ABSTRACT
This chapter deals with the question of whether the effects of bilateral clearing on a small market economy, such as Finland's, have been favorable, in particular as seen against the background of the significant changes in world trade since the first oil price shock of 1973. Settlement in Finnish-Soviet trade is conducted by bilateral clearing. The settlement unit in bilateral commercial dealings is the clearing ruble (CR), which in theory is non-convertible. The conduct of bilateral trade between the two countries is determined by three factors: five-year agreements and trade protocols on the Interstate level, the enterprises' export and import requirements and the actual clearing balance. The prices in Soviet-Finnish trade are calculated on the basis of world or home market prices, converted into rubies. Though refraining from direct interference in tatter's negotiations, the Finnish government possesses an instrument – the State import-Export License Office – for regulating the trade turnover within the planned limits.
