Speech ICC World Business Summit 12 June 2008
Fredrik Reinfeldt, Prime Minister

Prime Minister Fredrik Reinfeldt's speech at the ICC World Business Summit in Stockholm

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Your Royal Highness,
Ladies and gentlemen.

I am very pleased to be here at the first ever ICC World Business Summit in Stockholm.

I find it interesting to observe how the greater world discussion change from time to time. A few years ago we all wondered if there really was no end to the remarkable growth that we could see. Now, the situation is a bit different.

In a time of turbulence in the world economy it is of utmost importance to be steadfast in our common goal for open markets based on market economy and the rule of law. History tells us that at times like this protectionists tend to raise their voices and call for nation based protective legislation.

As you all already know, this was also the backdrop to which the International Chamber of Commerce was founded in 1919: An ambition in a post-war world to hold back the tide of protectionism and economic nationalism.

The idea of using trade as a mean for peace - using the economy to integrate countries closer - also become the platform for one of the worlds most successful peace projects after the second world war: the European union. A union that now includes 27 countries.

History also tells us these principles are crucial for both a successful economy and society. They are the key issues that made the western world and Sweden grow rich.

For my government free enterprise, market economy and an open attitude towards international competition is crucial.

We favor policies that encourage knowledge and entrepreneurship. And we take a clear stand in favor of an open society and international cooperation in addressing global issues such as poverty and climate change.

Free trade is a cornerstone of Swedish foreign and trade policy. It is also the basis of our domestic economic policy. Swedish prosperity is built on international trade and the ability of our companies to compete on global markets.

The economic benefits of this development are obvious, but globalization also gives us another important advantage - a increased interdependency between countries, corporations and organizations, leading to increased stability and peace.

Sweden for example has over the last fifty years gone from a more or less monopoly situation regarding ownership of assets to becoming one of the most internationalized countries in the world:

Foreign companies employ over 570 000 Swedish citizens, at the same time Swedish companies employ over one million people abroad. And export trade stand for around 50 per cent of our GDP.

Over the past 150 years, Sweden's development, from poverty to a welfare state, is the history of free trade. Today globalization is a fact of life, and international trade is growing.

Not just for Sweden - worldwide international trade is growing and has done so for a long time. Interaction among people and businesses is growing and has done so for a long time.

Knowledge, information, technology and capital are no longer held back by national borders. They are moving across the globe and doing so with a constantly increasing speed.

For some this symbolize new opportunities and possibilities of interaction, development and progress. Others might feel uncertain about the future and raise questions if it holds a place for them.

This is just a fragment of globalization. A globalization that also holds many possibilities of new knowledge, emerging markets and individual discoveries in its hand.

Because at the same time we can feel the increased competition knocking on the door, we can also see there are many opportunities for the parts of the world that find ways of coping successfully with globalization.

I would claim one thing as especially vital in the era of globalization. That is the need of interaction, exchanging new ideas and cooperation in order to find the best and most progressive ways of managing in a fast moving world.

There are several challenges in our common ambition for a peaceful and flourishing world economy. The first, and in my opinion, very important challenge is to a higher degree integrate the developing countries in the world economy.

Free trade can give a welcome boost in both growth and in the fight against poverty. This is true especially regarding the situation in most parts of Africa.

Free trade and higher integration on world markets goes both ways. As we have to deregulate and abolish tariffs in order for their products to reach our markets it also stress developing countries to apply both democracy and the rule of law.

A mutual respect in support of these values lays the foundation for fair competition in a better functioning world economy. Much has been done but there is still much to do.

Take for example the question concerning intellectual property rights. A topic I know you will be discussing later today. More specific, the problem with counterfeiting.

This was once a problem mostly linked with CDs and luxury goods. Today piracy and counterfeiting are in fact badly hurting a wide range of industries. From food and drink, pharmaceuticals, electronics and textiles - to software, music and film industry.

I know that the ICC estimate that counterfeiting stand for 5-7 per cent of total world trade. worth an estimated 600 billion US-dollars.

