Response to interpellation 2023/24:537 on the goal of trade policy
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the goal of trade policy. M believes that rule-based trade is crucial for sustainable economic growth 1 and that the concept of fair trade creates ambiguity 1. M wants to reduce bureaucracy and trade barriers to strengthen Swedish competitiveness 2, promote entrepreneurship 3 and win investments 3. M argues that Swedish companies are world leaders in responsible business 4 and warns that uncritical EU legislation can lead to lost jobs 3. S believes that Sweden must be a voice for social and environmental sustainability and that Sweden should be a pioneer for free, sustainable and fair trade 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Statsrådet Johan Forssell (M)
Madam Speaker! Aida Birinxhiku has asked me on what grounds the government deleted the goal of fair trade in the budget bill for 2023 and onwards.
Let me begin by saying that open and rules-based global trade is a prerequisite for building long-term sustainable economic growth, which also contributes to combating poverty and promoting sustainable development in developing countries.
Sweden is a loyal friend of free trade, and the government works for free, sustainable and rules-based trade. The multilateral, rules-based trading system, primarily through the WTO, creates predictability and level playing fields for all countries. It contributes to growth and to reducing global poverty.
As I previously stated to Aida Birinxhiku in response to the written question 2022/23:394, the concept of fair trade can have different meanings depending on the sender. From some global actors, the concept stands in opposition to free trade and is instead an expression of mercantilism and reciprocity. Relying on the term opens up an undesirable ambiguity regarding where Sweden stands on free trade issues. For the government, it is important to be clear to the rest of the world that we are working for robust and rule-based frameworks for world trade. Our ambition is to create stability, long-term perspective, and predictability for international trade.
It is within the framework of the rules-based trading system that we can work to create conditions to protect the environment, sustainability, and good working conditions to a greater extent. Rules-based trade is thus a clearer and broader concept than fair trade.
Aida Birinxhiku (S)
Madam Speaker! I thank the Minister for Foreign Trade for the answer. I would first like to state that this debate is particularly urgent against the background of the increased protectionist trends in the world. In times like these, it is perhaps more important than ever that Sweden is a strong voice for free, sustainable and fair trade.
The Minister of Justice is of the opinion that the term fair trade opens up for ambiguities regarding where Sweden stands on free trade issues. My firm opinion is that it is rather the government's choice to abandon the goal of fair trade that does so.
Sweden has a long tradition of standing up for a policy that ensures that the benefits of global trade can come to everyone, that is to say a fair trade policy. It is something that we have been consistently agreed upon.
Therefore, it is remarkable that the current government suddenly abandons the goal of fair trade. And it is equally remarkable that representatives from the government's party in this rostrum claim that fair trade implies more burdens for companies and that it makes it harder to do business. This, if anything, opens up for ambiguities, and it sends unwanted signals about where Sweden stands on these issues. It sends signals that Sweden no longer prioritizes social and environmental sustainability in global trade, and it sends signals that Sweden is no longer a pioneer for free, sustainable, and fair trade. And this, if anything, should cause concern for the government.
Madam Speaker! I want to emphasize that this is not a question of semantics, but of how the government conducts its trade policy.
The Minister and I agree that WTO cooperation is fundamental to maintaining fair rules of the game in global trade. But it is not enough. Sweden must be a strong voice for fair trade, even within the EU cooperation. There we see that the government instead has tried to oppose a historic EU legislation that ensures companies' responsibility for the environment and human rights, a legislation that is fundamental in the work for a more fair trade.
Another important tool is the global partnership Global Deal. But there we see that the government lacks ambitions to expand and develop the partnership. In practice, there therefore seems to be an inability, or even an unwillingness, from the government to pursue a policy that involves Sweden standing up for fair trade.
Madam Speaker! I am convinced that Sweden's strength lies in our openness, in our trade relations with the rest of the world and in our striving to stand up for a policy that increases prosperity and lifts people out of poverty, which strengthens the social dialogue and the protection of workers' rights and which increases the pace of the global climate transition. Does the current government no longer stand behind this?
Statsrådet Johan Forssell (M)
Madam Speaker! I thank you again for the question, which we naturally often have reason to return to in many different discussions in the committee and in the EU Committee.
This government has chosen to take a much more forward-leaning position than the previous government regarding precisely the free trade work in order to ensure good competitive conditions for our fantastic Swedish companies, not just on paper but also in reality.
An important part of that work is to ensure that we deal with unnecessary bureaucracy and administration, because it continues to be a very big problem, not least in the EU's internal market. A very large part, even a majority, of the type of trade barriers and problems for companies that existed at the creation of the internal market 30 years ago continues to remain.
The background is very obvious. The EU's share of world trade is falling. It has fallen from 25 percent 30 years ago to 17 percent today. The forecasts forward point to an even greater loss.
