Western and Eastern Europe in Finnish Trade Policy, 1957-1974
| Published date | 01 March 1978 |
| Date | 01 March 1978 |
| Author | Erkki Maentakanen |
| DOI | 10.1177/001083677801300102 |
| Subject Matter | Articles |
Western
and
Eastern
Europe
in
Finnish
Trade
Policy,
1957-1974:
Towards
a
Comprehensive
Solution?
ERKKI
MAENTAKANEN
Ministry
of
Foreign
Affairs,
Helsinki
Mäentakanen,
E.
Western
and
Eastern
Europe
in
Finnish
Trade
Policy,
1957-1974:
Towards
a
Comprehensive
Solution?
Cooperation
and
Conflict,
XIII
,
1978,
21-41.
The
author
analyses
three
different
phases
in
Finland’s
trade
policy:
the
liberalization
of
her
Western
trade
in
1957,
her
association
with
the
European
Free
Trade
Association
(EFTA)
and
the
related
Agreement
on
Customs
Matters
with
the
Soviet
Union
in
1960-
61,
and
her
negotiations
and
agreements
with
the
European
Economic
Community
(EEC)
and
the
Council
for
Mutual
Economic
Assistance
(CMEA)
of
the
Socialist
countries
in
1970-73.
The
failure
of
the
Nordic
Common
Market
(NORDEK)
is
also
briefly
touched
upon.
All
these
negotiations
and
the
ensuing
solutions
have been
characterized
in
the
Finnish
debate
as
the
most
important
trade
policy
decisions
after
the
Second
World
War.
They
have
affected
the
structural
framework
of
Finnish
economic
relations
with
the other
European
countries
and
in
this
sense
have
been
’politicized’.
They
have
been
Finnish
reactions
to
the
changes
in
her
immediate
international
environment
and
have
thus
supplemented
the
other
facets
of
her
foreign
policy
in
the
European
context.
They
are
also
solutions
to
the
problem
of
reconciling
the
requirements
of
an
extensive
trade
with
the
planned
Socialist
economies
in
a
market
economy
country,
where
the
various
aspects
of
foreign,
internal
and
economic
policies
are
deeply
interlocked.
I.
THE
GENERAL
FRAMEWORK
OF
FINNISH
POLICY
The
most
difficult
task
of
Finland’s
foreign
policy
after
the
Second
World
War
was
to
reconstruct
relations
with
the
Soviet
Union
and
to
create
a
credible
policy
of
neutrality
which
had
failed
in
the
1930’s.
Development
of
these
rela-
tions
and
the
continuation
of
the
Scan-
dinavian
orientation
to
which
countries
she
has
close
historical,
cultural
and
economic
ties
have
been
the
two
main
lines
of
Finnish
post-war
policies.
Geo-
graphically
and
historically
the
position
of
Finland
is
of
a
special
kind -
as
is
the
position
of
any
country
in
its
own
environment.
If
we
look
at
the
post-war
international
system
in
Europe
a
special
feature
may
be
found
in
that
Finland
seems
to
be
the
only
European
power
to
have
achieved
the
situation
envisaged
by
the
Western
powers
during
the
Second
World
War
when
they
recognized
the
legitimacy
of
the
Soviet
desire
to
have
friendly
neighbours
while
stressing
that
these
states
should
be
democratically
governed.
1
A
special
feature
is
also
the
system
of
cooperation
that
has
developed
between
the
Nordic
countries.
Three
of
them,
Denmark,
Norway
and
Iceland,
belong
to
NATO
while
two,
Sweden
and
Fin-
land,
are
neutral.
The
credibility
of the
latter’s
neutrality
toward
the
Soviet
Union
is,
moreover,
strengthened
by
the
Treaty
of
1948
on
Friendship,
Co-operation
and
Mutual
Assistance
(TFCMA),
which
takes
into
account
the
Finnish
desire
to
stay
outside
the
big
power
conflicts,
the
basic
premise
of
her
policy.
The
treaty
confirms
an
earlier
engagement
of
Fin-
land
not
to
participate
in
any
coalition
directed
against
the
USSR.
It
stipulates
further
that
if
either
Finland
or
the
USSR
through
Finnish
territory
becomes
the
object
of
an
armed
attack
by
Germany
22
or
any
state
allied
with
Germany,
Finland
will
fight
within
its
own
territory
to
repel
the
attack.
