Ladies and Gentlemen,
This morning I met with President Bush. This is the first meeting between a Danish Prime Minister and President Bush – and I hope the personal relationship will prove to be valuable, both in further strengthening the ties between our two countries and when Denmark takes over the EU-Presidency on July 1.
Our conversation naturally focused on the ongoing war on terrorism and the fighting in Afghanistan. The President kindly acknowledged the Danish contribution to the operations in Afghanistan as he has done publicly in his speech on March 11.
I will tell you a big secret. The conversation with the President was very difficult. We had great pains in finding problems in our bilateral relationship. In fact there is not a single problem. Business relationships take place within a political framework. The better the political relationship the better the basis for trade. I am therefore happy to report to you today, that the bilateral relationship between Denmark and the US is better than it has been at any time since probably the Second World War.
Denmark is a close ally of the US in the fight against terrorism. Danish special forces are working side-by-side with the US troops and we are proud to be part of the successful Operation Enduring Freedom. In addition, we participate in the current peace keeping activities where Danish minesweeping teams right now are on the ground in Afghanistan.
We also work together in political and diplomatic efforts and on the financial front. And we cooperate on intelligence and law enforcement. The support to the US is deeply rooted in the Danish society, and since 9-11 spontaneous demonstrations of Danish empathy with the US people have been many and sincere.
I assured the President that the people of Denmark understand that we are in this for the long haul. We must foresee that the fight against terrorism will take many years. We will support, fully and wholeheartedly, the fight against international terrorism wherever it takes place.
- o -
It is a great privilege to meet with so many distinguished business executives here today.
Bilateral trade relations between Denmark and the US are excellent and developing continuously. In 2000 and again in 2001 Danish exports to the US grew by more than 20 percent. The US is now Denmark’s fourth largest export market and the biggest overall growth market. The positive trend is mainly based on growth within a few sectors. Exports of pharmaceutical products and windmills topped the lists last year. Fortunately also other significant export categories, such as food products, textiles, IT/telecommunications, environmental technologies and building materials have demonstrated increased sales.
The Danish exports of goods to the US are highly concentrated on industrial goods (approximately 80 percent), as the share of the agricultural sector has decreased significantly during the nineties. Exports of services to the US market are dominated by shipping, but other businesses are now entering this field and the prospects are promising.
Danish imports from the US grew by approximately 6 percent in 2001 after several years of stagnation or even negative growth.
I suppose these numbers come as no surprise to you, as it is your job to optimize them – and not just report them. And you did a great job! I acknowledge all your combined efforts to increase our bilateral trade – and make it a profitable one.
I would like to point out another very promising trend in the recent years, namely the significant growth in bilateral investment activities between Denmark and the US. Proportionally, the Danish investment activity in the US now exceeds that of the other EU countries. This is an important and encouraging development as direct investment often is the best and most efficient way to expand sales. Fortunately, US companies have also increased investments in Denmark to the benefit of both those companies and the Danish economy.
- o -
The US market is obviously attractive to Danish companies. But the Danish market also offers opportunities to US firms. Though a small market in numbers, Denmark has one of the most robust and competitive economies in Europe, a high average income and a dynamic business community. And you should not think of Denmark only in terms of the size of the domestic market, but rather as a gateway to opportunities in Scandinavia and markets in Northern and Eastern Europe. Sweden and Finland have joined the European Union, and together with Norway and Denmark, the Nordic countries have become the most wired, dynamic and richest region in Europe.
As of July 1 I will be heading the European Union – a huge task, but fortunately a very challenging one, and one Denmark has prepared well for. During the Danish EU-Presidency we hope to conclude accession negotiations with the 10 new member countries, and in a foreseeable future Europe will have 25 members. With 10 new members EU will consist of more than 500 million people and be the world’s largest economy.
I would argue that it is easier to do business in Europe out of a small and outward looking country like Denmark than from a large country, which tends to be less open and more inward looking.
As the economy in general improved and the business climate became more and more competitive, Denmark has indeed become increasingly attractive to foreign investors: in terms of Foreign Direct Investment in dollars, the trend is nevertheless very clear: Where OECD countries on average had a 3-fold growth in Foreign Direct Investment, we have had almost 10 times the amount in 1999 compared to 1996. There are more than 2,200 foreign owned companies in Denmark.
- o -
The healthy state of the Danish economy combined with the recent positive outlook for the US economy will hopefully create a climate for further investments and more trade. Just to give you an update on the situation back home allow me to highlight the following economic aspects:
The Danish economy is strong. It has managed fairly well through the international economic crisis. The government expects the economic growth to pick up this year and that growth rates will return to a level above 2% next year. Danish exports of goods and services rose by 7,5 per cent in 2001 compared to 2000, and although a decline set in during the autumn of 2001 the latest figures show that exports is now picking up again.
During the first 100 days of the new Danish government we have taken several initiatives to further strengthen the economy and creating a better business climate. The government places great emphasis on securing a strong and stable economy with low inflation and unemployment in order to create the best conditions for Danish enterprises and for foreign companies wishing to invest in Denmark.
In addition the new government pursues a strict policy of no tax rises of any kind, and I am happy to say that this policy has been implemented to the letter, while we at the same time have been able to allocate substantial new funds to the health and social sectors.
- o -
I would like to stress that the Bush Administration in general continues the strong traditional support for free trade.
In November last year the EU-US partnership was pivotal for the success of the launch of a new comprehensive WTO Round of free trade negotiations in Doha, Qatar. This was a significant common achievement that has strengthened the bilateral relationship over the Atlantic.
In the US-Danish relationship we note with appreciation that the Administration was forthcoming in overcoming the problems in connection with the foot and mouth disease early last year.
As we look a head for Danish EU Presidency a few trade issues are on the transatlantic agenda. These include most notably (1) the issue of steel where the President has imposed restrictions on foreign steel, (2) the US compliance with the so called FSC (Foreign Sales Corporations) ruling of WTO, and (3) the issue of access for genetically modified organisms (GMOs) to the European market.
Admittedly these are tough issues. However, I can assure you that the Danish Presidency will do what we can to seek to manage these issue through constructive dialogue to ensure that they do not adversely affect the transatlantic climate - since the EU and US have many other important endeavors to grapple with, such as the advancement of the new WTO Round, and the fight against terrorism.
- o -
I hope that both current and prospect members of the American-Danish Business Council know that their contributions to the commercial, cultural and personal exchange between our two countries are very important. The Danish Government is committed to free trade and to assisting in fulfilling the potential of your businesses.
As an economist I know that all trade is beneficial for all countries concerned. That means that we do not mind, if you increase your export to Denmark. In the end, it will generate Danish export to the US. I therefore welcome the establishment of the American-Danish Business Council, consisting of both Danish and American businessmen. Not only American companies present here today, but also the presence of Deputy Secretary Dam and Ambassador Bernstein is testimony to that.