Heads up – Embassy 29 – December 2010

Tricks of the trade

If you want to learn the tricks of trade negotiations, you could do worse than ask Pekka Huhtaniemi, Finland’s new Ambassador to London and all-round trade guru.

The Ambassador began his career as a rookie trade diplomat back in the Tokyo Round in the 1970s when Nokia was famous for its rubber boots. Since then, he has been posted to Geneva twice – first in 1986 for the launch of the Uruguay Round, working with former Finnish Trade Minister and one of his predecessors in London, Pertti Salolainen, and again in 1998-2003, where he witnessed the abortive launch of the Seattle Round and later the Doha Round in the wake of 9/11.

In the intervening years, Nokia has transformed into a mobile telecoms giant with the most famous ringtone on the planet, and yet the Doha Round still rumbles on.

“I never seem to see the conclusion of trade rounds,” sighs Huhtaniemi who was absent for the Uruguay Round’s crowning achievement, the creation of the WTO, because from 1994-95 he was special adviser to Prime Minister Esko Aho, ‘Finland’s JFK’, whose youthful dynamism pulled the country out of the Cold War-era Soviet shadow into the warm embrace of the EU.

“The EU membership was a difficult dossier for the Prime Minister because his own party was largely against it,” explains the Ambassador. “That’s what I call leadership – when a politician is prepared to go against the mainstream of his own party in order to attain a broader national objective.”

After helping the Prime Minister secure a Finnish ‘yes’ vote in the EU accession referendum, Ambassador Huhtaniemi was sent to Brussels as the chef de cabinet of Finland’s first EU Commissioner, Erkki Liikanen (1995-1998), where he got an insider’s appreciation for the workings of the EU machine.

Then it was back to Geneva in 2003, followed by a brief bilateral stint in Oslo (2003-2005), before the Ambassador’s career compass inevitably swung back to trade issues when he was appointed Under Secretary of State for Trade (2006-10).

“I became heavily involved again with the Doha Round – and the dossiers were almost as unfinished as they were when I left Geneva!” he smiles ruefully.

This involved monthly meetings in Brussels with his EU counterparts on the Trade Policy Committee, where they kept a watchful eye on the mercurial EU Trade Commissioner, Peter Mandelson.

There were times when they were inches away from closing a deal on Doha, recalls the Ambassador, once in 2006 when Finland had the EU Presidency, and once in 2008, when disagreements between the US, India and China scuppered the deal.

For once the EU wasn’t the bad guy – thanks to the skilful negotiating of Lord Mandelson, says Huhtaniemi. “Of course Lord Mandelson had irritated some of his European ‘belles mères’ [EU jargon for interfering ‘mother-in-law’ member states] who felt that he had gone too far with his agricultural concessions,” smiles the Ambassador wryly. “But as an old GATT/WTO hand I could not help but admire how he negotiated the EU away from the danger zone. Mandelson himself admitted he was ‘skating on the outer edge of his mandate’. I don’t know if he can skate, but he can definitely spin.”

As far as prospects for the Doha Round are concerned, the Ambassador is very frank: “I cannot be very optimistic – the sticking points are between the US and the emerging economies and the EU cannot help them out of this impasse. This is rather serious because the longer the Doha Round drags on, the more countries will conclude bilateral or regional agreements and this will lead to a ‘spaghetti bowl’ of complicated rules for world trade.”

Now in the UK, the Ambassador plans to intensify his efforts to increase trade and investment between Finland and the UK. Finland’s prowess in mobile technology is well known, but the next big thing, according to the Ambassador, will be Finland’s clean tech industries.

Huhtaniemi will also take a keen interest in the UK’s efforts to sort out its ailing economy. In the early 1990s, Finland’s economy was in the doldrums, yet these days it tops competitiveness, innovation and transparency leagues. What is their trade secret? “Invest in education, research and technology,” answers the Ambassador.

Also occupying his attention will be the UK’s EU policy – Finland and the UK are natural allies when it comes to trade liberalization and EU enlargement. “I will also be watching to see how far the UK is willing to go on the road towards more commonly coordinated economic policies,” he adds.

Scotland – and its “Nordic” outlook – intrigues the Ambassador, who plans to spend time there and discover other parts of the UK. He’s already a member of the National Trust and has opened a Moomin exhibition in Manchester.