Not regarding the problem estimating how large the ice berg actually is - we know of reports that tell us that EU-customs apprehended over 250 million pirated products in 2006. In Antwerpen only, customs was able to stop over 100 containers containing more than 20 million different plagiarized products.

Counterfeited products are now produced by industrial means in some countries and increasing volumes of illegally produced products are crossing the borders. And it gets even more serious regarding counterfeiting medicine being spread around the world.

According to estimates from the World Health Organization up to 60 per cent of medicine in developing countries are counterfeit. In reality a fact that mainly hurt people with few or no possibilities to prove their rights - poor people in developing countries.

This is also why we must try to provide a more sustainable framework for international trade. The best way to do that is through the World Trade Organization.

The WTO-negotiations are now at a critical stage. My government gives high priority to an ambitious result in the Doha Round concluded by the end of this year. We cannot afford to lose this historic opportunity.

A failure would be a serious blow to the WTO, to the multilateral trading system as such, and to the global economy as a whole. This is not what we wish for - given the recent turmoil on financial markets.

However, I am quite optimistic. There has been positive signs during the last couple of months in the WTO-negotiations. It seems like there is a genuine commitment by key players to walk the extra mile.

The best way to promote international trade is through multilateral agreements. That is also the only way to secure a just, stable and predictable framework for trade. For this reason the finalization of the Doha Round is very important.

Trade policy can, and should, be designed to strengthen the ability of developing countries to become better integrated into the world economy and to benefit more from growing trade.

If we shut the door to our markets, we are also shutting the door to development. And by this closing the door of opportunity for millions of people to lift themselves out of poverty.

Instead protectionism will lock resources in activities that are not viable in the long term - and to consumers being adversely affected by more expensive goods and less choice.

When you discuss these types of specific problems one should keep in mind that people around the globe are better of now then for a hundred years ago.

Thanks to, among others, increased trading, growth and the promotion of human rights the world is now a better place to live. Governments has a responsibility to provide and promote the framework. In their turn corporations has a responsibility to behave and set good examples.

I believe that companies must see the implementation of business codes and practices not as short-term costs, but as long-term investments. Failing to act responsibly makes it harder to attract skilled staff and sell products and services.

It is of great importance to understand that CSR is, and rightly so, business-owned and business-driven. For Sweden, promotion of CSR is also an important link between two cornerstones of Swedish policy: an open trade policy and a foreign and development policy that strongly emphasizes the importance of human rights and sustainable development.

Sweden's ambition is to create open, fair and modern legislation for world trade in order to generate growth, employment and sustainable development. I am fully convinced that trade is essential in several aspects. Ranging from peace to growth.

Let me finish where I started, the year 1919, at the time post-war Europe. The mission for increased world trade and open economies was unsuccessful. As the world step by step moved to the brink of war, borders where closed and international trade declined in the name of economic nationalism. And we all know what then followed.

It is said that man learns from her mistakes. Let that be true. And may that lesson be that securing peace needs borders to be opened - not closed.

There is a strong link between open borders, free trade and human rights. We have all a responsibility to protect these values and do our best to promote and enforce them.

We are today witnessing a changing economic balance in the world. Asia is growing rapidly and countries like China and India are at the forefront. With globalization, the global economy has become even more integrated and new countries are joining in global trade.

For some of us, this development symbolizes new possibilities to meet, develop and advance - in a way that earlier generations could never even dream of.

Globalization offers new opportunities for trade and investment across borders. For governments, as well as for business, there are many new challenges involved, such as environmental impact, corruption or core labor standards.

Yes, we have made progress. But we must acknowledge that there is still work left to be done. The complex challenges of the 21st century require stronger and closer cooperation between countries, international organizations and corporations.

We are not running short of challenges in world. With both economic turbulence on world markets and a new food crisis we must make sure that the answer is not more protectionism and tariffs but the opposite. That is a challenge we all must take on.

Thank you for listening!