Minister for Foreign Trade and Development Ville Tavio's speech at the 2025 annual meeting of Heads of Mission

"Finland is advancing the interests of Finland and Finnish businesses in a proactive and forward-looking way, also in the midst of ongoing changes."

Esteemed Ambassadors,

It is an honour and a pleasure to speak to you today. Since the Annual Meeting of Heads of Mission last year, our foreign policy environment has continued to undergo a rapid change. Issues related to international trade, technology and development have featured prominently in this change.

We are living in an era of geoeconomics, which is driven by the redistribution of economic power, technological transformation and pressure on the rules-based international system. The role of emerging economies has grown rapidly, while at the same time phenomena like the clean transition and digitalisation are permanently changing production and consumption practices.

In the midst of these changes, Finland is advancing the interests of Finland and Finnish businesses in a proactive and forward-looking way.

Dependencies in the global economy that were previously considered positive are increasingly seen as risky. Protectionism is on the rise and states aim to ensure their competitiveness in strategically important sectors through industrial policy. Customs policy is used to protect domestic industries from both opponents and allies. Export restrictions on high technology and critical raw materials disrupt global supply chains and the global economy is in danger of fragmenting into ever smaller blocs.

The situation is challenging for an export-dependent Finland, as the viability of our economy will continue to be founded on our ability to trade and operate as part of international value chains.

Finland and the EU have benefited from the rules-based system of international trade, which is now being challenged from different sides.

As the great power competition shapes the international system, it is important for Finland to ensure that our companies retain the opportunity to export, import and invest. It is also crucial to attract investments into Finland. Difficult times must not mean a general restriction on trade. On the contrary, we need more trade, trade liberalisation measures and international partnerships.

The transatlantic trade partnership and trade relations between the great powers in general have been under discussion in recent months. Finland’s consistent view is that, if anything, trade between allies should be increased and not restricted. That is why we are actively seeking new areas of cooperation to strengthen the transatlantic economic and technological base, with the EU also taking measures in the same direction. We must be ready to defend our own interests.

The political agreement on tariffs reached by the United States and the EU in July brings both good and bad news. It is good that the agreement offers a chance of temporary stability. What is less positive is the high tariff rate and the ongoing uncertainty about possible future tariff measures. As such, the situation is not desirable, and we must therefore actively aim to liberalise trade. We will continue to make an effort in further negotiations to ensure that Finland achieves a favourable outcome is achieved for sectors important to Finland.

In my view, economic growth and a well-functioning trade relationship are in the interests of both the EU and the United States. Disagreements reduce the weight of the EU and US in the global economy and undermine the ability to address identified problems, such as China’s overcapacity, barriers to entry, harmful dependencies or the trampling of intellectual property rights. We must seek common solutions to common challenges.

At the same time, we must intensify cooperation within the EU to respond to the growing risks to the global economy. The EU must make a more vigorous effort to reform its internal market and improve its competitiveness – it is Finland’s most important export market, after all.

Through new partnerships with countries outside the EU, we can contribute to diversifying our external economic relations and support the market access and risk management of Finnish companies. Finland supports the prompt implementation of the Mercosur agreement between the EU and Argentina, Brazil, Paraguay and Uruguay, as well as achieving new free trade agreements, for example with Australia, India and Indonesia.

Multilaterally, we cannot merely defend the rules-based system; instead, we must lead the way in reforming it. This is linked to cooperation with like-minded countries in the WTO, our closer G20 partnership and Finland chairing the OECD Ministerial Council Meeting next year.

Distinguished Heads of Mission,

There is an increasing connection between the economy and security. The work to promote export-led economic growth also contributes to security, resilience in society and the room for manoeuvre to make the necessary defence investments.

At the same time, we must ensure that economic dependencies cannot be used against us, that our critical skills and infrastructure are safe and that we are able to protect ourselves against economic pressure. Supporting our companies in identifying and managing these risks is an essential part of the work to promote economic security both in the Ministry and the missions abroad.

The defence industry is increasingly a key sector in Finland’s exports. NATO’s new defence spending targets open up opportunities for Finnish companies too. More broadly, there is a growing international interest in Finland’s concept for comprehensive security and solutions related to it. We will bring together relevant Finnish operators around a presentation concept on comprehensive security, which can be used when representing Finland abroad or receiving foreign guests here.

With the international market for defence growing, the outlook for Finland’s defence materiel exports appears promising. Now we have an excellent opportunity to invest in defence exports and new partnerships. For my part, I am prepared to support exports in the sector as well as related domestic investments as part of the cross-government cooperation between ministries and interest groups in the sector.

