|
Exporter's Guide to Scandinavia
Below you find a summary of the Exporter's Guide to the Scandinavian countries
Denmark, Norway and Sweden
Economic Policy
The Scandinavian countries are among the most internationalised countries in the world. The economies may be characterized as small and open economies. All countries are dependent on both imports and exports. All countries are today advanced, industrialized countries with high standards of living. The countries have a relatively even distribution of income and wealth and combines a free market economy with extensive social welfare services. Free competition is a basic principle.
International Trade
Denmark and Sweden are members of the European Union.
Sweden
Aided by peace and neutrality for the whole 20th century, Sweden has achieved an enviable standard of living under a mixed system of high-tech capitalism and extensive welfare benefits. It has a modern distribution system, excellent internal and external communications, and a skilled labor force. Timber, hydropower, and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Privately owned firms account for about 90% of industrial output, of which the engineering sector accounts for 50% of output and exports. Agriculture accounts for only 2% of GDP and of jobs. The government's commitment to fiscal discipline resulted in a substantial budgetary surplus in 2001, which was cut by more than half in 2002, due to the global economic slowdown, declining revenue, and increased spending. The Swedish central bank (the Riksbank) focuses on price stability with its inflation target of 2%. Growth remained sluggish in 2003, but picked up in 2004 and 2005. Presumably because of generous sicktime benefits, Swedish workers report in sick more often than other Europeans. On 14 September 2003, Swedish voters turned down entry into the euro system, concerned about the impact on democracy and sovereignty.
Denmark
This thoroughly modern market economy features high-tech agriculture, up-to-date small-scale and corporate industry, extensive government welfare measures, comfortable living standards, a stable currency, and high dependence on foreign trade. Denmark is a net exporter of food and energy and enjoys a comfortable balance of payments surplus. Government objectives include streamlining the bureaucracy and further privatization of state assets. The government has been successful in meeting, and even exceeding, the economic convergence criteria for participating in the third phase (a common European currency) of the European Economic and Monetary Union (EMU), but Denmark has decided not to join 12 other EU members in the euro; even so, the Danish krone remains pegged to the euro. Growth in 2005 was sluggish, yet above the scanty 0.3% of 2003. Because of high GDP per capita, welfare benefits, a low Gini index, and political stability, the Danish people enjoy living standards topped by no other nation. A major long-term issue will be the sharp decline in the ratio of workers to retirees.
Norway
Norway still outside the EU, enjoys many similar benifits from their membership within the European Free Trade Area EFTA .
The Norwegian economy is a prosperous bastion of welfare capitalism, featuring a combination of free market activity and government intervention. The government controls key areas, such as the vital petroleum sector (through large-scale state enterprises). The country is richly endowed with natural resources - petroleum, hydropower, fish, forests, and minerals - and is highly dependent on its oil production and international oil prices, with oil and gas accounting for one-third of exports. Only Saudi Arabia and Russia export more oil than Norway. Norway opted to stay out of the EU during a referendum in November 1994; nonetheless, it contributes sizably to the EU budget. The government has moved ahead with privatization. Norwegians worry about that time in the next two decades when the oil and gas will begin to run out; accordingly, Norway has been saving its oil-boosted budget surpluses in a Government Petroleum Fund, which is invested abroad and now is valued at more than $150 billion. After lackluster growth of 1% in 2002 and 0.5% in 2003, GDP growth picked up to 3.3% in 2004 and to 3.8% in 2005.
Customs
The EU Customs tariff, known as the combined nomenclature, CN, is based on the harmonized system, HS, with an addition of two digits. The CN is used for exporting and statistical purposes. To meet specific import regulations the EU makes use of the integrated customs tariff, TARIC, when importing from non-EU countries. TARIC contains over 20 000 subdivisions due to duties, quota, preferences and other import and export regulations. From Autumn 1999 TARIC is accessible on the Internet through the Swedish Customs (www.taric.tullverket.se).
The Scandinavian Business Culture
Most Scandinavian companies are used to dealing with foreign suppliers and exporters will find them skilled in international negotiations. Scandinavia has a tough and demanding market and a Scandinavian buyer will expect total commitment to prompt deliveries, exact number of items and 100% quality for all kind of products.
A potential exporter to Scandinavia has to consider two closely related problems: how to enter and how to stay in the market. The strategy has to be selected before market entry so as to avoid costly mistakes, which can limit further sales possibilities on the Scandinavian market in the future. There are several options open but each one entails particular consequences. If the option of establishing a subsidiary is excluded, this being a very costly solution, there are in principle two alternatives: selling to importers and wholesalers or selling through an agent. It is impossible to make a general recommendation about which approach to be chosen. Everything depends on the supplying and marketing capacity of the exporter, the product, and also very much on what profile the exporter wants to create on the Scandinavian market as well as how much control he desires and is able to obtain in the marketing process. Successful sales in Scandinavia are not only a matter of the activities of the cooperating importer or the agent. It is also necessary for the foreign exporter to be in close touch with the importer or agent in Sweden and to participate actively in sales promotion activities and other marketing efforts.
To enter the Scandinavian market successfully long-term planning should be undertaken by the exporter. This includes learning Scandinavian business culture and commercial practices. Supplier companies wanting to remain in the market must give high priority to increased market orientation in their activities.
Before entering into business connections buyers will require information on and/or investigate your companys production capability, quality control system, environmental issues, and product development capacity as well as its financial status. Exporters are advised to perform a similar investigation of the buying company. They will also ask for other services connected to the product, such as repairs, maintenance, and installation.
|