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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.
From Isolation to the Core: Finland's Position towards European Integration 75 Economic restructuring was most drastic at the beginning and continued, although more slowly, from about the mid-1970s. During this process Finland was also gradually transformed from a country of high protectionism to one completely adapted to the competitive circumstances of the new global economy. However, this process was slow, lasting for about four decades, which meant smooth transition in view of social adjustment. Tapani Paavonen Senior research fellow University of Turku, Finland
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JOURNAL OF EUROPEAN INTEGRATION HIS
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INTRODUCTION Fernando Guirao The hi
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Introduction 7 had become accustome
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Introduction 9 strengthening the an
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12 Maurice FitzGerald endorsed by a
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14 Maurice FitzGerald Ireland in a
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16 Maurice FitzGerald Relations wit
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18 Maurice FitzGerald by the Counci
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20 Maurice FitzGerald it has been a
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22 Maurice FitzGerald application t
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146 Books received - Livres reçus
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