Economic Data
Total GDP: $175 billion
GDP Growth: 2.9%
Per Capita GDP: $19,700
Inflation: 2.0%
Unemployment Rate: 6.3% plus about 5% in training programs.
Trade Balance: $18.9 billion surplus
Trade with RI: Sweden is Rhode Island’s 7th largest export destination, with $37 million in exports in 1998.
Exports (U.S.$): $85.5 billion: machinery, motor vehicles, paper products, pulp and wood, iron and steel products, chemicals. Export trading partners: EU (55%), Norway (8%), U.S. (8%).
Imports (U.S.$): $66.6 billion: machinery, petroleum and petroleum products, chemicals, motor vehicles, foodstuffs, iron and steel, clothing. Import trading partners: EU (68%), Norway (8%), U.S. (6%).
Best Prospects for Export: Computer Services, Travel and Tourism, Computers and Peripherals, Computer Software, Telecommunication Services, Electronic Components, Medical Equipment, Aircraft and Parts, Automotive Parts and Accessories, and Telecommunications Equipment
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For more than two decades, Hodges Emblem and Badge of Portsmouth has literally had an award-winning relationship with some businesses in Sweden.
The 80-year-old company exports nearly $75,000 worth of award ribbons used primarily for cat and dog shows to Sweden every year. In fact, Rick Hodges, company president, said two-thirds of the company’s exports go to the Scandinavian country, with more than 48,000 ribbons shipped there in the last year.
”My dad started doing it about 20 years ago, and it has continued to be very successful for us,” he said.
The company, which moved its headquarters from Cambridge, Mass. to Portsmouth, Rhode Island in 1974, currently employs 100 workers in Rhode Island and another 50 at its plant just outside St. Louis, Missouri. As a catalog sales company, Hodges Badge sells ribbons, rosettes, medals, sashes, and buttons to equestrian and dog shows, education, drug awareness, sports and recreation, fairs and retail markets.
Facing a language barrier and a different time zone had proved extremely challenging for Hodges during its relationship with Swedish businesses. Hodges recalls one infamous order in which the company thought a pet show organizer ordered six cases of “lilac” ribbons. In fact what the organizer had said was the Swedish word for purple.
“We sent the cases over and when they arrived we got a phone call saying something was wrong,” Hodges said. “We redid the entire order, but from then on made sure we knew exactly what is ordered.”
Hodges credits the invention of the fax machine and e-mail with making the trade even easier.
”These things allow for specific details to be spelled out,” he said. “That in turn makes our job a lot easier.”
Still, he said one of the main obstacles the company has faced in the exporting process has been the shipping itself. He said that often award show organizers forget about the ribbons they’ll need, looking for delivery in less than a week, an expensive proposition.
“These things are very time sensitive,” he said. “And we try to accommodate even the last minute orders. We have even been know to drive to the airport and put them on a plane ourselves.”
Hodges said Sweden has been particularly important to the company’s export process because, like the United States, residents enjoy quite a few leisure activities that warrant award giving. Hodges said Sweden’s “developed economy” also makes it a good candidate for the company’s product.
”Awards are a very cultural thing,” he said. “For example we couldn’t sell ribbons in Britain because there they have paper plaques that they give out. And we couldn’t go in to countries that have serious economical problems, because quite frankly, they don’t have time for hobbies.”
Sweden
Location: Northern Europe, bordering the Baltic Sea, Gulf of Bothnia, Kattegat, and Skagerrak, between Finland and Norway.
Geographic Area: 449,964 sq. km, slightly larger than California.
Climate: Temperate in south with cold, cloudy winters and cool, partly cloudy summers, subarctic in north.
Main Cities: Stockholm (capital), Goteborg, Malmo, Norrkoping and Arlanda.
Population: 8,886,738 (1998)
Languages: Swedish, with small Lapp and Finnish-speaking minorities.
Time Zone: Greenwich Mean Time +1
Workweek: Monday-Friday, 40-hour week.
Type of Government: Constitutional monarchy, with a Prime Minister who appoints the cabinet.
Head of State: Prime Minister Goran Persson (since March 1996).
