Exports can lead us out of the corona crisis

20 concrete proposals to strengthen Danish exports, Lessons to Ethiopia
Denmark is a small, open economy, which is heavily dependent on exports. 845,000 Danish jobs rely on exports. When our exports are hit, Denmark suffers. The resultant economic setback leads to fewer jobs and less money for welfare and education. Thus far, the corona crisis has affected 80,000 Danish export jobs – which have been either completely lost or temporarily suspended as employees have been sent home. It is obviously a very serious situation.
The corona crisis has disrupted access to its export markets, and global demand is falling dramatically as companies are slashing orders. In 2020, Danish companies expect a 13 per cent drop in exports equivalent to lost exports of around DKK 170 billion compared to 2019.
It needs to deal with these developments now. And need to prepare themselves so that they are ready to grasp new opportunities, as the world gradually reopens.
The Danish Parliament has already introduced several schemes to support Danish companies and their exports, but we need to ensure that they are constantly adjusted to match the developments on international markets and the needs of exporting companies.
But this is far from enough. They also need to increase their efforts to support existing export jobs and create new ones. Therefore, Danish confederation of industries (DI) proposes 20 concrete initiatives that can sustain Danish exports.
The first five proposals need to be initiated immediately. And to ensure the long-term sustainability and growth of Danish exports, it is proposing seven national proposals, five European proposals, and three global proposals.
The following five proposals should be introduced immediately to help maintain existing exports:
1. The Ministry of Foreign Affairs must make every conceivable effort to save Danish exports, thus enabling Danish companies to regain their feet on global markets again.
2. Business travels must be re-opened, starting with high priority destinations. Initially, there may be a need for financial support to support critically needed air routes.
3. Initiatives pertaining to tax, VAT, and customs payments to support exports, thus easing the liquidity situation here and now for companies.
4. Research and innovation are the very foundation of Danish exports. We, therefore, suggest several tax-related schemes that can support knowledge-intensive jobs, which Danish companies have invested heavily in.
5. The barriers in the European Single Market resulting from Corona virus response measures by EU member states must be identified and removed.
To ensure the long-term sustainability and growth of Danish exports as global markets gradually reopen, we need to introduce the following initiatives
6. A stronger focus on exports in the Danish advisory system. All parts of the system need to have a common focus on exports and a special focus on SMEs. Export strategies need to be drawn up and activities undertaken that focus on Danish strongholds, including energy efficiency.
7. Strengthened climate diplomacy to ensure that the EU climate goals are followed up by concrete action and investments in all member states. Furthermore, authorities and companies must collaborate to promote Danish climate and energy solutions globally.
8. The companies’ access to international finance schemes and export credits has already been improved during the crisis. However, there is also a need to improve the EKF export guarantee tools for engineering and consultancy tasks. Furthermore, the official financing support for fixed-rate loans – known as Commercial Interest Reference Rates (CIRRs) – should be restored.
9. Business development support to developing countries needs to be reinforced by introducing extra measures that can sustain liquidity for companies in Africa, and the establishment of a Challenge Fund to assist Danish companies with the development of solutions that can help alleviate the impact of the corona crisis in high-priority Danida countries.
10. Boost the branding and marketing of Danish strongholds within life science, food sector, creative professions, and green solutions such as energy and water. Additionally, efforts to get tourists to return to Denmark need to be intensified.
11. Danish companies’ e-commerce capabilities need to be strengthened, amongst others by allocating further resources to SMV:Digital, which through individual and targeted counselling helps Danish companies getting started with exports via digital channels.
12. Improved access to export-focused employees in SMEs through the establishment of a scheme whereby SMEs can receive assistance towards hiring an employee assigned to boosting the export activities of the company.
13. The European recovery plan needs to revive the European economy through focused investments in research, development, infrastructure, health, green and energy-efficient transition, and digital transformation. This will help to strengthen the competitiveness of the European economy in the long run.
14. The European Green Deal sets the framework for a sustainable recovery of Europe’s economy, by means of more investments in renewable energy production and energy efficiency of buildings and industry as well as better integration of various energy forms.
15. The Industrial policy of the EU must promote green transition and digital transformation, to speed up the development of new sustainable technologies, such as hydrogen technology, Carbon Capture and Storage as well as battery technologies. Additionally, a massive boost of digital investments is needed, including 5G, cybersecurity, and artificial intelligence. Furthermore, we need a European strategy for medicines with a strong representation by Denmark to be a key part hereof.
16. A strengthening of the European Single Market by means of a collective plan to improve and expand the internal market as regards goods, services, and labour.
17. The EU needs to bring its proactive trade policy back on track, by speeding up the ratification of trade agreements with Mercosur-countries and Mexico that have already been finalised, and by swiftly concluding trade and investment negotiations with New Zealand, Australia, and China before the end of 2020. Trade negotiations with the United States should be resumed in 2021.
18. A global trade agreement for personal protective equipment and medical devices within the framework of the WTO. Such an agreement should lead to the removal of tariffs, technical barriers, and export restrictions on equipment used for fighting pandemics such as COVID-19.
19. Swift conclusion of the current negotiations on a global agreement on e-commerce, which can ensure a global and transparent framework for digital business.
20. A global trade agreement on environmental and climate-friendly products and services. In this way, we can restart the global economy in a green manner. ( Source DI, June 2010).