Call for Nordic co-operation in the global competition for jobs
“The combination of global political competition for jobs and protectionism represents a new challenge for Nordic co-operation. The governments need to work even more closely together to put a stop to the spread of the type of covert protectionism that would marginalise the Region in global competition for jobs,” Professor Lars Oxelheim writes in an opinion piece published in several Nordic newspapers.
Professor Lars Oxelheim, Lund University (Sweden) thinks that the combination of global crisis and protectionism represents a new challenge for Nordic co-operation. Photographer: Fredrik Eriksson
“The Nordic governments need to work together to make sure that the economic crisis is not allowed to usher in a milder interpretation of EU regulations on state subsidies. They also need to do more to identify and counteract covert protectionism and behaviour that can only be described as 'operating in the grey areas'.”
Oxelheim homed in on what he dubbed “declarations of industrial war”, referring to covert protectionism in the form of governments introducing measures to safeguard jobs in domestic automobile industries, insisting that protectionism makes a truly competitive market impossible, which in turn hampers industrial innovation and leads to production at locations where it is not justifed in terms of business economics.
The obvious long-term solution in the eyes of the economics professor is to generate a positive investment climate in the Region based on the most efficient production facilities possible. He does not think this on its own will be sufficent for small peripheral economies in the struggle for jobs in the wake of the crisis, however, and advocates that the Nordic governments help make the Region more visible as a potential investment target. One of his tangible proposals is for a joint Nordic body to promote investment in the Region.
“The governments should kickstart an Invest in the Nordic Region Agency as a means of making international investors aware of the Region as a whole,” he stresses.
Oxelheim also thinks that the global crisis, combined with covert protectionism, points towards the need for a counterpart to the World Trade Organisation (WTO), a global body empowered to impose sanctions if investment rules are breached.
“The Nordic governments have everything to gain if the struggle for knowledge-intensive jobs is conducted in an orderly manner, so they should exert joint pressure to establish such a body.”
Lars Oxelheim is a Professor at the Lund University and is associated with the Research Institute of Industrial Economics (IFN) in Stockholm and Fudan University in Shanghai, China. He also chairs the Swedish Network for European Studies in Economics and Business (SNEE).
