journal of european integration history revue d'histoire de l ...

74
Tapani Paavonen
trade policies, while the subsequent development is characterised by considerable
continuity. World trade liberalisation following the Kennedy (1964-67) and Tokyo
(1973-79) rounds of GATT surely mitigated the discernible effects of European integration
decisions.
The most credible explanation for the development of trade patterns seems to be
that, on one hand, the integration decisions created the conditions in which enterprises
gradually developed their international operations and, on the other, the
gradual internationalisation of business practices created pressures for the integration
policies. In this way the relationship between practised policies and actual economic
development seems to have been interactive. Quite obviously, even without
the integration decisions the structural development would have proceeded in the
same direction, but at a considerably slower pace.
CONCLUSIONS
Finland's participation in the process of West European integration began with the
endeavour to safeguard her relative competitive position in the most important
export markets, but gradually Finland was drawn into an all-embracing economic
and eventually also political integration with regard to Western Europe. Participation
in West European integration was, without doubt, a precondition for the transformation
of Finland, in the same period, from a backward, semi-agrarian country
to an economically advanced industrial society. This development can be best interpreted
in the terms of the path-dependence theory, i.e. integration has reinforced
institutions that promote economic progress. 41
The first phase of Finland's participation in West European integration consisted in
free trade in industrial goods within the framework of the FINN-EFTA agreement
(1961) and the free trade agreement with the EC (1973). Due to Finland's delicate international
position in the circumstances of the Cold War, the emergence of these agreements
involved considerable problems with regard to Finland's relationship with the Soviet
Union. A second phase, which consisted in an all-embracing integration, started in
the mid-1980s. The new orientation towards reform in the USSR resulted in a considerable
decrease of Soviet political obstacles to Finland’s accommodation within the institutionalised
framework of West European integration and, eventually, as the result of
the collapse of the Soviet Union, they were abolished.
40. Relevant statistical indicators are: GL indices for intra-industry trade (figure 3); imports dependence
by industries, P. AHDE, Tuonnin merkitys Suomen kansantaloudelle ja viennille, Helsinki,
1990, pp.77-81; χ 2 values for transformation of internal industrial structures within different periods,
T. TOIVONEN, Rakennemuutos 1930-1985. Aineistoa toimiala-, luokka- ja kerrostumarakenteen
tutkimukseen, Turku, 1988, repr.1990, pp.72-74.
41. See spec. D.C. NORTH, Economic Performance Through Time, in: The American Economic Review,
Vol.84, No.3, 1994, pp.363-366.