Minister for Foreign Trade and Development Ville Tavio's speech at the 2024 annual meeting of Heads of Mission

Distinguished Heads of Mission, dear colleagues and friends,

When it comes to world politics, we are living in turbulent times. As pointed out in the recent Report on Finnish Foreign and Security Policy, Finland is conducting its foreign and security policy in a difficult environment that is not easy to predict. The international operating environment is characterised by growing strategic competition and changing power relations in global politics.

These changes have profound and permanent impacts on Finland’s foreign and security policy landscape. They also shape Finland’s advocacy work with regard to international economic relations and development policy.

Changes in the operating environment mean we have to examine our foreign policy through a more comprehensive lens than before. Economic and trade relations are closely linked to issues of geopolitics and security policy. Tensions between major powers are growing and technological competition is accelerating.

Control over technologies of strategic importance, such as artificial intelligence or quantum computing, has also been on the foreign policy agenda.  They are also essential for economic security. We have a great deal of expertise in these technologies and can thus make a significant contribution to world politics. Disruptive technologies play a key role in promoting the clean transition, creating sustainable economic growth and increasing productivity. Finnish companies that utilise these technologies also have a competitive advantage in international trade. At the same time, we have to be prepared for the security threats and potential for misuse that come with technological advances.

Today, trade policy and development policy are closely intertwined. This can especially be seen in the competition between great powers for influence over markets in developing countries. Businesses also increasingly need to look at their activities from the perspective of the strategic interests of states. This is essential when planning our foreign policy and exerting influence on the EU’s activities, especially in developing countries. This perspective also plays a key role in building our new export promotion service package for businesses.

Dear colleagues,

Changes in the operating environment mean that our trade, development and technology policies have to be more closely integrated into our foreign policy. Against this background, the Government adopted its first Report on International Economic Relations and Development Cooperation in July.

A key objective of the report is to bring trade and development even closer together. Developing countries are growing their share of the global economy, which makes them increasingly important trading partners for us. Finland supports the industrialisation of developing countries.

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An open and multilateral rules-based system is still the foundation of our trade policy. Finland will continue to play an active role in developing this system. That said, we cannot get bogged down in old solutions. The World Trade Organization WTO, which has played a key role in the success of Finland’s foreign trade and in removing trade barriers, and has lifted people out of poverty in developing countries, is now facing the worst crisis in its history.

There are several reasons for this: The United States, for a variety of reasons mainly related to domestic policy, has had difficulty making progress in liberalising trade and establishing new trade rules. The interests of different groups of countries have become increasingly distinct from one another, and geopolitical thinking has taken on a more significant role in trade policy positions alongside economic considerations. It is not surprising that the organisation’s consensus-based decision-making system no longer functions adequately under these circumstances.

We must continue our efforts to reform the WTO, but we also need new alliances and flexibility in the way we conclude trade agreements. At the same time, it is important to take advantage of all opportunities to develop bilateral cooperation with the United States, for example in harmonising trade regulation and harnessing the disruptive technologies I mentioned earlier.

Transatlantic cooperation is a key priority for us. The Trade and Technology Council (TTC), established in 2021, is the main forum for promoting the positive transatlantic agenda. The EU and the United States are currently negotiating an agreement on critical minerals. Promoting bilateral trade between Finland and the United States will further strengthen the transatlantic bond. In recent years, the United States has become a key trading partner for Finland. Finland and the United States have signed a bilateral agreement on scientific and technological cooperation, as well as letters of intent on cooperation in quantum technologies, nuclear energy and 6G. In addition, Finland has drawn up memoranda of understanding with several US states and cities, including a cooperation agreement signed in March with the City of Los Angeles.

In other relations with North America, we have continued to work closely with our key partner Canada, for example in the recently announced Finnish-US-Canadian Icebreaker Collaboration Effort, or ICE Pact. It is in Finland’s interest to deepen cooperation with Canada.

Finland’s NATO membership continuously opens up new opportunities for commercial cooperation.

We need to intensify our cooperation with like-minded partners such as Australia, New Zealand, South Korea and Japan.

When it comes to increasing exports and international trade, I consider it important to seek opportunities for trade and cooperation with countries other than our traditional partners. We are well-positioned to do this. Our international network, which includes 89 offices, supports businesses even in the most demanding markets. The EU has the world’s largest network of trade agreements, which we want to further develop, expand and promote in a way that is both flexible and pragmatic.

