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Mounting Challenges for the EU Eastern Partnership Baltic Sea Area d e c e m b e r 2 0 1 4 I S S U E n o . 6 lenita Toivakka The benefits and doubts of TTIP L i n a s L i n k e v i č i u s Sirpa Pietikäinen Road from Vilnius Baltic Sea area as to Riga – mounting the key player in challenges for the EU blue growth Eastern Partnership To receive a free copy, register at www.utu.fi/pei The Pan-European Institute publishes the Baltic Rim Economies (BRE) review which deals with the development of the Baltic Sea region. In the BRE review, public and corporate decision makers, representatives of Academia, as well as several other experts contribute to the discussion. Pan-European Institute ISSN 1459-9759 Editor-in-Chief | Kari Liuhto (responsible for writer invitations) Technical Editor | Saara Majuri University of Turku Turku School of Economics Pan-European Institute Rehtorinpellonkatu 3 FI-20500 TURKU, Finland Tel. +358 2 333 9567 www.utu.fi/pei 16.12.2014 Baltic Rim Economies ISSUE # 6 expert articles Lenita Toivakka 5 Kjell Nilsson, Stefanie Lange Scherbenske, Wielisława Warzywoda-Kruszyńska 34 The benefits and doubts of TTIP Aslı Tepecik Diş & Linus Rispling 20 “Investing in children” – a political Linas Linkevičius 6 Nordregio in the Baltic Sea Region slogan or a serious challenge for European societies? Road from Vilnius to Riga – mounting Kåre Storvik 21 challenges for the EU Eastern Nordic branding Vladimir Miklashevsky 35 Partnership Ukraine crisis accelerates rouble’s Annamari Arrakoski-Engardt 22 move into free float Sirpa Pietikäinen 7 Summer 2014 – a tale of two seas Baltic Sea area as the key player in Janis Berzins 36 Vincent F. VALENTINE 23 blue growth Russia and European security Maritime transport in the Baltic Sea Inese Vaidere 8 from a global perspective Liudas Zdanavicius 37 EU sanctions against Russia – the Impact of the Russian economic Sanna Sonninen 24 high price of indecisiveness sanctions on Lithuania Baltic Sea – the sea of information? Tibor Szanyi 9 Erik Jones 39 Kimmo Mäki 25 Possible effects of the Russian Russian sanctions and Russian Port of Helsinki on the move embargo on food taxes confidence Johanna Boijer-Svahnström 26 Christofer Fjellner 10 Toms Rostoks 40 Viking Line’s commitment to EU’s perpetual dance with Belarus Baltic security and NATO member- environmental work Heikki Autto 11 ship after Ukraine Marek Grzybowski 27 The European bio-economy grows Justyna Gotkowska 41 Knowledge transfer and international from the North Russian military activity against cooperation – Polish Maritime Sweden – short and long term Esko Lotvonen 12 Cluster and Gdynia Maritime perspective Rovaniemi – the Arctic capital of University experience Finland Viljar Veebel 42 Johanna Karhu 28 Will economic sanctions fulfil Baltic Felix H. Tschudi 13 Cooperation in marine environmental expectations in terms of Ukraine The Arctic Corridor – Arctic monitoring in the Baltic to support and Russia? infrastructure as catalyst for Nordic future policy needs resource development Dmitry A. Lanko 43 Desislava Dikova 29 Regional approach in Russian Erja Tikka 15 Entry mode choices of MNCs in the policy towards Estonia in the times EU Strategy for the Baltic Sea Baltic Sea region of sanctions Region, more commitment and Igor Gurkov 30 focus for better results Susanne Oxenstierna 44 New conditions, new motives and Future growth of the Russian Helena Lindberg 16 new modes of operations of economy? Meeting the challenges of trans- Western MNCs in Russia boundary flows through macro- Jeff Schubert 45 Esa Österberg 31 regional cooperation Moscow as an International Consequences of travelers’ alcohol Financial Center (IFC) Asta Mackeviciute 18 traffic between Finland and Estonia Solidarity – a burden, privilege or Yulia Vymyatnina 46 Juhana Aunesluoma 32 natural state? Eurasian Economic Union – a union The Baltic World – 25 years from the of conflicting political interests Bo Harald Tillberg 19 revolutions of 1989 Belarusian language and national Dmitry Gudimenko 47 Venelin Tsachevsky 33 identity – old challenges, new Russian double-headed eagle Casimir Ehrnrooth – the Finn who paradox – what will it bring to its Western made history partners and neighbors 3 www.utu.fi/pei 16.12.2014 Baltic Rim Economies ISSUE # 6 expert articles Alexander Sokolov, Oleg Karasev & Viktorija Cohen 54 Jury Ponomarev 59 Konstantin Vishnevskiy 49 Development of Kaliningrad region On the socio-economic situation in Foresight in Russia – modification scenario the Republic of Karelia Heidi Saario 50 Petri Vuorio 55 Ilya Shegelman 61 Economic cooperation of Turku Finland’s future position as a hub Clusters in the economy of a cross- region and St. Petersburg of Russian tourism border region and Finnish experience Denis Mustonen 51 IWONA M. BATYK & LYUDMILA W. SEMENOVA 56 Aleksei Vasilev & Pavel Shchukin 62 Russian cooperation of the City of Tourism development between Development of high-technology Helsinki border regions: Kaliningrad (Russia) manufacture of stamp-welded slide and Warmia–Mazury (Poland) and wedge gate valves for atomic, Juhani Wihanto 52 heat-power and gas-and-oil industries Office real estate market in St. Olga Petrova & Alexandra Petrova 57 Petersburg, Russia in 2014 “Main Stream” agency Elizaveta Ageeva 53 Olga Hannonen 58 Foreign investments in commercial Russian second home owner real estate in St. Petersburg – trick – friend or foe? or treat? 