The Diplomatic Dispatch

The British Ambassador to Sweden blogs on The Local

Posts Tagged ‘trade’

Challenges and Opportunities for Europe

Monday, October 13th, 2014

A new Swedish government has taken office. A new European Commission is about to. It seemed to me a good time to set out some thoughts on some of the big priorities facing the UK, Sweden and our EU partners over the coming months. Here’s a translation of the article I wrote for Saturday’s Dagens industry, Debatt: Så kan Löfven hjälpa oss, describing what I see as the shared priorities.

For all EU countries, modernising our economies to create high quality, high value employment for the future is a shared challenge. Britain has seen employment growing rapidly in the last few years, but other European countries, not least those in the Eurozone have struggled.

Over the next 15 years Europe’s share of global output is forecast to halve.  This is partly about the emerging markets growing. But it also reflects the lack of underlying competitiveness in Europe.

So the challenge is how to create a more competitive EU, which will deliver prosperity for its citizens.  For the UK, this means making more out of the EU’s Single Market, the heart of Europe’s success over the last thirty years, but whose potential is still not fully realised.

The single market remains incomplete in services, energy and digital – the very sectors that are the engines of a modern economy – it is only half the success it could be.

The UK’s priorities, where we want to work closely with Sweden,  are therefore to advance services liberalisation, to reform the digital single market, increase innovation, advance free trade, improve regulation, deepen the single market in financial services, develop a more integrated energy market and deliver on our climate change ambitions. Taking each in turn:

Services: we want the new Commission to prioritise advancing the single market in high-value services sectors, such as construction and professional business services, by breaking down the remaining barriers. The services sector accounts for 70% of EU GDP and over 90% of new jobs, but it makes up just over 20% of intra-EU trade. This has to change.  Existing legislation should be redesigned to accommodate and encourage new ways of doing business and new proposals should be future-proofed to retain the flexibility to respond to future technological changes. Completing the Digital Single Market could alone add 4% to EU GDP by 2020.

Innovation: is key to sustaining growth for developed economies. Our companies cannot compete with the rest of the world on price alone. This requires a pro-innovation mindset, including better regulation, competitive product markets, and access to finance. In 2011 more than 70% of the world’s knowledge creation was taking place outside the EU and only 17% of the world-leading innovators in ICT come from the EU, compared to 52% from the US alone.

Trade: as consumers we benefit from free trade within the Single Market.  We need to free up the EU’s external trade. Therefore we want the next Commission to pursue an ambitious trade agenda. We’re confident Cecilia Malmström will do that.  An ambitious TTIP could bring annual benefits to the EU economy of €119 billion, or an extra €545 for every family of four in the EU.

Regulation: getting the right balance on regulation, encouraging growth, while protecting consumers, is more crucial than ever. Cutting unnecessary bureaucratic burdens is vital to developing the competitiveness of our businesses. We need a regulatory framework that promotes innovation, skilled jobs and access to world markets. A 25% reduction in EU administrative burdens on businesses could lead to an increase of 1.4% in EU GDP.

Financial Services: over the last five years the EU has undertaken a comprehensive reform of this sector, but but further work is necessary to deepen and strengthen the internal market and to ensure the sector provides financing for jobs and growth in a stable environment. The Commission should take action to improve capital markets so companies have access to the funding necessary to invest and grow.

Energy and climate: Consumers and businesses require affordable, secure and sustainable energy. By completing the internal energy market we could unlock substantial benefits for the EU. A recent report estimates the value of an integrated EU market to be as much as €40 billion a year by 2030 in electricity, and in gas as much as €30 billion a year.  Europe needs to move towards greater energy security and independence.

Above all, it also needs to offer global leadership towards getting an international climate agreement: a greenhouse gas reduction target of at least 40% could also result in gas imports falling by almost 10% from 2010 levels by 2030. Good for Europe’s economy and a crucial contribution to tackling the greatest global challenge of all: uncontrolled climate change.

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Thursday, June 27th, 2013

Peter Wolodarski wrote last week that the prospect of an EU/US trade deal was the best economic news in a long time.

I agree.  The launch of talks on what’s known in the jargon as TTIP (Transatlantic Trade and Investment Partnership) is something really important and welcome.

TTIP should be a trade deal like no other, creating a transatlantic economic bloc covering almost half of the global GDP.  Through developing global standards and trade rules, TTIP will have positive impact around the world.

