On my own behalf and as a representative of the Finnish State, I wish to thank the organisers of this Argentinean-Finnish economic seminar: the Federation of Argentinean Iundustry and the Confederation of Finnish Industry and Employers, for the opportunity to speak at this important gathering. It is gratifying and encouraging to see the Argentinean authorities and the country's economic life represented by such a large and prestigious group.

Relations between Finland and Argentina go back a long way. They began in 1918, when Argentina became one of the first countries to extend international recognition to Finland, which had become independent only six months earlier. The Finnish Legation opened in Buenos Aires in 1929 was our country's first diplomatic mission in the whole of Latin America. The arguments presented in favour of opening the mission were mainly commercial; one of our shipping lines had just inaugurated a new service to Argentina, which had been receiving Finnish immigrants since 1906. For several decades, merchant ships provided a bridge between our countries, bringing us a regular supply of grain and exotic products from Argentina.

The work of the present-day Finnish Embassy is also, and to a growing degree, concerned with promoting trade and economic ties and cooperation, because political relations between the countries are good and free of problems. Argentina is our third-biggest trading partner in South America, but trade between us does not yet come even close to its potential level. We must try to increase the proportionate share of high-technology products in the overall trade flows in both directions. That, and diversifying our bilateral trade generally, is one of the goals that this seminar is intended to achieve.

Accompanying me on this first - and therefore historic - state visit to Argentina by a Finnish president is a very high-level and representative industrial delegation. That fact underscores the central importance of commercial interests in relations between our countries. It also indicates the Finns' growing interest in Argentina's and Latin America's rapidly developing markets.

I am convinced that cooperation between the state authorities and the private sector will help make commercial and economic relations between our countries even closer. The purpose of this seminar is to make leading representatives of Argentinean economic life more aware of the high technological level of Finnish industry and of what we can offer to satisfy your needs. Correspondingly, the Finnish participants will learn more about the products and opportunities for cooperation that Argentina has to offer.

The international trade system has undergone major changes in recent years. Business has globalised rapidly, goods and services are produced in the locations that companies find the most advantageous options in the light of their overall interests. More and more, business flows are between companies and their subsidiaries or subcontractors. The importance of trade in services, investment and local establishment has grown, whereas tariffs are less and less a problem in the way of goods flows compared with non-tariff barriers and standards. All this underscores the need to strengthen the multilateral trade system and the set of norms that govern it.

The first ministerial conference of the World Trade Organisation in Singapore last December demonstrated the vitality of the WTO and its member countries' strong commitment to respecting collectively-adopted rules. As a staunch champion of free trade, Finland is generally satisfied with the results that the conference produced, and which naturally reflect the member countries' different levels of development and diverse interests.

Alongside globalisation, regional economic integration has been taking place at a rapid pace in several parts of the world. Finland herself joined the European Union at the beginning of 1995, and this is obviously our most important market region. The most successful example of integration in South America is MERCOSUR, within which Brazil, Argentina, Paraguay and Uruguay have formed a common market. In only a short period, MERCOSUR has become a regional power factor and locomotive of economic development.

In order for world trade to function smoothly, it is essential that regional integration projects be implemented in accordance with the rules of the multilateral trade system and in a manner that helps rather than hinders the functioning of the system. At the same time as they increase trade and other economic cooperation between the participating states, customs unions can generate trade flows also with outside countries without becoming discriminatory barriers. The welcome decision gradually to lower MERCOSUR's external tariffs is a good example of this.

From the perspective of outside states, MERCOSUR is greater than the sum of its parts. Together with South America's rapid economic development and opening of markets, it has strongly increased interest in the region and its commercial opportunities. The European Union and its member states signed a comprehensive cooperation agreement with MERCOSUR in December 1995. This is intended to achieve a gradual liberalisation of trade, and eventually free trade.

Finland was the first EU country to give this agreement national ratification. We intend to continue to participate actively in its implementation, especially with a view to liberalising trade between the parties within as brief a transition period as possible. Finnish industry sees MERCOSUR and our EU membership in general as providing companies with new commercial opportunities in South America.

Economic growth in Latin America has been quite rapid in the 1990s, and for the most part stable in comparison with the development in the previous decade. When the countries of the region have opened up their economies to international competition, they have had to carry through extensive structural changes in their industrial sectors at the same time. That in turn has enhanced their own companies' prospects of success both at home and abroad. South American countries are gradually adopting a more active role in world trade, a development that we greet with satisfaction.

Since the 1980s, Argentina has been systematically implementing an economic revitalisation programme, which has included liberalising trade by abolishing the licensing system and privatising industries. Growing foreign investment as a result of liberalisation of the laws regulating it offers Argentina an effective and direct channel for transfers of advanced technology to benefit her industrial sector. After a couple of difficult years, the economy now seems to have embarked on a new growth curve thanks to a strong surge in exports.

We in Finland understand quite well that here in Argentina the transition to the new market situation created by stiffer competition can not have been effected in every sector without difficulties. Our society has had the painful experience of similar adjustment difficulties, which have led to an intractable problem of high unemployment. I am, nevertheless, convinced that opening up markets and abolishing competition-distorting subsidies is, in the long run, the only sustainable way to make an economy healthy and bolster its international competitiveness.