In this respect, I would especially like to see us turn our attention to countries and regions experiencing strong economic growth, such as Southeast Asia, India, Latin America and the Persian Gulf region.  Opening up export markets, boosting digital trade, setting standards and ensuring access to raw materials are important priorities for our businesses. We want to exert active influence in these areas in international forums.

Finland advocates for free trade on equal footing. At the same time, we want to be prepared for the growing risks of the global economy. We can best support Finland’s security of supply, ensure effective risk management for our businesses and promote the decentralisation of supply chains when we invest in wide-ranging partnerships and the liberalisation of trade.

To achieve these goals, our trade policy lobbying has to be strategic, proactive and effectively targeted. This is about more than just influencing EU trade policy. We also have to influence policies in the target countries. Our network of missions abroad plays a key role in this work. Our missions also support businesses in their export efforts by providing up-to-date information on the conditions, legislation and international demand in their host countries.  The network of diplomatic missions also helps businesses find solutions to trade barriers.

While we continue to develop trade with non-EU partners, we must also make sure that the EU’s single market develops in a sensible and business-friendly way. For many Finnish businesses, the EU’s single market is the first step towards internationalisation, which means it is especially important to make sure it functions effectively. 

State aid practices in the EU Member States must not jeopardise the functioning of the single market. In the future, the external dimension of trade measures must be taken better into account when discussing competitiveness and developing the single market. The single market does not operate in a vacuum. Products exported to EU countries often continue their journey in one form or another to markets outside the EU. A well-functioning single market also supports the activities of our businesses in other markets.

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As I mentioned earlier, critical technologies are increasingly associated with geopolitical tensions. A nation’s success in technological competition determines its economic success and also affects power relations in the global economy.

Finland has top expertise in new technologies in fields such as artificial intelligence, microelectronics, photonics and quantum technology. A competitive technology sector is a prerequisite for maintaining a high level of expertise both in Finland and throughout the EU. Given this, Finland should advocate for favourable conditions in the technology sector, such as fair international standards.

Our aim is to be more strategic and systematic in our approach to technology issues. This is why the Government decided to centralise technology issues at the Ministry for Foreign Affairs’ Department for International Trade in the reform of the Foreign Service. We will be defining more specific foreign policy priorities and areas of influence in technology issues in cooperation with other central government bodies and stakeholders.

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Rapid changes in the geopolitical climate also affect our export promotion work. Businesses need more support in boosting exports and expanding into new markets abroad.

We need to keep businesses up to date with sector-specific information on target markets, political risks, the development of the regulatory environment and international demand. In the current global situation, businesses increasingly need advice and information on sanctions and export control. Businesses may even need the Government’s support in their target countries at very short notice. In these situations, established contacts with decision-makers and businesses in those countries are especially important. The Government should help businesses solve market access problems and should advocate for a level playing field both nationally and through the EU.

It goes without saying that the Ministry for Foreign Affairs – the work you do – plays a key role in all this.

The Government is a strong proponent of Finnish work and entrepreneurship. We need to boost our exports so that we can finance the welfare state. We can’t live on borrowed money forever.  

Finland has to take a more strategic approach to export promotion than before. The decision to renew the Team Finland export promotion network addresses the need for strategic thinking. Business Finland’s foreign functions are being transferred to the Foreign Service where they will be part of Finland’s network of diplomatic missions abroad, meaning they will be led by you.

The main goal is to provide more effective and higher-quality services to Finnish businesses. To achieve this, we need to simplify the way the network is managed. A small country like Finland cannot have two overlapping export promotion networks abroad. A consistently managed international network makes it possible to maintain an up-to-date picture of export opportunities and a database of contacts that meet the real export promotion and investment needs of Finnish businesses through a one-stop shop.

Combining Business Finland’s foreign functions with the Foreign Service will be a major undertaking. The reform has also raised some questions. I would like to emphasise that we will do this work carefully. We will commission the necessary reports and consult with the personnel at the Ministry for Foreign Affairs and Business Finland at various stages of the reform.

It is in everyone’s interest for the reform to proceed smoothly and in a constructive spirit. Throughout the process, we will ensure that services provided to businesses are not disrupted, and we will implement the reform in cooperation with the business community.

The importance of export promotion in the work of Finnish missions abroad will increase even further with the reform, although financial and human resources are tight. The reform of the Team Finland network will also bring savings by reducing administrative costs, for example. According to the Ministry’s estimate, the savings gained will exceed the costs arising from the reform.