Against that background, one could have hoped that much of the EU work or the political proposals, for example from the opposition, in that part would be about how we simplify for companies and remove unnecessary bureaucracy and regulations that seem to hinder our companies' opportunities both in the internal market and for the export of their products.
Instead, unfortunately, the focus is usually something else. Yes, one says that one is for competition, openness, free trade and so on. But in many of the proposals that are put forward, the development goes in a completely different direction, not least in the EU work, where new complicating burdens for companies are coming. One only has to ask the entrepreneurs themselves. They are very clear on this point. It will make it less attractive to invest in Europe. It will make it harder to export products. It will worsen the opportunities to start, run and develop companies, with fewer job opportunities as a result.
In that light, this discussion should be seen, which easily becomes quite semantic. I and the government think, Madam Speaker, that it is the substantive issues, the content, that must be in focus rather than the labels.
I can only state that the concept of fair trade is most often used by forces that want to see less of what we, from the Swedish government's side, want to see, namely an open world trade with fewer trade barriers and less protectionism. It is used very often rather as a way to introduce new trade barriers and new problems. It would damage Sweden's conditions to become successful on the global world market.
A nearby example now as we approach election times - I am not thinking of the Indian election, even though this type of discussion also occurs there - is that in the large country in the West it was precisely this type of argumentation that Donald Trump had when he interrupted the free trade negotiations. He did not want to see free trade, but he wanted to see fair trade.
From the Swedish government's side, we have a completely different starting point in this. We mean that the concept of rule-based, which is a much clearer concept, can be directly attributed to, for example, WTO regulations. One can turn to a court and various review bodies to establish in that part. It is a much more precise concept. It captures the Swedish free-trade-friendly line better but is also a concept that becomes much more precise for our companies. Just as uncertainty about concepts does not only complicate things for companies but also makes Sweden's voice in the world less clear. Therefore, we have chosen a better concept: a rule-based world trade. The government has no intentions or ambitions to change that.
Aida Birinxhiku (S)
Madam Speaker! I thank the Minister for the answer.
That the benefits of global trade can come to everyone is a prerequisite for people to believe in free trade, especially in times of increased protectionism. It is in fact a prerequisite for the rules-based trading system that the government likes to speak about. That is why Sweden has a long tradition of standing up for free trade and countering protectionism.
We have shown that it is fully possible to combine free and open trade with better conditions for workers' rights, high climate requirements, and sustainable development. In Sweden, there is broad support for free trade. But we must not forget that in more and more countries, it does not look that way.
Madam Speaker! As I mentioned earlier, this is not just about the government having chosen to change the goal for trade policy and striking out just that part which concerns fair trade.
As I mentioned in my previous speech, we also see that the government has in practice opposed a historic EU piece of legislation on corporate responsibility for, for example, forced labor, child labor and environmental destruction – a piece of legislation that plays a fundamental role in the work for fairer trade.
This government has, ever since it took office, tried to slow down and block this bill. Sweden was even the only EU country that explicitly signaled that it intended to vote no to the directive, and the Minister knows this very well.
I am pleased that the Belgian presidency, despite this, managed to gather a majority of the EU countries behind the legislative proposal. The latest compromise proposal, which the Swedish government has now also backed, is watered down in several respects. But it is undoubtedly better than having no common regulatory framework in place.
Madam Speaker! I also want to return to my previous statement regarding the global partnership Global Deal, for it is there that we see the government's commitment faltering. The reason I mention it is that the partnership plays an important role in the work for trade that strengthens social dialogue and the protection of workers' rights. In just a few years, this Swedish initiative has succeeded in bringing together over a hundred actors from all over the world, including the USA, which joined the partnership during the autumn of 2022. And there is great potential to expand and develop Global Deal. But when I submitted a written question on this to the Minister for Foreign Trade, I received the answer instead that the time is ripe for Sweden to take a step back and that other partners should take a more prominent role. It is therefore quite obvious that those ambitions do not exist within the current government, and I can only regret that.
Madam Speaker! I note to the highest degree that the Minister wants to be particularly clear to the rest of the world about where Sweden stands on free trade issues. Therefore, I hope that the Minister can give a clear answer in this debate. This also applies to my questions regarding the EU directive and the Global Deal partnership. Does the government, through the policy that I have set out, want to make it clear to the rest of the world that Sweden is no longer a pioneer for fair trade?
Statsrådet Johan Forssell (M)
Madam Speaker! I believe we have somewhat different starting points in this debate. I am not looking so much at the concepts but more at the facts in this discussion.
It is inevitable that the EU's share of world trade is falling like a stone, quite simply. I think it is very concerning. It is about us becoming less wealthy, that we get higher unemployment and that jobs move to other parts of the world. We also see how the Swedish export value to Asia has lagged behind, for example, Denmark over the last 20 years.
