Alexandra Pasternak-Jackson
CEO
Amcham Finland
Finland
alexandra@amcham.fi
Elsa Korpi
Policy Lead
Amcham Finland
Finland
elsa.korpi@amcham.fi
We trust our readers need few reminders of the crises that have faced the world over the past several years. In the long shadow of the Covid-19 pandemic, Europe is battling inflation reminiscent of the 1970s and fears of a new euro crisis. Ukraine’s invasion has sent shockwaves through the European Union and its partners, and stakeholders across the transatlantic community have rightly interpreted the war as a fight for the democratic values that unite us.
The $7.1 trillion transatlantic economy has been remarkably resilient through these challenges, and foreign affiliates are its foot soldiers. U.S. affiliates spent $31.6 billion on R&D in the EU in 2020, while European investments accounted for over half of total foreign U.S. R&D investments at $71.4 billion. In 2022, the U.S. emerged for the first time as Finland’s largest trading partner when factoring together trade, foreign direct investment (FDI), and foreign affiliate sales. Services trade between Finland and the U.S. has grown in the double-digits for three consecutive years, and Finland has more than doubled its net U.S. FDI inflows since the 1990s.
Multilateral institutions are essential to the future strength of the transatlantic partnership
Our shared economic resilience did not happen overnight: it was built through decades of legwork by diplomats, civil servants, and business leaders.
This fact highlights the concerning threats to the multilateral world order. Failing institutions and frustrations with them are leading to increased geoeconomic protectionism that Finland and other smaller EU member states simply cannot afford. Our economies depend on coalitions that bring in investments, create jobs, and drive innovation. Finnish companies show unprecedented interest in the U.S. market and the Biden administration’s industrial investments in particular.
Crucially, business depends on a predictable operating environment to continue innovating. The growing importance of the digital economy means that companies are reliant on harmonized regulations that make operating across jurisdictions possible. The future of our interconnected economies hence depends on strong multilateral policymaking.
Transatlantic centers of excellence can be our path to a new era in multilateralism
For Europe and the U.S. to emerge from these headwinds as an even stronger community, we support establishing transatlantic centers of excellence. First proposed by Mikael Wigell (FIIA), these centers bring together transatlantic capital and talent to solve some of the biggest problems of our time. Here, we outline a vision for three critical areas.
1. Industrial policy
A lack of coordination between governing bodies has shifted our attention from opportunities to mending reputational damages.
The Biden administration’s Inflation Reduction Act (IRA) is unfortunately a prime example. Rather than sharing the economic tools of statecraft, we have been left fearing an impending subsidy war. Had U.S. officials been able to discuss tax issues with EU policymakers in the IRA’s drafting stages, exceptions for the EU could have been baked in the same way they were for Canada and Mexico. Creating a recognized platform for future dialogue is essential.
2. Green transition
EU companies are already major investors in the U.S. energy sector, while U.S. companies are some of the largest purchasers of renewable energy in Europe. Both the IRA and the EU Green Deal have shown governments’ willingness to develop infrastructure and invest in the development of next-generation technologies.
Centers of excellence can combine these tailwinds with engineering capacity to solve pressing questions about alternate energy sources. The strategic management of Chinese competition is a further reason to invest in transatlantic coordination.
3. Digital health
Forty percent of the global datasphere will be in the health by 2025, and the industry valuation is projected to reach $550 billion by 2027. The proliferation of available genetic and health data, as well as ways to process it, hold significant potential for scientific innovation.
Efforts such as the Transatlantic Data Privacy Framework are therefore not just about privacy, although this is a critical concern. They are also about the ability of researchers to forge collaboration and develop the next generation of medical treatments. Moreover, working together on health innovation would guard against a future where these innovations and industry growth are weaponized against economic security. Health data is Finland’s crown jewel, and our government should seize this opportunity for transatlantic leadership.
Amcham Finland is a politically independent, non-governmental, and member-funded business organization supporting transatlantic business.