0n my own behalf and as a representative of the Finnish State, I wish to thank the organisers of this Chilean-Finnish economic seminar: the Society for Industrial Promotion (SOFOFA), the Santiago Chamber of Commerce and the Confederation of Finnish Industry and Employers, for the opportunity to speak at this important gathering. I appreciate the constructive attitude that your country's authorities have adopted to the arrangement of this seminar. It is gratifying and encouraging to see the Chilean public sector and the country's economic life represented by such a large and prestigious group.

Political and economic relations between Finland and Chile are good and free of problems. Since democracy consolidated itself, those relations have rapidly diversified. A contributory factor in this respect has been high-level visits, such as that of President Aylwin to Finland just under four years ago. He was accompanied by a large group of Chilean industrial leaders, and the contacts that they established then with Finnish companies laid the groundwork for an intensification of our economic cooperation.

In recent years, trade between Finland and Chile has been growing faster than between us and any other Latin American country; it doubled in 1991-93. Indeed, Chile ranks second among the Latin American countries in terms of the value of our trade with her; only Brazil surpasses her in that respect. Last year, Chile's exports to us Finland grew strongly and enabled you to achieve a surplus in your trade with us. The bulk of what we buy from you is copper ore and concentrates, whilst machinery and equipment account for a half of our exports to you. Yet, despite a positive overall trend, the level and composition of trade between us still far short of potential. This seminar is intended to help redress that by leading to diversification and growth in our trade.

Considerable growth in Finnish investment in Chile has been even more marked than the increase in visible trade between us. Finland was the third-biggest foreign investor in Chile in 1995, an impressive achievement for a country as small as ours. The biggest contribution was made by the mining company Outokumpu, which has been a steady investor in the Chilean copper mining sector, raising the technological level at operations like Zaldivar. Another significant Finnish investment is Cultor's fishmeal factory. These are good examples of Finnish industry's long-term commitment to Chile, which it is putting into practice by establishing production facilities here.

Accompanying me on this first - and therefore historic - state visit to Chile by a Finnish president is a very high-level and representative industrial and business delegation. That fact underscores the central importance of commercial interests in relations between our countries. It also indicates the Finns' growing interest in Chile'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 Chilean 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 Chile 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 the diversity of their 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, of which Chile is an associate member.

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.

As a member of the European Union, Finland is participating actively in the development of cooperation with the countries of Latin America. These relations have in recent times been accorded greater importance in Europe than was earlier the case. That is a result of your continent's increased political stability and the vigour with which democracy has rooted itself. A lengthy period of strong economic growth has helped foster democracy, whilst stability has enhanced the climate for economic development.

The EU wants to have a role in supporting this positive development in Latin America by strengthening the foundation of agreements on which its cooperation is based and intensifying our mutual dialogue. Its first interregional agreement was with MERCOSUR. To emphasise the long-term character of its good relations with Chile, the EU signed a new comprehensive cooperation agreement with your country last year. The ultimate goal is a political and economic union between the parties. In implementing the agreement, Finland will place emphasis on rapid liberalisation of trade, which would create new commercial opportunities for companies in both countries. We shall also try to avail of the financial and other instruments at the Union's disposal in its cooperation with Chile.

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.

Chile has coped exceptionally well in this climate of stiffening international competition. Your economy is in good shape and in your foreign trade you are not excessively dependent on any individual country or grouping of countries. A strong increase in foreign direct investment in recent years has given Chile an effective channel for transfers of advanced technology that benefits her own industrial sector. In that respect, your government's open investment policy has borne abundant fruit.

We in Finland understand quite well that here in Chile 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, especially in the form of 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.

The dynamism of the Chilean economy and your developing market have attracted the interest of growing numbers of Finnish companies. They can prove suitable cooperation partners for Chilean companies intent on raising their technological level and improving their international competitiveness.

Both the State and the private sector in Finland have traditionally channelled 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 Chilean 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 Chile'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. Because natural conditions are so similar in both of our countries, technology developed in either lends itself well to application in the other. That applies particularly to environmental technology; the sensitive high-latitude ecosystems to be found in both Finland and Chile require this technology to meet very special demands.

Forest products is a sector where the needs of your industry and the advanced technological expertise of Finnish companies match each other especially well. Finnish forest-related expertise can make a valuable contribution to the success of the ambitious modernisation programmes currently being implemented in the Chilean wood-processing 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. Finnish forest-related know-how is already pretty well acknowledged in Chile, which creates a good basis for increasing our cooperation with you.

Thanks to your rich mineral resources, mining plays an especially important role in the Chilean economy. Finnish mining companies have been involved in the development of this sector for many years, transferring technology, investing in production facilities and supplying machinery and equipment. Technology developed in Finland - such as a copper-smelting method - has been successfully employed in Chile. In turn, Finland imports considerable quantities of copper ore and concentrates from you. The potential of this traditional and mutually-beneficial cooperation is nowhere near exhausted.

Without good infrastructure, neither an economy nor its industrial sector stand on a sustainable foundation. That fact has been recognised also here in Chile, 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 including 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 Chile 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 Chile, and indeed considerably, is obvious. However, results will not happen by themselves nor without efforts being made. Finnish and Chilean 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 Chile 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.