Argentina's ambitious programmes, both ongoing and planned, to improve infrastructure and modernise industry have attracted the interest of Finnish companies. Although our companies are on average small in size, they can prove suitable cooperation partners for Argentinean industries intent on raising their technological level and improving their international competitiveness.

Both the State and the private sector in Finland have for many years been channelling considerable resources into high-standard basic and applied research and industrial development. This spending currently represents slightly over two per cent of GDP and the intention is to increase it to about three per cent by the end of the decade; that would be one of the highest figures of any industrial country. We regard the unbroken chain of innovation that links our universities, research institutes and industrial sector as a cornerstone of our national competitiveness. I believe that Finland's positive experience in this respect could provide a foundation for mutually-beneficial cooperation between authorities, research institutes and companies in our countries.

The Finnish government is encouraging companies to establish in other countries and transfer technology to them. Only in that way will they be able over the longer term to strengthen their position in potential markets. The Finnish Foreign Trade Association recently began implementing its new export-promotion strategy in Latin America. This has involved identifying the most promising markets in the region and within them the sectors that will be the foci of special efforts in the future.

It has been calculated that our best prospects for cooperation with Argentinean partners lie in the sectors in which we have traditionally possessed special expertise; these include forestry and forest products, mining, energy generation and distribution, telecommunications and transport. Because of their key role in building up efficient production infrastructure, the same sectors feature prominently in Argentina's development plans. They are sectors in which Finland possesses a lot of know-how and broad experience and, through a combination of both, can offer competitive products.

Forest products is a sector where the needs of your industry and the advanced technological expertise of Finnish companies match each other especially well. Flying over the northern parts of Argentina, I was able to see for myself what enormous forest resources you have. Finnish companies and experts have been involved in planning their exploitation on a rational and environmentally-friendly basis.

Finland has across-the-board expertise in the forest sector. An integral aspect of that expertise is comprehensive acceptance of responsibility for the environment in accordance with the principles of sustainable development. Since forests are the most important - indeed nearly the only - natural resource that we have in Finland, we have been accustomed for decades to taking good care of them. The need to protect our forests has forced our industry to develop technologies that both increase wood yields and lessen the burden on the environment. Thanks to that, we are today one of the world's leading manufacturers of machinery and equipment for the wood-processing industry. That creates a good basis for increasing our cooperation with Argentina.

Finland and Argentina both have important mining industries. Finnish mining companies have concentrated on creating better and more efficient production methods. The result is sophisticated and competitive technology, which has been exported to many countries including Argentina. An example of our fruitful cooperation in the mining sector is your country's biggest mining project, Bajo de Alumbrera at Catamarca. Half of the ore produced there will be sold to a Finnish company under a long-term agreement.

Without good infrastructure, neither an economy nor its industrial sector stand on a sustainable foundation. That fact has been recognised also here in Argentina, where safeguarding the supply of energy, dependable telecommunications networks and an efficient transport system have been designated as areas of development requiring large-scale investment. Difficult climatic conditions and the energy-intensive character of our industry have forced Finland to develop efficient energy-generation and distribution systems. Since, in addition to that, we have to import most of our fuels, we have always paid a lot of attention to getting the maximum amount of energy out of them and using it as economically as possible. The diversified character of our energy-generation sector gives us expertise and experience spanning a comprehensive range that includes everything from diesel generators that can be rapidly brought on line to very large power stations.

Efficient and dependable telecommunications systems are particularly important in a country like Argentina where distances are vast. In only a brief period mobile phones have revolutionised international telecommunications by becoming the everyday work and communication tools of first businesspersons and then ordinary people. One Finn in four nowadays has a mobile phone. Finland is a world leader in telecommunications-related research and industrial development.

Finland is particularly strongly positioned in the market for mobile phones, which is advancing by technological leaps and bounds and growing rapidly all over the world. In addition to manufacturing equipment and systems, Finnish companies have enjoyed success as network operators in several countries. Through the subcontracting work that it provides, the information technology sector has furthermore offered a lifeline to many small and medium enterprises struggling for survival.

Finland's high dependence on foreign trade and the difficulties that have had to be overcome to ensure dependable transport to and from our country have necessitated exceptionally efficient technology for materials handling in harbours and elsewhere. This enables cargoes to be handled swiftly and safely, using both labour and machines with optimal efficiency. Modern Finnish cargo-handling equipment is in service in nearly all of the world's major ports.

That opportunities exist to increase trade and economic cooperation between Finland and Argentina, and indeed considerably, is obvious. However, results will not happen by themselves nor without efforts being made. Finnish and Argentinean companies must learn to know each other's product palettes and strong points better and in that way be able to identify the most appropriate, mutually-beneficial forms of cooperation. That is why we are here today.

The task of governments and public authorities is to create the most auspicious framework and a level playing field for trade and investment. I can assure you that the governments of Finland and Argentina are cooperating well in this respect. Now the ball is in the court of industrial and business leaders; in other words, it is up to you.

Many thanks.