Sweden’s half-term trade report card — it’s an A for effort
But Stockholm gets a C for delivery, with deals slow in coming.
The EU’s free traders had been salivating for years over the idea that arch-liberal Sweden would take over the Council seat.
But time flies and the halfway mark of the Swedish presidency is fast approaching, so POLITICO picks apart how Stockholm is shaping the EU’s trade landscape and what the Swedes have achieved (so far).
In short, Stockholm is on a mission to shift the conversation toward more open and free trade. But in their six-month stint, the thinking in Brussels is that the Swedes won’t deliver any game-changing wins.
To be fair, the keen bean Swedes face strong international headwinds: A return to Cold War-like great power politics and statist approaches worldwide are marking the end of a golden era for globalization and free trade.
Especially since Russia’s invasion of Ukraine, the U.S. has been trying to yank the EU to its side in its race against China. Transatlantic trade relations became even rowdier when, much to the Swedes’ chagrin, Washington revealed its plans for a spending spree on "Made in USA" green tech.
The show so far
Stockholm has sought to jolt the EU’s free-trade engine back to life, which is easier said than done, especially in the wake of France’s protectionist stint at the helm last year and with the liberal U.K. out of the bloc.
Sweden brought free trade back to the fore at the informal meeting of trade ministers earlier this month in Stockholm, asking them to discuss “EU trade relations and increased competitiveness” as the first agenda point. And, for the first time in years, trade was raised at the level of EU leaders during their March meeting. The Swedes are also proud of balancing out the EU’s increasingly active industrial policy with progress on the trade front.
One EU diplomat said they were “positively surprised” by how constructive the trade ministers’ conversation was, and another EU diplomat said that the pro-trade vibe is “music to my ears.”
But in practice, there isn’t much the Swedes can do to land new trade deals. After all, the European Commission is in the driver’s seat on policy, and negotiations take years — sometimes decades — meaning that a six-month presidency can only have so much effect on the overall picture.
“We have a tendency to really overestimate presidencies’ impact,” one EU diplomat said.
There will be a few nuggets for trade watchers to look out for as Stockholm wraps up its presidency over the next three months.
EU capitals are expected to sign off on the trade deal with New Zealand under the Swedish presidency, according to several EU diplomats. It’ll then be sent to the European Parliament for a final green light before the end of this year. Politically the EU-Kiwi deal is a piece of cake, with its stringent sustainability standards and small market size compared to the EU.
Brussels is only set to upgrade its existing trade deal with Mexico in the second half of this year, potentially during a joint summit. But the two sides could make a political announcement during the Swedish presidency before the EU-Latin American summit in July, according to people briefed on the negotiations.
Similarly, Stockholm might score a political win with Australia, as political momentum builds to push a deal over the finish line: European Commission President Ursula von der Leyen has made it a priority for the bloc, and the more climate-friendly government in Canberra is also keen to seal the pact to hedge against China’s growing influence.
The next round of talks in April could be the last before trade ministers tackle tricky issues like beef or data flows — so some trade diplomats think the two sides could announce the end of talks under the Swedish presidency, although we aren’t betting the farm on it.
Sweden has placed a strong focus on Ukraine and the war during its presidency, so the Council and Parliament are expected to give their thumbs-up to renew free-trade conditions for Ukrainian products by early June, when the current scheme runs out.
During the Swedish presidency, the EU also relaunched trade negotiations with Thailand. “On free-trade negotiations, everything that we had in the drawer, in the freezer, or whatever, we want to have it on the table," a Swedish diplomat said.
Out of reach
The Swedes will only manage so much, and they’re conscious, for instance, that landing the bloc’s controversial deal with the Mercosur countries of Brazil, Argentina, Uruguay and Paraguay won’t happen on their watch. Nevertheless, they’re diligently doing the legwork ahead of the upcoming Spanish presidency, which is hoping to reap the decades-long negotiations.
“We’re doing what we can to move it forward, we would love to conclude the negotiations during [our] presidency,” Swedish Trade Minister Johan Forssell said earlier this month, before adding, “Perhaps that is a bit too optimistic.”
And no one knows whether the Swedes will manage to wrap up intra-EU negotiations on new trade-related laws, like the revamp of the trade benefit system for poorer countries, dubbed the Generalized Scheme of Preferences (GSP), or the anti-coercion instrument — which Stockholm had opposed before putting on the presidency hat.
But all in all, the free traders are rejoicing: One EU diplomat said that their performance so far deserves a “10/10,” before adding that the high grade “comes with expectations.”
Barbara Moens and Camille Gijs contributed reporting.