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1994-05-02
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<text>
<title>
Finland: World Trade Outlook
</title>
<article>
<hdr>
World Trade Outlook 1992: Nordic Countries
U.S. Exports to Nordic Countries Await Upturn in Their Economies
</hdr>
<body>
<p>By James Devlin and Maryanne Lyons
</p>
<p>U.S. trade with the Nordic region is feeling the effects of the
economic downturn. U.S. exports to the region in 1991 rose only
1.4 percent, to $7.5 billion, the lowest growth in many years.
U.S. imports from the region declined 7.9 percent, narrowing
the U.S. trade deficit with the region to a long-time low of
$1.6 billion. The Nordic economies are sluggish. GDP declined
almost 1 percent in 1991 and is expected to remain flat in 1992,
a performance below the OECD average. Nordic economic
prosperity depends on exporting. Thus, an upturn will not come
until the economies of the region's major trading partners begin
to show improvement.
</p>
<p> Despite the economic slowdown, this highly industrialized
region has a sound economic base and an exceptionally high
standard of living. It is a market with excellent potential for
American suppliers. The favorable exchange rate is also
providing impetus for buying U.S. goods. There are opportunities
for the sale of industrial machinery, computers and related
equipment, electronic components, telecommunications equipment,
computer software, and industrial supplies.
</p>
<p> The five nations of the region--Denmark, Finland, Iceland,
Norway, and Sweden--have many commonalities, but each is a
separate market. U.S. exporters should look closely at each of
them. U.S. companies interested in doing business there should
contact the Commerce Department Desk Officers at (202) 482-3254
or 377-4414.
</p>
<p> Norway. Despite low economic growth, U.S. exports to Norway
reached a record level in 1991 of $1.5 billion, up 16.2 percent
over 1990. With weakness in Norway's demand for imports, U.S.
sales are not expected to grow substantially this year. Norway,
however, remains an excellent market for U.S.
</p>
<p>U.S. exports 1991--$1.5 billion U.S. imports 1991--$1.6
billion
</p>
<p>suppliers, importing a wide range of American products. When
business activity in the non-oil sectors improves, U.S. firms
should again make strong gains. The leading categories for U.S.
sales were aircraft and associated equipment, and equipment and
supplies for the offshore oil and gas industry.
</p>
<p> Norway's economy, with the exception of the oil and gas
industry, is stagnant. Real GDP, up 2.6 percent in 1991, would
have shown no growth without the strong performance of the oil
industry. Rising production and investment activity in the oil
sector should help boost GDP in 1992. Unemployment, already at
a record high of 9.3 percent, is expected to rise further this
year. Inflation has fallen to a record low of 2.4 percent. The
non-oil economy is not expected to improve until 1993. One
bright spot for Norway's economic future is the substantial
deals being negotiated for the long-term sale of natural gas to
the U.K. and the Continent.
</p>
<p> Some products with good sales potential are computers,
industrial process controls, medical equipment, computer
software, communications equipment, and electronic components.
Norway's offshore oil and gas industry continues to need U.S.
technology. To assist U.S. suppliers, the Commerce Department
will mount a pavilion at Norway's Offshore Northern Seas
Exhibition, Aug. 25-28.
</p>
<p> Sweden. U.S. exports to Sweden, off 3.4 percent in 1991,
reflected the slump in the Swedish economy, but were a
substantial $3.3 billion, almost 45 percent of U.S. sales to the
Nordic region. Sweden is a good market for U.S. industrial
equipment and technology.
</p>
<p>U.S. exports 1991--$3.3 billion U.S. imports 1991--$4.5
billion
</p>
<p> U.S. exports to Sweden this year are not likely to show much
growth until business activity picks up. When it does, U.S.
suppliers should be poised to take advantage of supplying the
needs of Swedish industry. Among the products which have good
potential in the Swedish market are telecommunications
equipment, computers and computer software, electronic
components, aircraft and related equipment, and medical
equipment. Sweden has relaxed restrictions in several areas
such as investments and telecommunication services, creating
new opportunities for U.S. business.
</p>
<p> Sweden's economy is in a deep downturn as real GDP declined
1.2 percent in 1991 and is not expected to show any growth until
1993. Industry is going through a period of adjustment.
Forecasts are that unemployment, now at 4 percent, might double
before showing any improvement. Even after an upturn, Sweden's
traditionally low unemployment rates are not expected to return
to their former levels. Despite these problems, Sweden's economy
is moving toward greater harmonization with the European
Community, which it hopes to join by 1995.
</p>
<p> Denmark. Due in large part to the weak economic performances
of its main trading partners--the Nordic countries, Germany,
and the United States--Denmark's economy is projected to
expand only about 2 percent in 1992, the same rate as last year.
The economy is generally in good shape. Inflation, at 2.6
percent, is the lowest in the OECD, and the trade and
balance-of-payments surpluses of the past two years are expected
to continue this year. Unemployment, however, was 10.6 percent
in 1991, and is expected to remain high in 1992.
</p>
<p>U.S. exports 1991--$1.6 billion U.S. imports 1991--$1.7
billion
</p>
<p> As the only Nordic member of the European Community, Denmark
will play a key role in the anticipated integration of Sweden
and Finland into the EC. The US&FCS at the U.S. Embassy in
Copenhagen encourages U.S. firms to consider Denmark as an
excellent entry market to the EC. Best prospects for U.S.
exports are for such high-tech goods and services as computers,
peripherals, and software; telecommunications equipment;
aircraft and parts; and oil and gas field machinery. Finland.
Finland is suffering through its worst recession since World War
II. GDP declined 6 percent in 1991, and flat or negative growth
is projected for 1992. Factors in the decline include weaknesses
in the economies of its trading partners and an abrupt end to
the trade agreement with the Soviet Union, which had been a
major market for Finnish ships and machinery. Unemployment has
risen to 9.8 percent and is expected to peak at 10 to 11 percent
later this year. Finland's current-account deficit, however, is
expected to fall this year, as exports grow moderately and
imports drop.
</p>
<p>U.S. exports 1991--$951 million U.S. imports 1991--$1.1
billion
</p>
<p> Finland applied for membership in the European Community in
March, a step which should lead to expansion of its trade with
West European countries.
</p>
<p> In spite of the recession, high-quality U.S. goods will
continue to find a market in Finland--particularly computers,
software and services, electronic components, laboratory and
scientific instruments, and pollution control equipment.
</p>
<p> Iceland. The recent cancellation of plans to build a new
aluminum plant in Iceland has reduced hopes that the country can
climb out of its five-year recession. GDP is expected to fall
about 3.5 percent this year, as world markets for aluminum,
ferrosilicon, and farmed fish remain poor. The trade deficit is
also likely to grow. Inflation in 1992 is forecast at a low 5
percent, but unemployment may reach 2.6 percent--a high rate
by Icelandic standards.
</p>
<p>U.S. exports 1991--$156 million U.S. imports 1991--$208
million
</p>
<p> Prospects for sales of some U.S. products are good. Most
goods in Iceland are imported, and American brands are well
regarded. U.S. exporters of telecommunications products and
services will benefit from a planned privatization of this
sector. Automobile parts and accessories are needed, as
Icelanders are keeping their cars longer. Consumer goods such as
foods, housewares, sporting goods, and toys are als