4 www.utu.fi/pei 16.12.2014 Baltic Rim Economies ISSUE # 6 Lenita Toivakka The benefits and doubts of TTIP Expert article • 1654 iberalising trade increases growth, reduces poverty and TTIP is an ample opportunity for the EU and the United States to strengthens employment. For a small, export-oriented coun- set high rules and standards in global trade for other countries to fol- try like Finland opening new markets is vital. low in order to gain benefits in return. Trade liberalization has been done mostly through the While, there are many benefits on TTIP, it is clear that many GATT and WTO trade rounds. As the conclusion of the Doha doubts still remain. Unfortunately those are often based on mislead- LDevelopment Round remains still unclear, regional and bilateral trade ing information. Usually we come across three concerns. agreements are needed to sustain economic growth. The European Firstly, TTIP and especially ISDS will narrow the national Union and the United States have tied several free trade agreements right to regulate and compromise democracy. with third countries. Also other countries and regional organizations It is worth noting that the right to regulate will remain solely are currently negotiating trade and investment arrangements. in democratic hands after TTIP. The European Parliament, the na- Consequently, a trade agreement between two of the world’s larg- tional parliaments and stakeholders are very much involved in the est economies is a natural development whole process. of this global trend. ISDS has been raised often as a The Transatlantic Trade and Invest- The Transatlantic source of worry. However, Finland already ment Partnership (TTIP) is one of the has over sixty bilateral investment trea- most important agreements in defining Trade and Investment ties, and all of these have an investment the future landscape of global trade. The settlement dispute mechanism. Finnish EU is the largest economy in the world Partnership (TTIP) is one companies have profited from these trea- with over 500 million citizens and the ties greatly over 35 years. The commis- United States the second largest with of the most important sion is currently analyzing the results of over 300 million. Together these two ac- a public hearing on TTIP. The results will count for around half the world GDP and agreements in defining define the possible need to revise it. for nearly a third of global trade flows. the future landscape of Secondly, TTIP will only benefit large The agreement is not only about trade. multinational companies. It will also enhance the strategic partner- global trade. Trade barriers place a comparatively ship of the EU and the United States. heavier burden on small firms, as those For Finland the United States is an have less resource to comply with regu- important trading partner and source of foreign direct investments. lations. With TTIP we can help SMEs by reducing regulatory burden. The USA is our third largest export destination in goods, and the larg- Closer regulatory cooperation between the USA and the EU has the est in services trade outside the EU. potential to generate significant cost savings. The European Commission has raised TTIP as one of its priori- This makes sense; in the EU and the USA, over 99 % of all busi- ties. At the end of September the seventh round of negotiations was nesses are SMEs. In the EU, two thirds of all jobs are in SMEs. In the concluded. Our goal is to speed up the negotiations after elections on USA, the figure is over 50 %. both sides of the Atlantic in order to finalize the agreement by the end Thirdly, the high European standards in environmental protection, of 2015. employer rights, or consumer safety will be lowered. It is essential that special attention is paid to openness and trans- Gladly, the agreement will not lower the current levels of protec- parency in the negotiations. The Ministry for Foreign Affairs (MFA) of tion for the environment, health, labor neither for the consumers. This Finland has arranged regular public hearings on TTIP. In addition the can be clearly read from the public negotiation mandate itself. By MFA’s and the Commission’s websites provide essential information completing TTIP high and sophisticated transatlantic standards will and updates on the topic. Our experts regularly engage in the public raise the level of environmental, health and safety standards around debate to provide most updated information. the world. The Commission ordered an independent report from the Centre for Economic Policy Research (CEPR). The study found that an ambi- tious deal would increase the European exports to United States by Lenita Toivakka 28 % and add an annual economic gain of 119 billion euros to whole Minister for European Affairs EU.
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