The Swedish Government is well prepared ahead of Brexit negotiations

To create as good conditions as possible ahead of the coming negotiations with the United Kingdom, the Government has so far tasked four expert agencies with analysing the consequences of Brexit in a few specific areas. On 14 March, it was the turn of the National Board of Trade to submit its report.

Picture of Ann Linde
“The assignments given to the expert agencies are very important, as the United Kingdom is a key trading partner for Sweden,” says Ms Linde. Photo: Kristian Pohl/Government Offices

On Tuesday 14 March, the National Board of Trade presented its report to Minister for EU Affairs and Trade Ann Linde. The report analyses possible alternative solutions for how trade in goods and services could be regulated post-Brexit.

"The assignments given to the expert agencies are very important, as the United Kingdom is a key trading partner for Sweden. Recent figures from 2016 show that Sweden exports goods to the UK worth SEK 72 billion. Brexit can therefore have a major economic impact on Swedish trade," says Ms Linde.

The report notes that the internal market serves Swedish trade well. But the withdrawal of the UK from the internal market will mean that trade with the UK in both goods and services will become more expensive and more difficult. For example, there may be requirements concerning declarations and customs controls for goods.

The report identifies possible measures and solutions to mitigate the negative impact of Brexit on trade in goods, for example the UK being exempt from providing advance notification of cargo being shipped to the EU.

But the report clearly shows that a future free trade agreement with the UK, even in its most ambitious form, will not offer the same advantages as trade within the internal market does. This confirms the internal market's importance for growth and economic development.

"The chances of simplifying customs procedures for countries that leave the customs union are small and the risk of extensive administrative burdens and complicated trade procedures is imminent. However, trade in services is not affected by customs and rules of origin, but here it is the risk of national regulations and requirements that is the concern," says Ms Linde.

The reports' combined analyses and recommendations will be included in the Government's analysis material and form the basis of a well-balanced Swedish negotiation position ahead of the coming Brexit negotiations.

About the reports
The first Brexit report that was presented came from Business Sweden in December 2016. It identified Sweden's investment opportunities as a result of the United Kingdom's withdrawal. In February 2017, the Swedish Institute for European Policy Studies presented a report analysing how a withdrawal would affect the EU institutions and which new cooperation patterns would emerge in the Council of the European Union. These three reports were all initiated by Minister for EU Affairs and Trade Ann Linde.

Some of the conclusions in Business Sweden's report are that companies appear to be adopting a wait-and-see policy with regard to major investments in the UK at the moment, and that a large majority of companies believe that Brexit will weaken London's position as an international business and finance centre. Another conclusion is that Sweden is too much of a periphery market to automatically attract new foreign investments when companies relocate their operations.

The proposed measures include strengthening marketing vis-à-vis foreign companies and communicating the advantages of running operations in Sweden. Other proposals are to strengthen investment promotion in sectors with a high level of Swedish competitiveness, such as IT, telecoms and life sciences, and to make a concerted effort to ensure that the European Medicines Agency (EMA) is relocated to Sweden.

The main conclusion of the report from the Swedish Institute for European Policy Studies is that the UK has had an impact on the development of the EU, not least in areas that are important for Sweden in EU cooperation.

For Sweden, therefore, this means that Brexit will be a particularly major challenge. Sweden needs to adapt its EU work to the new circumstances to ensure future influence in the EU, both in day-to-day negotiations and in issues of more long-term importance. Efforts to improve cooperation with other Member States therefore need to be further enhanced.

In May 2017, the Swedish Research Council and the Swedish Agency for Innovation Systems will also present their reports, which analyse what a withdrawal will mean for Swedish and European innovation and research cooperation with the UK, and more reports are expected in many more areas.