Statement by minister Väyrynen at EU-Russia Innovation Forum

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EU-Russia Innovation Forum
May 27th 2010, Lappeenranta, Finland
Keynote comment by Dr. Paavo Väyrynen
Minister for Foreign Trade and Development

Mr. Chairman, ladies and gentlemen,

It is a pleasure for me to address this important forum, which focuses on extremely important themes and has gathered a considerable number of first-class speakers and a well-informed audience.

Issues dealing with innovations certainly belong to the most important ones in today´s economic life. My comments will mainly deal with trade policy and modernization aspects of the Russian economy. I believe that it is necessary to pay serious attention to the larger framework in order to be able to create the right preconditions for successful innovation policies. I will also say a few words on project cooperation which offers good possibilities also as regards to innovations.

It is encouraging to see that the leadership of Russia has embarked on the very important task of modernizing the Russian economy. The objectives in this endeavour are ambitious and plans to achieve the goals are manifold. The production base of Russia is not very wide and the economy is mainly relying on trade in energy goods, raw materials and basic industrial commodities. This is illustrated by the fact that more than two thirds of Russian exports to the EU, which is Russia’s main trading partner, are made up of energy, raw materials and to a smaller degree of chemicals and some manufactured goods. Modernization and diversification of the Russian economy are not easy tasks to accomplish, but they are absolutely necessary and will inevitably bring substantial advantages to the economy and to the Russian people.
Russia has put a lot of emphasis on the renewal of its technical standards and on fostering innovation. To reap the full benefit of modernization and increasing amount of innovations there is a clear need to anchor reforms in a solid and reliable trade policy framework. That framework needs to be based on liberal market access for goods and services and commitment to the international trade rules.

Raw materials are rarely subject to high duties or restrictions at importation. As we know, however, Russia strongly wants to become an exporter of technologically more advanced products. Staying outside the WTO would become really problematic. Duties and trade barriers imposed on countries which are not in the WTO could become real obstacles for ambitions of modernization.

To succeed in the global economy of today and to become competitive, companies need to have free access to components and materials. They need also a well-functioning business environment, which is based on common, globally agreed rules and practices. Harmonization of technical standards is an important part of this, but it also entails the protection of intellectual property rights, a modern and efficient customs control system and a predictable judicial system.

I am convinced that Russia has the capacity and the technical knowledge to become a modern, innovative economy. At the same time, I would argue that this can only happen if Russia joins the global trading system like all the other major economies in the world. It is clearly in Russia’s own interest to join the WTO as soon as possible. That is also something that the EU and many other great trade partners are very much looking forward to.

Ladies and gentlemen,

Finland has been implementing a bilateral cooperation programme with Russia for almost 20 years., The the so called ”Neighbouring Area Cooperation Programme” was launched in 1992 on the basis of Finnish-Russian intergovernmental agreement and it has an annual budget of approximately 20 million euros. The funds are used to finance projects in a great variety of sectors mainly in the regions bordering Finland: That is Murmansk and Leningrad regions, the Republic of Karelia and the city of St. Petersburg, but also in some other regions in the North West Russia. The implementation of joint projects has opened many possibilities for modernization and development.

The aim of this Finnish-Russian cooperation has from the beginning been to support economic and social development and promote cooperation between economic actors, authorities and citizens across the borders. At the moment we develop our cooperation on a basis of an equal partnership and focus strongly on economic cooperation. Particular attention is being paid on supporting entrepreneurship and networking between small and medium-sized companies as well as on improving efficiency in logistics and border-crossing. Public-private partnerships are being increasingly used in the process of developing joint Finnish-Russian projects.

I would like to mention a few examples of our latest projects. In the innovation sector a new Finnish-Russian project has been launched to build a system for gathering and commercializing Russian innovations. The objective of the project is to offer Russian innovators new possibilities and tools for utilizing their ideas and inventions commercially and to establish in Finland new companies whose business is based on these innovations. The main actors in this project are Lappeenranta Innovation Oy from the Finnish side and European-Russian InnoParnership.

The aim of the project Green Cities is to develop concepts and practices supporting energy efficiency actions especially in existing building stock in St. Petersburg. New type of concepts will be used and tested in collaboration with Finnish and Russian partners in order to set up innovative energy efficiency services and in this way to create a basis for a new business concept . The goal of yet another very innovative Finnish-Russian project is to develop a concept for an ecoefficiently built suburb in St. Petersburg. This so called EcoGrad concept will cover practically speaking the entire value chain from development, construction and operations to renewal and disposal.

In a broader, regional scope, innovations are also in the core of the new Northern Dimension Partnerships. The Partnership on Transport and Logistics aims at facilitating international transport and border-crossing by promoting the use of techological innovations like telematics and electronic customs clearance.

I believe that cross-border cooperation on the external borders of the EU will play a significant role in promoting economic and social development in our regions. In parallel with Finnish-Russian bilateral neighbouring area cooperation three new cross-border cooperation programmes have started in the framework of European Neighbourhood and Partnership Instrument (ENPI CBC). For the first time, the regions on both sides of the EU borders have fully participated in the programming process and the establishment of the governing systems of the programmes, taking fully into account the needs and interests of the regions. Furthermore, for the first time, the co-financing will be based on an equal partnership.

Ladies and gentlemen,

I think it is evident that innovations have an important role in promoting economic well-being in Russia and in the EU and fostering economic cooperation between the two. My main message has been that Russia´s future accession to the WTO will be the most crucial single step promoting this cooperation to really make progress.

Thank you for your attention.