Distinguished country managers,

At its best, the work of Team Finland is seamless cooperation between different operators in export promotion, which together enable Finnish companies to succeed globally. With the integration of Business Finland’s foreign operations into the Foreign Service, export promotion will become a more important part of the work of the entire Foreign Service. However, this shift will not happen by itself but requires from all of us the readiness to reform and adopt new practices.

We will build an effective export promotion organisation where Finnish companies can find the services they need. This clarity and efficiency will be necessary for us in our task to support Finnish companies in global competition.

In the next few days, Minister of Economic Affairs Sakari Puisto and I will approve a new Team Finland strategy together. The strategy has been produced in close cooperation with business and industry, sectoral ministries and other government bodies.

Next year, the resources of the Team Finland network will be concentrated on markets with strategic importance to Finland, in accordance with the priorities of the strategy. The emphasis of the selections will be on bilateral relations, growth potential and economic security. It is important to prioritise so that we can be more effective.

As concerns Europe, I believe we should invest in our own neighbourhood: Sweden, Norway and Denmark, as well as the Baltic States. Other key European markets include Germany, France, the United Kingdom, Poland and Ukraine. Supporting the transatlantic goals of Finnish companies in the United States and Canada is important. In Asia, our primary focus will be on Japan, South Korea, India, Vietnam and China. With regard to other parts of the world, Finland will intensify its efforts in South Africa, Saudi Arabia and Brazil. These are growing economies with strategic importance to Finland. I also encourage taking a regional approach in our export promotion work.

Going forward, a more comprehensive range of business services will be available to companies in countries which Finland considers priority target countries. Nevertheless, our work to promote exports will continue in all countries and missions. Promoting Finnish exports must be the task of all employees of the Ministry for Foreign Affairs.

The integration process will be completed by the end of the year. I would like to thank the staff of the Ministry for Foreign Affairs and Business Finland for their patience and collaboration. I would also like to express my gratitude to the Ministry of Economic Affairs and Employment for cooperating with us on the reform.

Now is the time to look ahead and extend a warm welcome to our new colleagues transferring to the Ministry for Foreign Affairs and missions on 1 January 2026. Their expertise and networks will make it possible to develop the Ministry’s business services and provide these services based on the one-stop-shop principle both in Helsinki and abroad. This is what companies have asked of us and what we have promised them. We will continue to listen carefully to companies about their hopes and needs while we renew our business services to make them more efficient and impactful.

We are implementing a historic reform of export promotion. This change will create new opportunities for the Foreign Service, but at the same time considerably increase its responsibility for promoting Finland’s economic wellbeing. Both the Ministry and the missions must respond to this challenge. As country managers, you play a key role in this.

Esteemed Ambassadors,

We are at a pivotal moment in the evolution of development policy. This is not merely about isolated reforms or shifts in priorities; this is a time when the very paradigm of development policy is undergoing a fundamental transformation. Finland has played, and will continue to play, an active international role in shaping this change.

For years, development policy has addressed complex global challenges and helped find solutions for sustainable development. Yet, some parts of the world are still falling behind on Sustainable Development Goals such as gender equality and access to clean water.

The transformation of development policy is being driven by geopolitical shifts and a decline in development finance. However, we should remember that the amount of money spent is not the sole measure of effective development cooperation — the most important metric is impact.

The peak years of development finance are behind us. According to some estimates, funding levels will drop by nearly one third between 2023 and 2026. This downward trend is prompting structural reforms. In any event, it would be unrealistic to expect public sector donations alone to deliver the Sustainable Development Goals.

Notably, the United States has accounted for around 30 per cent of global development finance. According to current data, US development finance is expected to fall to less than half of previous levels next year. However, the US is also leaning more heavily into investment-based cooperation and significantly increasing resources for its own development finance institution. Alongside savings, the US is making choices about where to focus its efforts.

This broad shift in development finance is not solely due to cuts in US development cooperation budget; it reflects a wider trend among several countries, including Finland, to reduce spending. The prevailing international direction towards reforming development finance was clearly visible at the International Conference on Financing for Development, held in Seville in late June and early July. There, discussions focused heavily on strengthening domestic revenue bases in developing countries, engaging the private sector, and harnessing digitalisation. These are also key messages from Finland.

