W. 39 Policy Watch

The Swedish General Election Results Are In – but the Question of Who Will Form Government Remains 

In the swedish general election on the 13th of September, the opposition gained a small majority with 176 (49.5%) mandates to the Tidö parties’ 173 (48.8%) mandates. However, who will take over and govern Sweden for the next four years is not yet crystallised. This Monday, the Speaker of the House began his rounds with the party leaders and gave the Social Democrats’ Magdalena Andersson the first exploratory mandate to try and form a government. This might prove difficult, as reports show that the leaders of the Left Party and the Centre Party have not yet been in communication, and the Left Party’s red line to receive minister posts is not acceptable to the Centre Party. Both need to support the Social Democrats and the Green Party for the opposition to be able to form a government. The speaker of the house gives out four exploratory mandates; if no government and prime minister is elected after these four rounds, a new election must be held.  

Burnham Opens Up for Discussion to Rejoin the EU 

Andy Burnham, UK's Prime Minister is advocating, and has left open the possibility of the Labour Party campaigning to rejoin the EU at the next general election.  

His comment marks a shift from his predecessor Keir Starmer, who had vowed to "make Brexit work", meanwhile preserving red lines on UK's relationship with the EU. Within Labour, this comment has reignited a debate over whether the party should seek closer integration with the rest of Europe, and exactly how far that integration should go.  

The EU Customs Reform Enters into Force 

In a press release, the European Commission announces that the new EU Customs Reform has entered into force. It will gradually be implemented as of the 21st of September and modernise the EU customs system. The Commission explains that it will digitalise customs, making it more data-driven and “responsive to the growing challenges of international trade”. EU customs will have to address escalating geopolitical risks, e-commerce and demand for consumer protection. The core of the reform is the new Union Customs Code (UCC) and the establishment of the EU Customs Authority (EUCA).  

The argument given is that the new code will harmonise processes within the EU, strengthen risk management and reduce administration – ultimately resulting in a single customs entry point for all customs operations across the EU. The new authority has the purpose of strengthening cooperation between Member States’ customs authorities through broader EU risk management and a common and consistent response to threats at the EU borders. The EUCA will also oversee the development of the EU Customs Data Hub, creating a single trade interface for imports and exports, and sharing all vital information with customs authorities. The Data Hub will gradually replace national customs IT systems and is expected to be operational for e-commerce in July 2028.  

The EUCA is expected to start operations in 2027, and Member States now have 12 months to implement the new rules.  

The Russian Parliamentary Election Shows an Unsurprising Win for Putin, but Garners Criticism as Elections Included Occupied Ukraine 

Reuters reports that Vladimir Putin’s United Russia party won 57.83% of votes in the first parliamentary election since the start of the war in Ukraine. The results give the party 355 of 450 seats in the Duma, which gives it a constitutional majority. Reuters previously reported that the four other parties expected to re-enter the Duma are all in support of the war and that they tend to vote in favour of United Russia in key questions. Several parties and politicians have been barred from participating, being labelled as “foreign agents”. In the election, voting was also held in Crimea, which Russia annexed in 2014, as well as Russia-controlled regions of Donetsk, Luhansk, Zaporizhzhia and Kherson in Ukraine. The international criticism – amongst others, from the High Representative on behalf of the EU – of the Russian election was rejected by Russian authorities, with claims that the voting was conducted in accordance with the law and that Russia's Western enemies aim to “undermine and disrupt” the election.  

Conflict Around the Bab el-Mandeb Strait Poses a Risk to International Trade 

The intensified attacks between Saudi Arabia and Yemen’s Houthis pose a risk to the Bab el-Mandeb strait – which serves as a significant part of trade routes from Asia to Europe. The Iran-backed Houthis launched an offensive strike, which in the last few weeks has allowed them to bring Yemen's Red Sea coast under their control. Al Jazeera reports that this has given them almost unrestricted access to the waterway, posing a major risk for international shipments, as around 12 to 15 percent of world trade has historically passed through this strait, which links the Red Sea to the Gulf of Aden. Meanwhile, transits through the Strait of Hormuz continue to decline. Reuters reports that a total of 17 vessels passed through this weekend, down from 37 last weekend and an average of 125 vessels a day before the war. 

Qatar warns that losing access to the Bab el-Mandeb Strait would exacerbate the crises already brought on by the conflict around the Hormuz Strait. Ibrahim bin Sultan Al Hashmi, Director of Media and Communication at Qatar’s Foreign Ministry, urged the international community to work together to prevent the closure of Bab el-Mandeb, claiming that the blocking of international waterways cannot become the “new normal”.  

The World Trade Organization Launches the 2026 World Trade Report at the WTO Public Forum 2026 

From the 15th to the 17th of September, the WTO held its Public Forum of 2026, with the theme “Powering the Future”. Placing services at the centre of the conversation and their role in driving growth and development, the forum discussed how trade in services is the most dynamic component of world trade.  

At the forum, the World Trade Report of 2026 was launched. The report concluded that the cooperation in the WTO has effectively supported an integrated, multipolar global economy which has distributed economic power more evenly. It also concludes that the growth of emerging economies has created a gap between “historic legal commitments and modern economic realities”, making cross-border trade spillover accessible to more than a few advanced nations. A challenge ahead is differences in economic systems and government interventions, as industrial policies strain traditional disciplines. Further, trade itself has become more complex as GVCs, digital trade and environmental transition present new interdependencies that systems must manage. Finally, the report states that all these challenges are compounded by the current geopolitical tensions, which have caused a new view of the positive and negative consequences of economic interdependence.  

The WTO concludes that there is a significant risk of drift from rule-based cooperation towards a less predictable and fragmented form of governance, if the challenges outlined in the report are not addressed.