Working group proposes G2G contracting to boost Finnish defence industry exports

A working group appointed by the Ministry of Defence has submitted its final report to Minister of Defence Antti Häkkänen on developing a government-to-government (G2G) trade mechanism for the promotion of Finland’s defence industry exports and international technology cooperation.

According to the working group, Finland needs to boost its defence and security industry exports and develop government instruments that support international cooperation in the changed security environment.

“The Finnish Government has identified the defence industry as one of the most promising sources of future growth and wellbeing in Finland. There are already examples of the international defence market boosting strong growth for Finnish companies. This report gives practical building blocks for raising exports promotion by the defence administration to the next level. A growing defence industry is also an increasingly strong cornerstone of Finland’s defence and security,” Minister of Defence Häkkänen says.

Government-to-government (G2G) contracting is a procurement model where one government sells defence materiel to directly another government. The government buying the materiel enters a contract with the selling government instead of a private supplier. The selling government either sells equipment directly from its own inventory or procures materiel from private suppliers for resale.

G2G contracting is a relatively common practice internationally, and its significance and popularity has increased in recent years especially in the defence sector, even between EU Member States.

The working group estimates that G2G contracting could strengthen the competitiveness of the Finnish defence and security industry, help retain in Finland the expertise and production capacity that are essential for security of supply and deepen Finland’s defence and security cooperation with partners. In its report, the group presents further measures needed to prepare the introduction of G2G contracting.