A Boeing-Saab partnership entered into almost five years ago has won a contract to produce the US Air Force’s next fleet of training aircraft. In an initial stage, the contract (valued at the equivalent of SEK 82 billion) is to supply 350 T-X aircraft to the service, but further purchases could push the order to over 1,000.
“It is a major accomplishment for our partnership with Boeing and our joint team, and I look forward to delivering the first trainer aircraft to the US Air Force,” said Håkan Buskhe, President and CEO of Saab, in a press release.
Saab has stated that more than 90 per cent of the aircraft will be made in America, supporting more than 17,000 jobs in 34 states.
The diplomatic row between China and Sweden over the three Chinese tourists removed from a Stockholm hostel has escalated. One week after their removal, public service broadcaster SVT aired a satirical news show in which it advised Chinese tourists how to avoid culture clashes. The clip has sparked uproar on Chinese social media and a strong response from Beijing.
Initially, SVT said it would not apologise for the sketch but on Wednesday SVT entertainment chief Thomas Hall apologised on his blog “to those individuals who were offended” by the programme.
China is now threatening a tourist boycott of Sweden and a number of Swedish companies, including IKEA, fear trade relations will deteriorate as a result of the show.
“China is an important market for us. Both in the sense that we have many stores in the country, but also because we have some production in China. We are aware of what has happened and are following events closely,” says Felix Östman, press spokesperson for IKEA Sweden.
Mats Harborn, chair of the European Chamber of Commerce in China, says tensions have worsened between the two countries as a result of the show, suggesting SVT has harmed Sweden’s interests.
Since coming to power, US President Donald Trump has effectively vetoed all appointments of judges to the World Trade Organisation’s Appellate Body, the instance that makes rulings on global trade disputes. The court is supposed to have seven judges but by the end of this month the number will be down to three – the minimum for the system to function.
Mr Trump has railed against the court, claiming the US always loses cases, but in fact the US has a substantial win rate when it takes complaints to the WTO. “The US appears to be of the view that the court is politicised and ineffective. But, there are studies that show the US has won 86 per cent of the cases it has taken to the court over the past 20 years,” says European Trade Commissioner Cecilia Malmström.
Describing the situation as grave, Cecilia Malmström tells Dagens Nyheter that discussions are being held on ways to strengthen the system, but the US has not responded.
US tariffs on a further USD 200 billion worth of Chinese goods took effect on Monday. China has retaliated with tariffs on USD 60 billion of US goods and accused Washington of trade bullying.
European Trade Commissioner Cecilia Malmström is critical of the tariffs, telling the newspaper Dagens Nyheter that China and other countries cannot be forced to change through the tariffs. “We must use the multilateral route instead. It might take a little longer, but it is the path we know …”
Nevertheless, Malmström largely shares US criticism of China and the way in which it subsidises state-owned companies, thereby distorting competition. The European Union is also critical of the way in which Beijing forces companies to share their technologies when investing in China.
The European Commission recently published its ideas for reforming the World Trade Organisation and later today Malmström will meet US Trade Representative Robert Lighthizer and Japanese Economy Minister Hiroshige Seko in New York to discuss possible reforms.
Sweden has once again faced criticism over the way in which it treats the Sami, this time from the Council of Europe’s Committee of Ministers. On 12 September, the Committee recommended Sweden to take immediate action to “increase and formalise opportunities for the Sami to participate in a meaningful and effective way in decision-making processes affecting them at municipal, county and national levels and ensure that the Sami can maintain and develop their culture whenever decisions are taken that affect areas inhabited traditionally by them”.
The criticism focuses primarily on the Sami’s lack on influence on authorities’ decisions regarding the exploitation of land in reindeer herding areas, says Swedish lawyer Marie B Hagsgård, a member of the Council of Europe’s expert group.
The European Commission has spoken out for raising climate targets, and higher targets are necessary for the EU to cut emissions in line with the Paris Agreement.
However, there are strong opposing voices. On Wednesday, Greenpeace published an internal document from Business Europe, a group of 40 national organisations including the Confederation of Swedish Enterprise (Svenskt Näringsliv).
In a discussion paper, it states that a higher ambition should be met with the “usual arguments”, which means that Europe should not lead the way and “compensate for others”.
Maria Sunér Fleming, from Svenskt Näringsliv, confirms they participated in an internal meeting at Business Europe. She says the most important thing now is to focus on the target of reducing emissions by at least 40 per cent.
Commenting on whether tougher targets are needed, she says, “I am afraid that would rather make it more difficult for the EU.”
On 29 March next year, the UK will leave the EU. There will be a transition period from 2020-2021 so that companies have time to adapt to the new regulations for trade between the EU and the UK.
However, if the partners fail to reach agreement, the Brits will be leaving without a transition period and trade will be carried out in accordance with the rules that apply for the World Trade Organisation (WTO). This could entail a shock for all small and medium-sized enterprises (SMEs) that trade with the UK.
Anneli Wengelin, from the National Board of Trade Sweden, says there is a lack of knowledge about Brexit. “Many take the easy trade between EU countries for granted. They cannot even conceive that there will be problems,” she says.
Using Statistics Sweden data, the board has worked out there are at least 7,000 Swedish SMEs that trade only with the current EU countries, including the UK. “For them, the costs will be relatively high. If you do not even know that you must make a customs declaration, then you have no idea what fees you have to pay and when they must be submitted,” she adds.
Profits after tax for state-owned companies fell by SEK 800 million to SEK 19.3 billion during the first half of the year, compared to the same period last year.
This is mainly due to losses by Telia Company’s sale of its holdings in Eurasia, according to the Ministry of Finance.
Turnover for the companies increased by 6.4 per cent and amounted to SEK 172.5 (162.2) billion. Return on equity was SEK 11.6 (8.2) per cent. The value of the state’s listed shareholdings increased by 11.4 per cent to SEK 67.1 billion.
There continues to be a lack of unity within the Riksbank. The central bank will raise the interest rate in December or February, according to the bank’s official forecast. However the six decision-makers within the Riksbank are more divided than ever.
SvD writes that the issue of raising the rate earlier could hang on Riksbank Governor Stefan Ingves in the end, if it remains the case that three are for and three against, and SvD hints that he could be on the way to support this. During the latest meeting of the monetary policy meeting, he commented, “If inflation and economic development follow the forecasts that are made in the draft of the monetary policy report, then it will soon be time to raise the interest rate.”
The krona strengthened after the minutes of the meeting were published.
During the first seven months of the year, 4,100 work permits were granted to non-EU citizens who want to work in professions that require graduates. During the same period in 2017, 3,600 were granted.
Indians dominate the university-educated labour migrants. Patrik Karlsson, labour market expert at the Confederation of Swedish Enterprise says that India is an attractive place from which to recruit as Indians are good at English and the country has many people educated at university level in areas that Swedish companies have difficulty finding staff, including the IT sector.
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