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The President of the Republic of Finland: Speeches and Interviews

The President of the Republic of Finland
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Speeches, 9/8/2006

Speech by President of the Republic of Finland Tarja Halonen at a conference of the Korea-Finland Economic Council on 8 September 2006

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It gives me a great pleasure to address this joint Conference of the Confederation of Finnish Industries and the Federation of Korean industries. Your previous meeting took place in 2002 in Seoul when my husband and I paid a state visit to Korea. Our delegation was accompanied by a Finnish business delegation.

This time again the joint Conference takes place as a part of the state visit programme. The state visit is the first one ever from Korea to Finland. In addition, your meeting today has taken place on the eve of the EU-Korea Summit and the ASEM Summit. For the couple of days, Finland is the scene of strengthening the Asia Europe relations at all levels from businesses and trade unions to Heads of State and Government.

Next year, in September, it will be 30 years since the launch of the joint Economic Council. Your long-lasting co-operation has certainly contributed to the deepening of the economic ties between our countries. I am pleased to see that there are so many companies from both Korea and Finland that actively participate in these events.

* * *

Political and economic relations between Finland and Korea are excellent. Trade between the two countries has developed favourably. During 2004 and 2005 the increase in the total volume of trade was impressive, and, in particular Korean exports to Finland have grown rapidly.

For more than ten years, comparisons of competitiveness have formed an important part of general debate about economy and society. Such international comparisons have ranked Finland among the most competitive countries in the world, and we have also done well in other international comparisons. I believe that our success in this respect is partly because the Finnish system is based on the so-called Nordic welfare society model. This system is grounded on solid democracy, shared responsibility and social justice. We have invested in education and in social and health care services. The public sector is relatively extensive but also reasonably transparent and efficient. There is very little corruption in Finland, which allows sound collaboration between the private and public sectors in this transparent society.

The Finnish economy has made exceptional progress since the severe recession we faced in the early ’90s. The prospects for the Finnish economy and employment situation over the next few years are favourable. Though many industrial jobs have moved abroad, we have also started, since the end of last year, to generate more new jobs in industry than we have lost. Unfortunately, our unemployment rate remains close to the European average, but the employment rate was 68% in 2005, which is – in European terms – a relatively high level.

Finland cannot compete internationally with the cost of labour, but we can base competitiveness on higher productivity and skilled, well-educated people. Both employers and employees in Finland recognise the importance of training to increase productivity. The motivation to learn new skills increases when workers feel that they are trusted and that their skills are appreciated at the workplace. Korea and Finland share the same positive attitude towards lifelong learning. Both countries have also done very well in the OECD’s Pisa studies. We can be good partners to each other in the areas of technology, including biotechnology and environmental technology, and of research and other expertise and innovation.

In this respect, I would also like to mention at this forum a couple of recent examples of cooperation projects. The Finnish Funding Agency for Technology and Innovation (TEKES) and the Korea Institute of Industrial Technology Evaluation and Planning (ITEP) have taken concrete steps to intensify their co-operation. In the area of education, a good example of practical cooperation is the Executive MBA programme created by the Helsinki School of Economics and the Institute of Industrial Policy Studies. By June 2006, 1500 Korean executives have graduated from this 'KEMBA' programme, which started in 1995.

We also hope that the direct air route between our countries will be launched soon. This would further enhance the economic contacts between Finland and Korea, and would particularly have a positive impact on tourism and individual contacts between the two countries.

* * *

On the global level our two countries participate in the multilateral co-operation as members of the World Trade Organisation. The WTO's Doha negotiating round has recently been suspended. So far, there has not been a consensus among the WTO, and suspending the Doha Round should be a cause of concern for all of us – for industrial and developing countries alike.

As the current Presidency of the European Union, Finland actively promotes the internal discussions within the Union on the possible ways to proceed with the Doha Round. The EU's fundamental objective has not changed. Our goal still is to conclude the Doha Round successfully. The EU is willing to do its utmost to provide new impetus for negotiations.

Even with the rapid spread and the increasing relevance of regional and bilateral trade agreements, there is no real substitute for the WTO. Well-designed regional and bilateral agreements can and should usefully complement the global multilateral system.

The WTO system continues to function despite the suspension of the negotiations. We also expect new members to join the WTO in the near future. The commonly agreed rules provide stability and predictability to the global economy even now when formal negotiations on new commitments have been put to a temporary halt.

* * *

Asia and Europe have become in many ways dependent on each other, as trade linkages and cooperation in other fields have increased rapidly. Just to highlight the importance of the Asia-Europe cooperation, it is useful to note that, roughly speaking, ASEM partners represent today 40 percent of the world’s population, half of the global GDP and 60 per cent of the world trade.

Korea and the EU are important partners in the Asia-Europe framework. The EU, as a whole, is the largest foreign investor in Korea, and Korea's second-largest trading partner after China. The EU-Korea co-operation is functioning well, and the mutual aim is to deepen this dialogue.

In recent years, the EU and Korea have been able to eliminate a number of trade barriers, thus facilitating the favourable development of our trade and investment relations. The diverging regulatory requirements may still cause some non-tariff barriers to EU businesses to access the Korean markets. The EU-Korea Summit, which will take place here in Helsinki tomorrow, will provide a good forum to discuss all issues of mutual interest.

Creating a favourable environment for trade and investment is important, because in the long-term development of our economic relations, firms and businesses play a key role. Finland is prepared to do her share to support and facilitate this process.

To conclude, I wish to thank the Confederation of Finnish Industries and the Federation of Korean industries for their work to promote the trade and economic relations between Korea and Finland. I hope that the joint Conference has been successful and that the good spirit of this co-operation will continue also in the future.

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Updated 9/8/2006

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