TTIP would be a record-breaking Free Trade Agreement, aiming at deep economic integration between the world’s two largest economies, creating a transatlantic marketplace that already accounts for about half of world GDP (47%) and one third of global trade.  Each day goods and services of almost € 2 billion are traded bilaterally; this could rise substantially.  As our PM said, this could be “the biggest bilateral trade deal in history…a deal that will have greater impact than all other trade deals on the table put together.”

The aim for TTIP goes beyond reducing tariffs (which are already low), and includes narrowing the gaps between EU and US regulatory systems.  Aligned regulation will drive business integration and create economies of scale.  It will create common standards, reducing the cost of compliance for businesses that trade in both markets and in third countries too.

The aim is also to develop 21st century trading rules, in areas such as intellectual property rights, transparency and trade facilitation, which would create a model for future global agreements.

TTIP is designed to strengthen the world trading system.  Britain, Sweden and the whole EU have been frustrated at the lack of a global trade deal in recent years.  We hope TTIP will create a positive example.

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EU and US – partners for prosperity

Wednesday, February 13th, 2013

As Carl Bildt underlined in the Riksdag today, the US is Europe’s main international partner, on the security and prosperity agendas.

So the UK government welcomes, as Sweden does, President Obama’s call in his State of the Union Speech last night for what he called “a Transatlantic Trade and Investment Partnership” with the EU. Britain has been arguing hard for this, including in our role as G8 presidency.

David Cameron said today:

“It’s great that President Obama has set out his determination to agree a trade deal between the EU and the United States. We discussed this issue on Monday and we are both committed to launching negotiations this year. A deal will create jobs on both sides of the Atlantic and make our countries more prosperous. Breaking down the remaining trade barriers and securing a comprehensive deal will require hard work and bold decisions on both sides. But I am determined to use my chairmanship of the G8 to help achieve this and to help European and American businesses succeed in the global race.”

Our Trade Minister, Lord Green added that this was a “once-in-a-generation opportunity to liberalise trade fully between the world’s two largest trading blocs. An agreement could boost the European economy by more than £50bn – the biggest prize from any trade deal currently under way.”

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Trade, tax, transparency: the UK G8 agenda

Wednesday, November 21st, 2012

Next year Britain chairs the G8, the group of the world’s most developed Western economies. So what you might ask?

Some people ask: does the G8 still matter, when we have a G20, embracing also the emerging powers, including Brazil, India and China?

The UK’s answer is “Yes”. The G8 is a group of like-minded nations who share a belief in free enterprise as the best route to growth. And as the countries make up half of the world’s GDP, what we do can help solve vital global issues, stimulate economies and encourage prosperity all over the world.

The G8 Summit next year will be held in Lough Erne, Northern Ireland, a tribute to the success in promoting security and prosperity in that long-troubled part of the UK.
It will be focused on three priorities. Advancing trade, ensuring tax compliance and promoting greater transparency.

There is no greater stimulus for growth in the world economy than trade. As the G8, we have a collective responsibility to drive forward trade liberalisation.  The UK and Sweden are leading EU efforts to finalise a free trade agreement with Canada and to launch negotiations with Japan and America over the next year. We want G8 leaders to agree how we will accelerate progress across our ambitious trade agenda. An EU/US deal could provide an enormous boost to jobs and growth adding over £50 billion to the EU economy alone.

People rightly get angry when they work hard and pay their taxes, but see others not paying their fair share. So this G8 will seek to maintain the momentum on strengthening of international tax standards. We will look to go further on tax havens by improving tax information exchange. And we will work with developing countries to help them improve their ability to collect the tax that is due to them.

The UK is meeting our commitment to spend 0.7 per cent of our gross national income on aid from 2013 – and we will be holding other countries to account for their promises too. We will also be leading the way in the battle against hunger with a special event on food and nutrition a few days before the main meeting, to follow up on this year’s Olympic Hunger Summit.

The UK wants to use this G8 to support what David Cameron calls the “golden thread” of conditions that enable open economies and open societies to drive prosperity and growth for all. These include the rule of law, the absence of conflict and corruption, and the presence of property rights and strong institutions.

Transparency and accountability are vital for this. Take the issue of mineral wealth. We need to make sure that, for developing countries, this is a blessing not a curse. So the UK is leading efforts in the EU to require oil, gas and mining companies to publish key financial information for each country and project they work on. And I want this G8 to drive greater transparency all around the globe so that revenues from oil, gas and mining can help developing countries to forge a path to sustainable growth, instead of fuelling conflict and corruption.

These defining advances in trade, tax and transparency could lay the foundations of long-term growth and prosperity for generations to come.

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