International trade has the potential to reduce poverty in developing countries – Finland supports the integration of developing countries into the world economy by means of trade policy and development cooperation

Press release 323/2008
9 September, 2008

Many poor developing countries, especially in sub-Saharan Africa, are caught in the trap of one-sided production with a low degree of refinement, which has forced them to finance their basic needs, to an unbearable extent, through debt and development aid.

Minister for Foreign Trade and Development Paavo Väyrynen stressed the link between trade and development at a press conference held at the Ministry for Foreign Affairs on 9 September:

“Experience has shown that poverty can be eliminated most effectively by achieving favourable economic development. Developing countries that have opened their borders and integrated with the international economy have been the most successful in this. Economic growth raises people from poverty and generates income for the government’s poverty reduction programmes.

Trade must be promoted and development cooperation supporting trade must be carried out, first and foremost, between industrialised nations and developing countries, but trade and development cooperation taking place between developing countries are also growing in importance.”

Two Finnish policy papers on trade and development policy were made public at the press conference: “Development Cooperation Supporting Trade – Finland’s Action Plan (2008-2011)”; and “Finland’s Import Policy Objectives”.

Development cooperation supporting trade is ultimately a question of poverty reduction by improving the operational preconditions for private entrepreneurship and enterprise in developing countries. At the press conference, Minister Väyrynen emphasised that development cooperation supporting trade can strengthen the capacity of developing countries to negotiate trade agreements advantageous to themselves and to utilise them effectively, for instance, by reinforcing the economic competitiveness of developing countries.

Finland has played an active role in developing European Union policy in the scope of the international Aid for Trade initiative. The common EU Aid for Trade strategy drawn up at Finland’s initiative was approved in October 2007. “Development Cooperation Supporting Trade – Finland’s Action Plan (2008-2011)” is Finland’s programme for putting the common EU policy into practice.

Import policy is important both for developing countries and from the perspective of Finland and other EU Member States. Finland’s trade policy is open with regard to both import and export. Minister Väyrynen stressed that an open policy improves the Finnish industry’s possibilities to obtain production inputs economically from other parts of the world. Openness in imports thus also supports exports. In addition, consumers benefit from a wide range of selection and more efficient competition on the domestic market. Finland’s import policy emphasises facilitation of imports from developing countries by removing trade barriers – without forgetting, however, that industrialised countries account for the largest share of Finland’s imports.

Additional information: Päivi Nevala, Adviser to the Minister for Foreign Trade and Development, tel. +358 9 1605 6171