospects of an ambitious and comprehensive Transatlantic Trade and Investment Partnership, which the EU and the US have been negotiating since 2013.

So why are both candidates’ trade agendas so worthy of our attention? There are two main reasons. The first is that the conditions facing US foreign trade are the most important mechanism through which Europe and the world economy could be affected economically by the new President’s policy.

The second relates to the structure of the US political system, which confers the President with considerable authority to implement protectionist policy. The power-sharing structure inherent in the country’s political system does not prevent the country’s next president from forcing through protectionist measures.

The President does require a mandate from Congress to negotiate new free trade agreements, and new free trade agreements have to be approved by Congress to come into force. However, Congressional approval is not required to abandon free trade agreements already entered. There are examples of former Presidents who have exploited this room to maneuver to erect various trade barriers.

Analysis of the trade policy proposals that have been presented during this presidential election clearly indicate that they would represent an economic shock if they became a reality. If some of the more draconian proposals became reality, the outcome could be up towards four million job losses in the US alone. Obviously, this would have negative knock-on effects that would damage Europe, and especially countries and regions like Sweden, which have extensive trade with the US.

We should add that at present, precisely how willing Donald Trump and Hillary Clinton would actually be to realize each of their trade policy agendas remains hard to assess, regardless of what is possible to implement in purely practical terms. Nevertheless, there is no shortage of concerns hanging over global trade.

The risk is that the halcyon days of free trade have passed. From having enjoyed broad-based political support from right and left, free trade now appears to be under fire from both sides. Responsible politicians, in partnership with the business and academic communities, really need to pull together and stand up for globalization, economic openness and collaboration, which free trade is fundamentally about. If not, the potential for jobs and growth on both sides of the Atlantic is under threat.

Article by Maria Rankka, CEO of the Stockholm Chamber of Commerce, and Andreas Hatzigeorgiou, Chief Economist of the Stockholm Chamber of Commerce and Research Fellow at the Ratio Institute.


‘Chemical crayfish’: Why does the Swedish media love killjoy festive news?

It's time for this year's "kräftskivor", Swedish crayfish-eating parties! A cause for celebration? Not if the Swedish media has its way.

'Chemical crayfish': Why does the Swedish media love killjoy festive news?

Sweden’s main newswire this week ran a story warning that an analysis of the eight brands of Swedish crayfish available in the country’s supermarkets contained elevated levels of PFAS, a persistent pollutant which can damage your liver and kidneys, disrupt your hormones, and even cause cancer. 

But don’t worry. If you weigh 70kg or more, you can still safely eat as many as six of the outsized prawn-like crustaceans a week without being in the risk zone. 

While I’m sure the news story, which was covered by pretty much every paper, is accurate, it is also part of a grand Swedish media tradition: running miserable, killjoy news stories whenever there’s a sign that people might be planning to have a bit of festive fun. 

The two public service broadcasters, Swedish Radio (SR) and Swedish Television (SVT) are by far the worst offenders, their reporters unusually skilled at finding a downbeat, depressing angle for every public celebration. 

To give readers a sense of the genre, we’ve spent half an hour or so searching through the archives. 

‘This is how dangerous your Christmas tree is’ (and other yuletide cheer)

Source: Screenshot/SR

Christmas is a time for good food, drinking a little too much, and cheery decorations to ward away the winter darkness. But have you considered the risks?

SR has.

In “This is how dangerous your Christmas tree is”, a local reporter in Kronoberg looked into the possibility that your tree might have been sprayed with pesticide, or if not, might be covered in pests you will then bring into your house. 

By far the most common recurring Christmas story reflects Sweden’s guilt-loaded relationship with alcohol. 

You might enjoy a few drinks at Christmas, but what about the trauma you are inflicting on your children?

In this typically festive report from SVT in Uppsala, a doctor asks, ‘why wait for the New Year to give up alcohol? Why not start before Christmas?’, while the reporter notes that according to the children’s rights charity BRIS, one in five children in Sweden has a parent with an alcohol problem, with many finding drunk adults both “alarming and unpleasant”. 

God Jul! 

The Swedish media finds ways to make you feel guilty about the food you eat at Christmas too. You might enjoy a slap-up Christmas dinner, but what about those who suffer from an eating disorder? SVT asked in this important, but less than cheery, story published in the run-up to the big day. “This is the worst time of the year,” Johanna Ahlsten, who suffered from an eating disorder for ten years, told the reporter. 

Don’t you just love a cosy Christmas fire? Well, perhaps you shouldn’t. A seasonal favourite in Sweden’s media is to run warnings from the local fire services on the risk of Christmas house fires. Here’s some advice from SVT in Blekinge on how to avoid burning your house down. 
Those Christmas lights. So mysigt. But have you ever added up how much those decorations might be adding to your electricity bill? SVT has. Read about it all here
Finally, isn’t it wonderful that people in Sweden get the chance to go and visit their relatives and loved ones over Christmas.
Well, it’s wonderful if you’re a burglar! Here’s SVT Jämtland on the risk of house break-ins over the Christmas period. 
Eat cheese to protect your teeth! and other Easter advice 
“Eat cheese after soda”. Good advice from Swedish Radio. Photo: Screenshot/Richard Orange
For the Swedish media, Easter is a fantastic opportunity to roll out all the same stories about the risks of open fires and alcohol abuse, and that they do. But the Easter celebration has an additional thing to be worried about: excess consumption of chocolate and sweets. 
Here’s Swedish Radio, with a helpful piece of advice to protect your teeth from all that sugary ‘påskmust’, Sweden’s Easter soft drink. “Eat cheese!”. 
Yes, you and your children might enjoy eating all those pick-and-mix sweets packed into a decorated cardboard egg, but have you thought who else has had their grubby hands on them? SVT has. In this less than joyous Easter article  a reporter gives viewers the lowdown on “how hygienic are pick-and-mix sweets?” (According to the doctor they interview, sugar acts as an antibacterial agent, so they are in fact less dangerous than the newsroom probably hoped). 
Perhaps though, it’s better to avoid those unhealthy sweets altogether, and instead cram your mouth with healthy raw food alternatives, as SVT advises in this Easter report
Aren’t daffodils lovely? Well they’re not if you’re a dog. They’re deadly, according to this Easter report from Swedish Radio on all the “dangers lurking for pets over Easter“.
Glad Påsk!
Midsommar drowning  
Midsommar, again, has all the same possibilities for worried articles about excess drinking etc, but in the summer there’s the added risk of drowning. 
From Midsummer until the start of August, the temp reporters who take over Sweden’s newsrooms as everyone else goes on their summer holidays churn out a steady stream of drowning stories, all of them with a slightly censorious tone. After all, most of these accidents are really about excess drinking.
Here’s SVT Västmanland tallying up the Midsummer weekend’s death toll in a typical story of Midsommar misery. 
So, what is the reason for the Swedish media’s taste for removing as much mirth from festivities as possible?
It’s partly because Sweden’s media, unlike that of many other countries, sees its public information role as at least as important as entertaining or interesting readers, so an editor is likely to choose a potentially useful story over a heart-warming one. 
This is the aspect of the Swedish media beautifully captured by the singer Lou Reed when talking about how he’s more scared in Sweden than in New York in the film Blue in the Face
“You turn on the TV, there’s an ear operation. These things scare me. New York, no.” 
But it is also reflects the puritanical streak that runs straight through Swedish society, leading to a powerful temperance movement, which meant that by 1908, a staggering 85 percent of Socialist parliamentarians in Sweden were teetotallers.
Sweden is now a liberal country where you can get good food and drink, and enjoy a decent nightlife, but sometimes that old puritanism bubbles up.