Speech by President of the Republic of Finland Tarja Halonen at the Brazilian-Finnish Business Forum luncheon in São Paulo, Brazil, 3 November 2003

Let me congratulate Mr Horacio Lafer Piva and Mr Juha Rantanen, the co-chairmen of the Brazilian-Finnish Business Forum, for holding a joint Business meeting today. I extend my gratitude to them and to their respective business communities for their interest and work to foster and widen business relations and co-operation between our two countries.

There is a long tradition of good political and economic relations between Finland and Brazil. On the global level we participate in multilateral co-operation for example in the United Nations and as members of the World Trade Organisation. On the regional level we have the European Union-Mercosur framework and then of course we have excellent and long-standing bilateral relations.

Brazil is the biggest country in South America politically and economically and thus of great importance to Finland. Brazil, like Finland, exercises active and constructive approach towards regional integration and plays an active role in the multilateral context promoting stability globally and regionally.

For Finland the breakdown of the talks at the WTO ministerial conference in Cancún was very disappointing. Every country lost in Cancún. Our major concern is, however, that the poorest and the weakest countries will suffer most from this failure. The strongest will always find ways to promote their interests in the world trade. The evident focus of many countries towards bilateral trade agreements can only be the second best option to multilateral solutions. Developing countries are the ones that should benefit most from trade liberalisation and multilateral arrangements.

Despite the present difficulties, Finland remains hopeful and strongly committed to pursue Doha Development Agenda. In this spirit we urge all parties to flexibility and commitment to achieve a comprehensive agreement. The major players – EU, USA and G21 - need to intensify their efforts and listen carefully and patiently to those developing countries that are concerned about further liberalisation of their markets, to bring about a more focused agenda for the WTO and to seek overall progress in the process already in the foreseeable future.

The lessons of Cancún must be taken seriously. The challenges facing us are sizable. I am an optimist at heart, however, and I believe that we can find our way forward. Globalization will in any case continue and the best way to govern it is multilateral agreements. In the work of the World Commission on the Social Dimension of Globalization, which was established by the International Labour Organization, President Benjamin Mkapa of Tanzania and I as co-chairmen have learned that the absolute precondition for governing globalization is cooperation. Our commission includes representatives from different areas of life around the world. We hope that our report at the beginning of next year will help achieve a fairer globalization which corresponds to people's needs and underlines the importance of employment.

Finland’s membership in the European Union has improved opportunities for co-operation between Finland and Brazil. EU and its member countries are the largest trading partner, investor and development co-operation partner of Brazil. Strong EU-Latin American partnership reflects the importance of Brazil, Mercosur and the whole Latin American region. Respect for democracy, human rights and the rule of law, as well as promotion of sustainable economic, social and environmental development form the fundamentals of our strategic partnership. There is also a strong will of both parties to further strengthen the relationship in the future.

I am pleased that the business communities of Brazil and Finland so strongly support the negotiations of an association agreement between EU and Mercosur. The free trade part of the agreement is certainly the most important and concrete element of the agreement for the business community. In addition to that the agreement entails chapters on several other important aspects reflecting the deep and wide relations of EU and Mercosur. Political dialogue has also an important influence on our trade relations. I am convinced that democratic, free and stable societies are the best to make profitable business with. The intended agreement foresees also development of co-operation in many new sectors, which also are relevant to the business community.

Adoption of this agreement would entail significant benefits for both Finnish and Brazilian companies in the form of increased trade and co-operation and enhancing their competitiveness both in each others’ as well as on third markets. Finland pursues towards the conclusion of the negotiations in the planned timetable, by the end of year 2004. We want to achieve a well-balanced association agreement taking into account the legitimate interests and adjustment needs of both parties.

Then we have our bilateral level, which is of course from the companies’ point of view the most concrete one. I do not, however, want to go into details in this respect as you have already spent the whole morning discussing these issues. I would just like to mention briefly that despite temporary fluctuations, our trade relations have developed favourably during the recent years and Brazil remains our major trading partner in Latin America.

The prospects to develop and consolidate our business relations in the future are excellent. To take good care about these possibilities, Finnish companies have established themselves increasingly in Brazil. According to a recent survey conducted by the Confederation of Finnish Industry and Employers, their investment has quadrupled since 1997 and will more than double their investments in the next five years. The general reasons behind this development are the internationalisation of Finnish industry, the good complementarity between the production programmes of the Finnish companies and the needs of the Brazilian industry and economy, the political reform and deregulation in Brazil and the implementation of regional integration in the Mercosur. One particular result of this survey was the clear and positive correlation between the internationalisation of companies and the domestic employment. The personnel of internationalised companies increased also in Finland while personnel of companies operating only in or from the domestic market decreased.

There are extensive future possibilities for Finnish and Brazilian industries in many sectors, including information and communication technology, forest industry and forestry, energy sector, metallurgical industry as well as several sub-sectors of engineering industry. Today’s Business Forum here in São Paulo serves as an excellent platform for contacts between business leaders and expanding business relations and company networking between Finland and Brazil.

Competition on attracting foreign direct investment is more and more the major target of countries in the world. Therefore, also Finland sees it necessary to complement our bilateral legal framework by concluding a bilateral agreement on promotion and protection of investment between Finland and Brazil. At the same time we are a strong supporter of principal guidelines for a investments within the WTO-system guaranteeing equal and non-discriminatory rules for all players.

The Finnish government and companies work closely together in order to develop trade and economic co-operation with Brazil on a long-term perspective. I am delighted to say that the trust towards Brazilian economy in Europe and globally has increased. The opening up of the Brazilian economy and the deepening regional integration are jointly enhancing company competitiveness and strengthening economic structures to cope with present and future challenges and problems. In the same positive spirit I hope my official visit as the President of Finland to Brazil will further strengthen the political and economic relations between our countries.