To enhance export promotion, the Team Finland network will focus its resources on markets of strategic importance to Finland. The selection of target countries will take into account a variety of factors affecting the success of Finnish businesses, such as bilateral relations, growth forecasts and potential in Finland’s areas of expertise, as well as impact on Finland’s security of supply.

It is of paramount importance that we focus our efforts on what matters most: where we and our businesses have the most opportunities and how we can best benefit from them.

A working group has been appointed to prepare the implementation of the Team Finland network reform. The working group will determine the best implementation model for integrating Business Finland’s foreign functions into the Foreign Service. The working group aims to complete its work in January 2025. The next step will be the implementation.

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Dear colleagues,

Finland has to make adjustments due to the weak state of general government finances. In an effort to improve the economic situation, it has also been necessary to make cuts to development cooperation appropriations. The Government initially agreed on adjustments of around EUR one billion to development cooperation, and additional savings of EUR 240 million were agreed on in the spring spending limits session for the remainder of the parliamentary term.

This Government has brought a necessary change of direction to development policy; the adjustments emphasise the need to utilise our limited resources as effectively as possible. At the same time, we need to be able to effectively identify the risks associated with the use of funds and minimise negative impacts.

In line with the Government Programme, we have focused our activities on partner countries that are essential for Finland and have limited the number of priority countries in development policy by eliminating certain country programmes. We have decided to discontinue our bilateral country programme cooperation with Afghanistan, Myanmar, Kenya and Mozambique in a controlled manner.

Civil society and Finnish non-governmental organisations play an important role in implementing Finland’s foreign and development policy objectives, and efforts have been made to support them over the past year; this is illustrated by the additional support granted to Finnish organisations in the spring session on spending limits. 

Finland is unwavering in its support for Ukraine. Support for Ukraine has not been cut; on the contrary, it has been increased. Ukraine needs support in a wide variety of areas, and we must be ready to respond to these needs both now and in the future. Development cooperation with Ukraine is also clearly linked to the security and wellbeing of Finland and the Finnish people.

In this spending limits period, the total budget for development cooperation and humanitarian aid for Ukraine will be EUR 290 million. In addition to that sum, we can also help Ukraine through other means alongside the new “Support to Ukraine” budget item.

The first part of the plan for the reconstruction of Ukraine published in December 2023 aims to improve the conditions for Finnish businesses to operate in Ukraine. Finland and Finnish businesses have a great deal of potential to support Ukraine both now and in the future, but concrete measures are needed to help businesses gain access to this market.

Businesses are interested in Ukraine, and this interest seems to be increasing further this year. By my decision, EUR 8 million in additional funding has been allocated to the Finnpartnership programme, to be divided over four years. Finnpartnership is supporting Finnish businesses in around 30 projects that are either currently under way or about to be launched in Ukraine. The projects are in a variety of sectors, including construction, ICT and the metal industry.

In connection with the Ukraine reconstruction plan, Finnfund’s capital was increased by EUR 25 million, which the company aims to invest in Ukraine by the end of 2025. Finnfund has already made progress in identifying potential targets.

Thanks to the reconstruction plan, Finnvera has begun granting export credit guarantees to Ukraine. Finnvera has a credit loss provision of EUR 50 million. We encourage Finnish businesses to get involved in projects channelled to reconstruction through international financial institutions.

This autumn, the Embassy of Finland in Kyiv will receive one Team Finland member and a new development cooperation expert. The first part of the Ukraine reconstruction is now being actively implemented, while the second part is being prepared at the Ministry.

Finland has also delivered more than 300 truckloads of material assistance to Ukraine through the EU’s Civil Protection Mechanism, and more assistance is regularly provided. This assistance comes in the form of donations, most of which are from Finnish businesses.

In supporting Ukraine, we have been able to respond to the country’s acute needs while also assisting with long-term development so it can be in even better shape than before. Relative to our size, we are among the top donors in our European and Nordic reference groups when it comes to development cooperation and humanitarian aid. We have been able to offer concrete support instruments specifically for the private sector. Along with our financial assistance, our unwavering political support to Ukraine, both in the UN and internationally, is highly appreciated by the Ukrainians.

Dear colleagues,

Finland’s development policy partnerships are based on equality and mutually beneficial relationships between countries. Respect for the international rules-based system is a cornerstone of equal partnership. Finland does not channel development cooperation funds to countries that support Russia’s aggression against Ukraine.

Readmission of countries’ own nationals is another key condition for development cooperation with Finland. New development cooperation projects are planned so that their implementation is linked to promoting effective and sustainable return solutions.