Then the question is whether one is prepared to take measures to change this or if one is satisfied with it continuing to be roughly as it is. The forecasts also indicate that this development will continue moving forward. We are lagging behind. We are losing in competitiveness, in investments, and in new jobs. We see how companies simply become less inclined to invest on the European continent.
When speaking with entrepreneurs about this, they very often point specifically to the regulatory burden and to the fact that legislation is implemented in a way that makes it difficult and complicated and, not least, expensive.
Everything is relatively speaking in this. If one, for example, compares it with what is happening in the American economy - we are competing with USA just like with many other regions and countries in the world - the differences become obvious.
That is why I become a bit thoughtful when I hear Aida Birinxhiku say that on one hand, one is for competitiveness and free trade - which is very good - but on the other hand, one pushes for legislation that the companies themselves so clearly point out will make the opportunities for trade, jobs, and investments more difficult. It doesn't really add up.
It is clear that there are perhaps thousands of Swedish jobs at stake here, which risk being lost if further administration and regulatory burden are introduced. This is very serious. I hope that the Social Democrats have thought through this position. To lose jobs and investments right now would be very concerning.
I am proud that this government has taken a very active part in the discussions. We have tried to achieve a much better compromise proposal, and we have also succeeded in reaching such a compromise, which takes much more into account the risk that this will hinder economic growth, investments, and jobs. But this must also happen in a long series of other areas.
It is precisely this that we point out in our new trade strategy, which is much more forward-looking than the previous government's and does not only cover export issues but trade issues in general, including investments in Sweden, and our competitiveness as a small country. It is a much broader strategy that we have presented and which has been well received.
An important part of this strategy is the fact that Swedish companies today are world leaders when it comes to acting responsibly, long-term and purposefully. It is clear that there can be problems with individual companies – there can always be – but as a country, we are very much associated with responsible business, socially, environmentally and in several other areas.
I believe this is a strength for Sweden. I notice it during many of my travels, where I try to lay the foundation for more Swedish businesses and more jobs in Sweden. Many countries already see this as a success today, and it is something we confirm in our strategy.
But we must be cautious with further EU regulations and with the protectionist forces that say "Free trade is welcome, but it must be fair, and not just in our areas and in our economies; it is good if others open up, but not us." Unfortunately, we see how that type of protectionist forces is now spreading in the world, and we want, from the Swedish government's side, to offer another way forward, with more of free and rules-based trade.
Aida Birinxhiku (S)
Madam Speaker! Thanks to the Minister for Foreign Trade for this debate! I note that the Minister for Foreign Trade only thinks of surcharges and burdens when I speak about fair trade. I think that is telling in itself.
I also want to say something about the EU directive on corporate responsibility for the environment and human rights. This is a legislative proposal that has been requested by large parts of the business community in Sweden. We see that Swedish companies are at the forefront when it comes to sustainability issues, but today they are forced to compete on unfair terms with companies that do not make the same priorities.
As has been previously stated, Sweden has a long tradition of standing up for free, sustainable and fair trade. The Minister's response in this debate gives no reason to depart from that, rather the opposite. Both the Minister and I have expressed our concern over the growing protectionist forces in the world. It is precisely these forces that make it important that we stand up for fair trade. It is, in fact, a prerequisite for the rules-based trading system that the Minister mentions.
Madam Speaker! The Government must continue to stand up for a trade policy that leads to more jobs, a stronger welfare state and increased prosperity - for everyone. Sweden shall be a pioneer for free, sustainable and fair trade. There shall be no ambiguity about this.
Statsrådet Johan Forssell (M)
Madam Speaker! Since day one, the Government has been more proactive in promoting Swedish entrepreneurship, Swedish innovation, and our competitiveness – issues that have not been sufficiently prioritized previously, either in Sweden or in the European Union. We also see that the investments as a result of this have decreased over a long series of years.
Now we want to change this. We want to be more offensive. We want to lay the foundation for Sweden to start winning these types of investments. Then it is not enough to just say that one is for more trade and entrepreneurship; anyone can do that. We must always look at proposals of that type that come. Not least a good deal of the EU legislation that is coming now could have dramatic effects for many small and medium-sized enterprises.
I want to repeat what I have said earlier: If one is uncritical of this and only looks at the social aspects without considering administration and regulatory burden, it could mean that several thousand jobs in Sweden are lost. I hope that the Social Democrats take this into account when they so uncritically align themselves with the increased regulatory burden we are now seeing from Brussels.
We must change this. Otherwise, the development for Europe will continue as before: investments will leave Europe and go to the USA, China, or other parts of Asia instead. It is precisely this growth perspective that we are now putting in, and there it is important that we are clear.
The fair trade that I am asked about here is not a defined concept. It is better to have rule-based trade that leans on WTO regulations. We do not want to be associated with the type of protectionism that we see the concept of fair trade is often associated with, not least from Donald Trump's side. We stand up for a free, sustainable and rule-based world trade instead.
Thank you, Aida Birinxhiku, for this debate!
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.