Currency: 1 Swedish krona (SKr) = 100 oere
Exchange Rate: Swedish krona (SKr) per US$1=7.82 krona (1999)
Economic and Political Conditions: Strong domestic consumer spending and exports fueled economic growth in 1999, with a 3.5 percent increase in GDP in the first three quarters. In the third quarter, GDP rose by 4.1 percent. Unemployment declined to 5.2 percent. Despite robust growth and high employment, inflation was subdued. Sweden has been prosperous and peaceful, with a capitalist economy offering significant welfare benefits to its citizens. Swedes face the challenges of their costly “cradle-to-grave” welfare state, unemployment, loss of competitive position in world markets, and uncertainty about their economic, political and administrative integration into Europe. Sweden declined to participate in the Euro regime at its launch on January 1, 1999.
Tarriffs, Trade,Taxes, Trademarks
Trade Regulations and Tariffs: After Sweden’s entry into the European Union (EU) on January 1, 1995, EU laws and regulations replaced Swedish customs laws. Sweden now applies the external EU tariffs to imports from the United States and other non-EU countries. The EU tariff schedule utilizes the Harmonized System (HS) code. Most industrial products are charged between 5 percent to 14 percent duty. Goods imported into Sweden are also subject to a value added tax (VAT). The general VAT rate is 25 percent with a lower VAT rate of 12 percent for food and certain services effective from 1996. Customs procedures, including the classification and valuation of imported goods, are governed by EU rules.
Taxation: Limited liability companies and branches of foreign corporations are taxed at the same 30 percent corporate tax rate. The Swedish corporate income tax presently includes liberal rules for depreciation of machinery and equipment.
Foreign Investment: Until the mid-1980’s Sweden’s attitudes toward direct investment from abroad were quite restrictive and governed by a complex system of laws and regulations. During the latter part of the decade, the effectiveness and desirability of controlling foreign direct investment (FDI) in Sweden were questioned. Such considerations, and Sweden’s present membership in the European Union (EU), have greatly improved the investment climate and attracted foreign investors to the country.
Free Trade Zones: There are free port facilities at Stockholm, Goteborg, Malmo, Norrkoping and Arlanda, where goods may enter without customs declaration or inspection. The facilities are municipal enterprises operated under the supervision of the Royal Board of Customs.
Trade Finance: The Swedish Government provides basic export promotion support, through its financing of the Swedish Trade Council, jointly with Swedish industry. Credit and foreign exchange risk exist in financing of foreign trade, although the latter can be avoided by quoting sales in dollars only. Prepayment and letters of credit entail the least risk for the exporter, but are not necessarily conducive to an increase in sales. After the exporter/importer relationship has been established, U.S. exporters should consider other trade credit terms.
Marketing and Selling Factors: Advertising plays a major role in Sweden’s commercial life. All types of media are available. Daily newspapers and other publications are by far the most important media, accounting for over half of all advertising expenditures. Direct mail is the second most important advertising medium, followed by radio and television commercials.
Patents/Trademarks/Copyrights: Swedish law generally provides adequate protection of all property rights, including intellectual property. As a member of the European Union, Sweden adheres to a series of multilateral conventions on industrial, intellectual, and commercial property. On January 1, 1995, Sweden signed the 1989 Madrid Protocol on the International Registration of Trademarks.
Key Contacts – Sweden
Rhode Island Export Assistance Center (RIEAC) and World Trade Center, Bryant College
Raymond W. Fogarty, Director
Edward Barr, World Trade Center Manager
Telephone: (401) 232-6407 or (401) 232-6408
Fax: (401) 232-6416
Rhode Island Economic Development Corporation (RIEDC)
Maureen Mezei, International Trade Director
Telephone: 222-2601, ext. 123 e-mail: mmezei@maildoc.gov
U.S. Small Business Administration
Marilyn Bogue, International Trade Officer
Telephone: 528-4585 e-mail: bogue@sba.gov
Embassy of Ireland
2234 Massachusetts Ave. N.W.
Washington, D.C. 20008
Telephone: (202) 462-3939 Fax: (202) 232-5993
Consulate General of Ireland
345 Park Ave.
New York, New York 10154-0037
Telephone: (212) 319-2555 Fax: (212) 980-9475
Country Profile
Compiled by Providence Business News,
in collaboration with Bryant College Export Assistance Center.