Even as global development finance declines, the need for international cooperation remains. Development finance can – and should – enable collaboration between commercial and other operators, in line with the spirit of Finland’s 2024 Report on International Economic Relations and Development Cooperation.

Finland continues to back development cooperation within the UN framework. We also endorse the UN’s comprehensive reform process currently underway. The UN must streamline its operations, eliminate overlaps, and improve efficiency to maintain credibility and deliver on its duties and core mandates.

Dear Ambassadors,

A central element of this policy transformation is linking trade with development finance. Finland has much to offer in this area, and I encourage you to take a bold and ambitious approach. Development finance should primarily be used as a catalyst to leverage private capital into economically viable investments. We aim to facilitate structural reforms, industrialisation, and access to international capital in our partner countries. At the same time, Finnish companies are actively involved in business operations. This spring, we published Finland’s Development Policy Investment Strategy, which sharpens the strategic use of our development finance.

Finland continues to champion democracy, the rule of law, human rights, gender equality and non-discrimination. We also continue to deliver life-saving humanitarian assistance.

Finland’s development cooperation is conditional on adherence to a rules-based order and the willingness to receive returning nationals. We do not engage in bilateral development cooperation with governments that support Russia’s war of aggression.

For example, Finland’s country programme for development cooperation with Somalia was suspended due to insufficient progress on returns. This illustrates the Finnish Government’s commitment to improving return policies. I think it is fair that an administration unwilling to receive its own citizens should not receive development finance. Finnish and Somali authorities are now in dialogue to improve cooperation on returns.

We cannot talk about Finland’s development policy without talking about Ukraine. Ukraine is, without question, Finland’s largest development finance partner. By international comparison, Finland stands among the strongest supporters of Ukraine. To date, Finland’s support for Ukraine totals EUR 3.8 billion. Of this, over EUR 1 billion has been allocated to development cooperation and humanitarian assistance, including more than EUR 700 million for the reception of Ukrainians granted temporary protection.

As Minister, I have visited Ukraine twice and witnessed firsthand how vital it is to keep the wheels of Ukraine’s economy turning, even in wartime. This brings hope to the country. Ukraine needs jobs, skilled professionals, investment and tax revenue. Russia’s war of aggression has created extensive needs across different sectors.

This parliamentary term, Finland has drawn up its own national plan for contributing to Ukraine’s reconstruction. For businesses, reconstruction presents a significant commercial opportunity and aligns with both Finland’s and Ukraine’s goals for developing the country. Companies have a special role to play in delivering European solutions. Last spring, we were pleased to learn that two Finnish companies — Hesburger and Peikko — made the first Finnish industrial investments in Ukraine since Russia’s full-scale invasion began.

Finland funds instruments that support the private sector and projects involving Finnish companies, particularly when Ukraine’s public sector is making investments. The new blended finance instrument, the Finland-Ukraine Investment Facility, has been very well received by both businesses and Ukraine’s public sector. The instrument can provide EUR 50 million in funding for supporting investment projects that Ukraine considers important. The first projects funded through this instrument are expected to begin implementation in the coming months.

I have also approved an additional EUR 8 million in funding for the Finnpartnership business partnership programme, spread over four years. Last year, Finnish companies submitted 48 applications to the programme for projects in Ukraine, a record number for a single country in one year. Finnfund’s capital has been increased by EUR 25 million as part of the reconstruction plan, and Finnvera has a EUR 50 million credit loss provision for export guarantees to Ukraine. We are also boosting resources for export promotion at our mission in Kyiv.

Finland’s support for Ukraine spans multiple sectors from resilience and recovery to rule of law development, education, environmental and climate cooperation, and gender equality initiatives. This year, Finland and Ukraine launched the International Civil Defence Coalition, through which we are delivering both financial assistance and Finnish expertise in civil defence to Ukraine.

Dear colleagues,

We are contributing to the reform of the international development system both bilaterally and through multilateral forums, as part of the Nordic countries and the European Union. We engage in dialogue with our traditional partners and allies, as well as with countries of the Global South.

We are linking development cooperation with Finland’s economic interests. We stand up for Finnish jobs and entrepreneurship. One of our key goals is to grow Finland’s exports.

I hope these ideas and objectives will support you in the diverse environments where you work on behalf of Finland.

Our missions play a truly invaluable role in strengthening Finland’s international standing, deepening our bilateral and multilateral relations, and supporting our partner countries. Let me warmly thank each and every one of you for the work you have done over the past year. I look forward to working together to grow our trade and the development outcomes that come with it, both in Finland and around the world. Thank you.