The Ministry for Foreign Affairs defines the objectives of development cooperation projects with regard to returns in cooperation with the Ministry of the Interior.  When it comes to migration issues, Finland plays an active role at the EU level and influences cooperation with third countries.

Finland has continued to provide humanitarian assistance to the most vulnerable people in line with the Government Programme. In humanitarian crises, Finland has focused especially on helping persons with disabilities. With regard to humanitarian assistance, I have placed particular emphasis on Ukraine and other major refugee crises. We have granted support to the Middle East, the crisis areas of Africa and the Sahel, Yemen and Afghanistan, for example. Finland channels its support through UN organisations, the International Red Cross and Finnish civil society organisations. Thanks to our core funding, our support can be directed quickly to those who need it the most.

Our development policy focuses on Finland’s strengths where we have good opportunities to support sustainable development. Finland’s clear strengths and priorities include promoting the rights of women and girls, education and climate action, and a regional emphasis on Ukraine. With the added value generated in these areas, Finland is best placed to support its partner countries and foster multilateral cooperation. Concrete examples of our work over the past year are a health sector project in Kenya, in which 20 maternity clinics are being outfitted with Finnish healthcare devices, and a meteorology project in Ethiopia, where Finnish technology is being used to make weather forecasts more accurate and improve preparedness.

We are also continuing our work to support a well-functioning democracy, the rule of law, human rights and a vibrant civil society, all of which are prerequisites for sustainable societal development.

As part of our efforts to advance the rights of women and girls and promote sexual and reproductive health and rights, Finland continues to provide significant support to the United Nations Population Fund UNFPA and to UN Women. We want to live in a world where the equality of women and girls is a reality.  Moving forward, we will also work to ensure that Finland’s core funding to organisations and its capitalisation to development finance institutions create political capital that Finland can realise in its development partner countries – not just at the headquarters of organisations or finance institutions. 

In the education sector, our goal is to intensify cooperation between members of the Team Finland network in order to strengthen education exports and expand into more markets. In addition, we will combine our practices in development cooperation and education exports and will promote multi-actor cooperation. Finland will also draw on lessons learned in spreading the success story of school meals. Finland is supporting the internationalisation of school meals through the School Meals Coalition, on which I also serve as a Global Champion.

As part of our work to implement international climate and environmental agreements, we need to promote Finnish businesses’ access to developing countries and make use of the range of development cooperation instruments available.

Finland is an active player and partner on the international stage, which opens up opportunities for Finnish businesses. I hope you all will invest even more in finding these opportunities. We need to do more, for example, to ensure access to financing from development finance institutions and UN procurements.

A key opportunity for businesses to move into emerging markets is through the EU Global Gateway strategy. Global Gateway is one way to address the fact that we cannot achieve the SDGs without funding from the private sector. We want to take advantage of these instruments offered by the EU and support the early access of Finnish businesses to the EU’s Global Gateway investment projects. Contacts with local EU delegations at the country level play a major role, as do our efforts to exert influence in Brussels. We have already taken initiative in this area and have been doing more to promote small and medium-sized enterprises’ access to Global Gateway funding.

In general, development cooperation funding should be used more strategically so that it can leverage private capital and make developing countries more attractive investment targets. Development policy promotes the creation of industries and jobs in developing countries. This is especially important as it helps strengthen developing countries’ revenue base. These measures correspond to what developing countries themselves are calling for: more trade and investment and less dependency on aid.

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Dear colleagues,

We all know the difficult situation facing Finland’s public finances. The Ministry for Foreign Affairs also needs to reform its activities to operate more efficiently than before. When resources are tight, it is even more important to prioritise our work effectively. I would therefore like to strongly encourage all of you to focus on your most important tasks. We must be prepared to give up certain tasks while also working to find new, lighter and more efficient practices. The Foreign Service reform offers a good impetus for this work, but it would be wise to keep this objective in mind at all times. It is our job to make sure that tax revenue is used responsibly and efficiently for the good of Finland.

When workloads are heavy and tasks are stressful, it is especially important to focus on employees’ wellbeing. We have to pay constant attention to professional development and ensure that employees are able to cope at work. In this vein, I encourage you to promote an open and constructive culture of dialogue.

Distinguished Heads of Mission,

I would like to thank you and everyone at the missions for your excellent work on behalf of Finland and Finnish businesses. I am delighted to be a member of such a committed and professional team.

During my trips, I have personally witnessed the dedication and expertise in our high-level diplomatic missions. I have had the privilege of taking part in carefully planned and executed trips. Thank you very much for that. Let’s continue this excellent cooperation!