Timo Vuori
Executive Vice President,
Finland Chamber of Commerce
Curtis Dubay
Senior Economist,
U.S. Chamber of Commerce, Washington, D.C.
Karol Mattila
Head of Government Affairs,
Nokia
Mike Klyszeiko
Director of Launchpad USA,
Amcham Finland
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Quick Key Points
- Finnish exports are in better shape now than in spring of 2020.
- Finland is heavily dependent on the single market.
- Now is the time to reactivate and reboot transatlantic relations.
- A significant opportunity for the transatlantic relationship is working together towards climate change and sustainability
- A focus on China will be a point of continuity between our past and current administration.
- The U.S. Chamber is very optimistic about where the economy is going for the rest of this year.
- Senior Economist Curtis Dubay believes that GDP will return to pre-shock level in mid 2021
- Karol Mattila of Nokia told us that the previous administration was good at easing regulations in the telecom sector and understood the importance of 5G by facilitating the rollout of spectrum.
Last week, members and public sector decision makers joined Amcham for our Annual U.S. Economic Briefing. Here are key takeaways from our main speakers and key partners:
Timo Vuori, Executive Vice President at the Finland Chamber of Commerce, delivered three core messages:
1. Finnish exports are in better shape now than in spring of 2020. Key challenges for Finnish exporters include the following:
- Lack of component parts for manufacturing
- Shipping containers are stuck in Chinese and other Asian ports during the pandemic
- Payments are late in some cases
- Financing issues
However, the main obstacle to smooth trade and future investment is uncertainty in Europe. This spring will be still be challenging, but Timo believes that we will see improvement as we go progress into 2021.
2. Finland is heavily dependent on the single market. 50% of exports are tied to the EU single market, however, the market isn’t always the EU; Most of the time it’s the U.S. or China. 3% of GDP relates to the U.S. market and U.S. trade. 250 Finnish companies have facilities in the U.S., and 600 U.S. companies have facilities here in Finland. A rapid economic recovery in America is very important to the Finnish business outlook.
3. Now is the time to reactivate and reboot transatlantic relations. There will not be a new Transatlantic Trade and Investment Partnership (TTIP) soon, but we can find common positions and shape global rules for business.
Timo told us, “If in a global world, the U.S.A. and Europe with similar Western values and democracies, if we cannot conclude on those global rules, then I may ask with whom we could agree on those.”
Garrett Workman, Director, European Affairs, U.S. Chamber of Commerce, made these key points:
1. Garrett said there is a “significant opportunity for the transatlantic relationship. A return to stability in the policy making environment. As far as the transatlantic relationship, we see that a significant opportunity to work together in a more coherent way is climate change and sustainability.”
2. He believes that we’ll see “a more active and engaged federal government in responding to the Covid-19 pandemic. Our new President will focus more on that on the federal level and in international engagement.”
3. “All roads still lead to China” A focus on China will be a point of continuity between our past and current administration. President Biden is very clear in his desire to work with China. There is a need for U.S.-E.U. cooperation to address China, yet there’s concern that Europe won’t be willing to address these issues head-on.
4. It is important to note how the digital economy, Digital Markets Act, Digital Services Act, and Digital Services Tax will be significant for the transatlantic relationship. The U.S. Chamber and Amcham Finland stand for the OECD solutions. There is a huge opportunity to cooperate on things like artificial intelligence, a lasting solution to Data Flows.
“The U.S. and E.U. agree on the destination, the challenge will be in implementation and making sure we get sustainable solutions to these challenges. E.U. proposal for “Trade and technology council”
Curtis Dubay, Senior Economist, U.S. Chamber of Commerce, touched on points related to employment and growth:
1. America lost lost 140,000 jobs in December. During the pandemic, America lost 23 million jobs and then added back 12 million jobs at a very quick pace.
2. There is good recovery for the goods production and manufacturing part of the economy, but the services part are still hit. Government restrictions on in-person services and travelling have put a damper on the services sector growth.
3. Curtis is “very optimistic about where the economy is going for the rest of this year.”
“If we can get past the virus faster, we’re set up for really robust growth this year, 5-6% GDP growth. We have a portion of the economy that has recovered, we have a huge portion that wants to get back to normal, and then we have all this money that the government is pumping into the economy to supercharge the economy. So I’m very optimistic about the second half of the year, but the virus is really what will determine how things go. Consumer confidence was scored at 101, now we’re at 80, and the ups and downs of consumer sentiment have really reflected the course and spread of the virus.”
4. He also believes that GDP will return to pre-shock level in mid 2021, saying, “I’m anticipating that we get back to the pre-pandemic size of our economy in March, 2021.”
Incomes have actually risen since before the pandemic. The reason is government support, an extra $600 a week until July, and after that $400. Income is actually 2% higher than pre-pandemic. If incomes are higher there is support for spending.
Also interesting, household savings have surged enormously. Why? People are being forward-looking, and people are spending less because of government restrictions and fewer options to spend during the pandemic. America is having a goods-based recovery. People are spending a more on goods rather than services. Services overall are near pre-pandemic levels, but they aren’t there yet. Drastic differences in types of services being bought.
5. Small business optimism has lowered recently because there is concern about regulation and taxes.
6. Curtis mentioned a few points on the Biden administration:
- There will likely be another relief package, but he does not see the $15 per hour federally-mandated minimum wage passing.
- The agenda will be heavy on the regulatory side, especially for financial services.
- “Biden administration will be better on trade because it won’t be as antagonistic. It will be a more friendly approach to trade.”
- The administration will also be more open on immigration. If it were not for the pandemic, immigration restrictions would have been very harmful to the economy.
- Democrats are in charge in title only. The margin, two votes, is extremely small. Keep this in mind regarding future economic policy.
Finally, we were joined by Karol Mattila, Head of Government Relations, Nokia, who updated us on the state of their business in the U.S. and globally:
1. Nokia was able to adapt to the Covid-19 environment quickly and without any disruption to its business, which has been quite busy during this time.
2. Nokia secures about 90% of the U.S. population with its secure networks. As such, Nokia employs approximately 10,000 people across 24 locations, two data centers and one R&D center in the U.S. Additionally, their U.S. supplier network employs about 40,000 people. Nokia has the largest footprint in the U.S. when compared to their main competitors.
3. The previous administration was good at easing regulations in the telecom sector and understood the importance of 5G by facilitating the rollout of spectrum. The hope is that the current government will continue with that approach.
4. One significant challenge for Nokia is having a main competitor which benefits greatly from strong state backing in the form of tax breaks, cheap resources, and financing. Mattila is happy that the U.S. is confronting this competitor, and he hopes they can build a consensus view towards this competitor and the market situation.
5. In January, Nokia was selected as the technology provider for the U.S. Cyber Security Center of Excellence.
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