Finnish businesses may be paying hundreds of millions of euros in unnecessary tariffs due to their failure to fully utilise the trade agreements negotiated by the European Union, estimates Kai Mykkänen (NCP), the Minister of International Trade and Development.
“[The sum] does rise easily to hundreds of millions of euros,” he gauged in an interview with Uusi Suomi on Thursday.
“The utilisation of trade agreements by our strong sectors, especially the technology and engineering sector, has for some reason been unacceptably low. It means that both the businesses and us will have to take a look in the mirror.”
The European Commission examined the utilisation of trade agreements in a recent study. Finnish businesses, the study found, utilise the trade agreements at a rate of 80 per cent, roughly as regularly as the average business in the European Union. The utilisation rate, however, was higher for businesses not only in Denmark, Estonia and Sweden but also in Greece.
Mykkänen highlights that a particularly disappointing example of the issue is the trade agreement between the EU and South Korea.
“In general, 80 per cent is a reasonably good level, but unfortunately if you examine the significant trade agreement with South Korea, you’ll see that much fewer than half of the engineering companies exporting to South Korea have taken advantage of the reduced tariffs. I don’t think that’s a good enough result.”
“The tariffs for technology industry products are around 10–20 per cent, but they’d drop to zero with the trade agreement,” he says.
Mykkänen reminds that the businesses are not the only ones to blame. Finnish authorities, he admits, similarly have room for improvement in terms of informing businesses of the agreements and streamlining customs procedures. Businesses taking advantage of the agreements are often required to provide evidence of the origin of the products and services being exported, a task that can be cumbersome in an era when products are assembled from components manufactured all around the world.
“As we’re presumably among the leading information technology countries, we have to seriously consider making these procedures as straightforward as possible,” stresses Mykkänen.
Aleksi Teivainen – HT
Photo: Markku Ulander – Lehtikuva
Source: Uusi Suomi