Swedes and TTIP – Why are they so positive?

Swedes and TTIP – Why are they so positive?

The news in recent months has been mostly bad, with growing opposition against TTIP on both sides of the Atlantic. Politicians, civic organisations, and trade unions are arguing that TTIP, as currently framed will not be the positive force for employment and economic growth that it was set out to be, but instead constitute a threat to labour rights, the environment and result in a shift of power from democratically elected governments to large corporations. There is an increasing feeling that the negotiations are moving in the wrong direction. In Sweden however, public support for the deal has increased and there is a wide consensus that continued efforts and negotiations can lead to a deal that will benefit the economies and the peoples in both the EU and the US. This article looks into Swedish society and its political traditions to explain why Swedes stands out in their support for a deal that so many are abandoning.

“A free trade agreement with the United States is important if we are to create a greater number of competitive jobs in Sweden. There are few tools that can genuinely increase the number of jobs – new progressive and comprehensive trade agreements are one such tool,” wrote the Minister for European Union Affairs and Trade, Ann Linde and the President of the Swedish Trade Union Confederation (LO), Karl-Petter Thorwaldsson in a co-authored opinion piece in Aftonbladet on 2 September. So while trade union leaders in the US and other EU countries are airing the sentiment that the TTIP negotiations are “on the wrong course”, in Sweden there is a solid unified support for the deal from the majority of the political spectrum and the trade unions. Sweden also stands out as the only country within the European Union where public support for TTIP has increased instead of declining during the past year and a half.

Monthly Policy Review

So why is it that as the political winds are blowing against free trade in both Europe and the US, and as more and more people feel that development is failing them, Sweden is asking for more? The arguments used to support the TTIP from trade unions and all political parties in the Riksdag, with the exemption of the Left Party, are easy to rationalize from an economic perspective, especially considering Sweden’s strong dependency on exports. The arguments are firstly that the deal would make it easier for Swedish businesses to penetrate the American market with their products, thereby allowing them to employ more people. Secondly that a harmonization of the regulatory frameworks would cut costs and stimulate trade, and finally that the agreement would further boost transatlantic investment. And to this note there is little opposition, not even from those that opposes TTIP. “We are not against free trade per se. We oppose the agreement as it is now designed since it constitutes a threat against our democracy, labour legislation and the environment,” says MEP, Malin Björk (V). And even the supporters believe that these considerations must be taken into account. When Commissioner for Trade, Cecilia Malmström, attended a conference on TTIP and Global Trade at Gothenburg University in March 2016 she stated that “because no economic transaction happens in a vacuum. Our principles and values are always at play.” And she recognised three sensitive areas to TTIP sceptics that needed to be addressed; the lack of transparency, how an integrated regulatory system may lower European standards on environment and consumer protection and social standards, and how investment protection may shift power from states to private corporations.

Also the TTIP-positive Swedish trade unions have caveats added to their support. In a policy document from 2014, that was adopted by the boards of the Swedish Confederation of Professional Associations (Saco), LO and the Swedish Confederation of Professional Employees, (TCO), the three trade unions outlined their position. The first of their five main standpoints was that trade unions in Sweden were in favour of free trade as a means to increase growth and employment. The other four were reservations stating that a future agreement could not have any adverse effects on workers, not to affect the political room for manoeuvre when it comes to fundamental political issues, not to restrict the political discretion on procurement on decisions regarding in what form an activity should be run, and finally that the negotiations should aim not to include an investor state dispute settlement (ISDS) mechanism in the agreement.

The Swedish way - a pragmatic approach to political issues

In conclusion, both supporters and opponents agree on the benefits of free trade and also that there are values at stake when negotiating a comprehensive agreement such as the TTIP. But while trade unions and some leaders in Europe are closing the door on TTIP and choosing to say no, Sweden and its trade unions have chosen to say ‘yes, but…’ to TTIP, an approach that Karl-Petter Thorwaldsson believes has given them ample opportunity to influence the content of TTIP. What is the reason for this divergent Swedish position? Could the explanation be found in Thorwaldsson’s statement that several European unions and also the American AFL/CIO are less positively inclined to free trade than their Swedish counterparts? Or that many of the TTIP negative unions are from large countries like Germany and France, countries that are less dependent on global trade than Sweden? Or could the explanation also be found in a Swedish political tradition that is characterised by compromises and adjustments to what is practically possible and useful? According to former Professor of Political Science at the University of Uppsala and Research Director at Centre for Business and Policy Studies (SNS), Olof Petersson, an important aspect of the Swedish decision-making culture is a strong emphasis on pragmatism, with Swedes adopting what is perceived as useful, and letting practical results guide their actions.

