What do Finns think about Brexit?

At a press conference this week the Finnish Trade Minister, Mr. Ville Skinnari, and representatives from two large exporters that have significant trade with the UK discussed their positions on the existential threat of Brexit. 

They were not happy and all of them saw that the Brits are basically shooting themselves in the foot with three wasted years and more to come if they do end up leaving the EU!

The Trade Minister kicked things off by discussing the over-riding importance of the WTO in crisis. He pointed out that this is far more important than Brexit, and saw a bleak future ahead if things deteriorated as a result of the intransigence of the USA in refusing to name a WTO judge for dispute management.

He criticised roundly the US for their protectionist policies and their negative attitude towards the WTO. He emphasised that Finland believes in free trade from which Finns always benefit. 

He also pointed out that China does not play according to trade competition rules and sited many examples like state aid in various forms. He claimed that this is not a level playing field, and that we need the size and combined strength of the EU to meet this challenge.

On the other hand, he saw the existence of EU’s trade agreements as a silver lining, that gave some adequate protection to Finland and other EU members. 

New EU trade agreements as being planned with Singapore, Vietnam, Mexico, Chile, and Mercosur, while negotiations are ongoing with Indonesia, Australia, and New Zealand. 

On Brexit he said that the UK will certainly see significant economic costs that will hurt business and ordinary folk if and when Brexit becomes a reality, but the UK will continue to be an important partner for Finland and the EU, albeit smaller than before.

Ms. Minna Aila from Konecranes spoke about the four characteristics of trade:

  • Volatility (tariffs)
  • Uncertainty(WTO crisis)
  • Complexity (Trade Agreements – the EU has some 42!)
  • Ambiguity (Brexit)

The VUCA world (from the HBR 2914) and are poison for trade. All of these characteristics can be beaten with money and resources, even though this weakens resources… 

Her description of Brexit is that it is a terrible waste of money for Finnish companies, but cannot be avoided!

Mr. Marko Janhunen from UPM, Finland’s largest forestry company, spoke about the work and preparations that they have been working on for the last years with the Foreign Ministry.

Every year UPM sends 60 ships full of paper to the UK, and that will continue. He said that they have customers in 153 countries and they know how to handle custom declarations. The UK will just be one more country with border controls if Brexit happens. The company has spent years preparing any alternative solution and they expect to see that the UK will continue to be one of UPM’s biggest customers in history, whatever happens! 

The reason for that is because the forest area in the UK is just 13%, while 76% of Finland is covered in forests. There is almost no paper industry in UK and exports from the Nordics and Baltics will continue. The company already anticipates that there will be zero tariffs for UPM products after Brexit.

He could not put a cost on their preparations but they are significant!

Photo: Wikipedia Commons/ChiralJon

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