In
such
an
eventuality
Fin-
land
may
receive
assistance
from
the
Soviet
Union,
but
this
must
be
agreed
upon
separately.
The
contracting
parties
also
declare
their
intention
to
act
in
a
spirit
of
cooperation
and
friendship
for
the
continuous
development
of
economic
and
cultural
relations
between
them
and
commit
themselves
to
follow
the
principle
of
respect
for
sovereignty
and
non-inter-
ference.
In
the
economic
domain
Finland
fairly
rapidly
reached
a
satisfactory,
though
unbalanced,
growth
after
the
Second
World
War.
It
was
largely
dependent
on
foreign
trade
and
in
this
field
the
tradi-
tional
wood-processing
industry
was
able
in
a
relatively
short
time
to
reach
the
international
level
on
the
basis
of
domes-
tic
raw
materials
and
by
adopting
the
new
production
techniques
that
were
developed
mostly
in
the
USA,
but
also
in
Sweden.2
By
the
beginning
of
the
1950’s
it
had
caught
up
the
lead
of
its
competitors
and
started
expanding
its
production
basis
and
exports.
The
new
investments
in
wood-processing
in
turn
offered
openings
for
the
metal
industry,
which
had
new
capacity
and
new
struc-
tures
partly
due
to
war
reparations
paid
to
the
Soviet
Union.
The
development
of
Finnish
industry
and
exports
added
new
interests
to
the
sphere
of
foreign
and
trade
policies.
On
the
internal
side
it
hastened
the
change
of
the
social
struc-
tures
although
the
mobility
of
the
pro-
ductive
factors
still
remained
relatively
low
during
the
1950’s.
Considerable
change
had
occurred
in
the
geographical
distribution
of
Finland’s
foreign
trade.
While
the
share
of
the
Soviet
Union
had
been
3
per
cent
during
the
first
half
of the
1930’s
it
rose
to
about
one
fifth
during
the
first
half
of
the
1950’s.
War
reparations
played
a
role
in
changing
its
volume
and
structure,
but
rapidly
it
started
developing
through
normal
channels
and
since
1951
on
the
basis
of
five-year
basic
agreements
and
their
annual
protocols.
This
trade
has
since
been
bilateral
with
a
short
ex-
periment
of
triangular
trade
between
Fin-
land,
the
Soviet
Union
and
respectively
Poland
and
Czechoslovakia
in
the
1950’s.
With
West
European
countries
Finnish
trade
was
also
bilateral
until
1957
and
with
France
even
a
couple
of
years
later.
II.
LIBERALIZATION
AND
MULTI-
LATERALIZATION
OF
WESTERN
TRADE
In
the
1950’s
Finland
maintained
controls
over
her
economy
and
foreign
trade
for
a
longer
period
than
the
other
market
economy
countries.
Although
she
had
joined
the
IMF,
IBRD
and
GATT
at
the
end
of
the
forties,
under
the
stress
of
the
Cold
War
she
did
not
become
a
member
of
the
OEEC.
In
this
organization
the
other
West
European
countries
liberalized
over
90
per
cent
of
their
mutual
trade
by
the
end
of
the
fifties.
Finland
had
experienced
commodity
scarcities
perhaps
longer
than
the
others,
the
war
repara-
tions
had
necessitated
economic
controls,
and
the
mentality
in
many
circles
was
favourable
to
rationing
as
a
means
to
maintaining
the
internal
economic
bal-
ance.
Moreover,
inflation
was
running
at
a
higher
rate
in
Finland
than
in
her
major
trading
partners,
which
increased
the
need
for
controls.
In
these
conditions
between
the
opposing
commercial-politi-
cal
blocs,
the
Finnish
economy
was
more
and
more
isolated
from
the
international
division
of
labour.3
Temporarily,
in
1954
and
1955
the
favourable
development
of
the
export
market
made
it
possible
to
relax
some
of
the
import
restrictions,
but
already
in
the
latter
part
of
1956,
with
consumer
demand
rising
rapidly
in
the
aftermath
of
the
general
strike
early
that
year,
the
Finnish
authorities
again
had
to
restrict
imports
sharply.
The
disadvantages
of
import
restric-
To continue reading
Request your trial