Cecilia Malmström presented very pragmatic arguments in numerical terms when speaking at the Conference at the Gothenburg University. She stated that at a global level, trade flows accounts for roughly 50 per cent of the world’s GDP. In Europe over 30 million people have jobs related to exports around the world, and the figure is roughly 900,000 jobs in Sweden, meaning that one in five Swedish employees are in export-oriented jobs. But it’s not just about exports. While imports represent competition for Swedish firms, they also offer opportunity. Over 70 per cent of the goods Sweden imports from outside the EU are used as components to produce Swedish products and services. 30 per cent of those goods are later exported. According to Malmström the importance of trade is likely to increase in the future and in this context she concludes that the economic future of Sweden is tied to the ability to keep trade flowing. And even though TTIP is just one among over 20 agreements with over 60 countries, TTIP has a special economic importance due to the scale of the transatlantic economic relationship. 5 million of those 30 million export jobs across the European Union are backed by sales in the US. The Swedish trade unions adhere to this utilitarian view of the deal believing it will increase trade between the two largest trading blocs in the world and thereby increase growth and employment.

Sweden stays in the game believing in the outcome

When it comes to the reservations to the deal, the pragmatic approach may also serve as an explanation to the Swedish official position and that of the trade unions. According to Persson a pragmatic tradition for decision-making puts emphasis on negotiations, problem solving and practical results. So while Swedish trade unions sided with other European unions in opposing the original proposal on the investor state dispute settlement (ISDS) mechanism in the TTIP, seeing it as imperative to safeguard labour rights and consumer and environmental protection, as well as the right of individual countries to legislate and organise public welfare without interference from foreign investors, they have chosen to continue to support on-going negotiations to create a deal that delivers more benefits than drawbacks to Swedish interests.

At the request of EU’s Chief TTIP Negotiator, Ignacio Garcia Bercero, LO, TCO and SACO submitted concrete proposals on formulations to safeguard union rights and determine that workers’ rights cannot be perceived to constitute a trade barrier. “This shows that a constructive standpoint gives possibilities to influence important issues,” commented Göran Arrius, President at SACO. When the European Commission later published their proposal for a chapter on trade and sustainable development, including labour and the environment, it contained several of the arguments formulated by the Swedish trade unions. It might also be in this Swedish practice of pragmatic problem-solving to reach useful outcomes that LO, The Confederation of Swedish Enterprise and the Government co-hosted a high-level conference to discuss TTIP, not only to aid the process and contribute to an open debate about the deal, but also as a means to give recommendations and thereby influence the process in the direction that Sweden thinks it should go.

The Swedish model means Swedes are more open to change

Another aspect of Swedish society that may contribute to the official and public positive stance towards TTIP is the well-developed safety net that Swedes benefit from. In their opinion piece in Aftonbladet, Ann Linde and Karl-Petter Thorwaldsson recognise the frustration among many EU and US citizens. If people’s experience of global trade and competition is that it likely will leave them unemployed, the rational response is to oppose that development. But, they argue, it is not global trade and the structural transformations in the economy that it brings that are the problem, but the lack of safety net and adequate welfare to help people adjust through unemployment insurance and education. In their view Sweden has proven that labour market transformations and social and income security can go hand in hand. Secure people, that trust their societies’ safety nets to help them overcome periods of adversity are more inclined to welcome change rather than fear it, helping to explain the positive Swedish public posture towards TTIP.

And this points to another characteristic of Swedish political tradition – strong international engagement; be that through an active role in the UN, the EU or through foreign aid and trade. Sweden believes that through an active role and participation on the international arena, they as a nation can not only benefit but contribute by exporting values on good practise to other parts of the world. Cecilia Malmström affirmed this view by saying, “But Sweden’s long policy of engaging with the world through trade has never been more important. It’s important for economic reasons and it’s important because trade policy is also a way to project European values onto the world stage.” This approach to use trade as a means to project values is put into paper in the document ‘Trade for All’ that is now a core objective of EU trade policy, according to Malmström.

Comment

Despite a growing opposition to TTIP there is still a majority of Europeans that support the deal, and in Sweden there is ample consensus that a transatlantic trade agreement would benefit Europe. But despite all the best intentions and efforts, not least from Commissioner Malmström, a deal seems more and more uncertain, at least in the near future. With focus on the agreement with Canada more imminently on the pipeline, a lack of concessions on key issues from both sides of the EU-US negotiating table, and the American presidential elections around the corner, Europe might need to look elsewhere for something to give a much needed push forward to the European economy for now.

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Adin Mezquida Slette is a journalist at Mundus News and a regular contributor to the Monthly Policy Review. She holds a Major in Urban Planning from the Department of Human Geography, Stockholm University. She has additional credits in political science and economy from the American University of Paris, Universidad de la República, Uruguay and Stockolm University. Adin has worked as a Political Advisor to a County Council Commissioner at the Stockholm County Council with regional planning as her area of expertise. The past 12 years she has spent abroad. 10 years in Singapore and now since two years in the UAE were she has been raising a family and pursuing several projects of personal interest always keeping alive a strong interest for politics, economy and the environment.