ABSTRACT
Introduction During the interwar period the Nordic countries faced a contradictory situation in terms of international trade and trade policy.1 On the one hand, the Nordic states, with their open economies, jointly tried to liberalize international trade, since as small states they were all relatively more dependent on exports and imports than the great powers. Like other small states their domestic market was too small: they were price takers rather than price makers.2 On the other hand, as international trade was strangled, bilateralized and subjected to quotas – espe cially after the Great Depression – they tried to strengthen their position in trade negotiations by cooperation. This chapter focuses on two questions: what actions were taken jointly by the Nordic states, and how successful were they? It addresses Nordic trade policies on three levels. On the international level, to what extent were common Nordic attitudes and actions identifiable in an international context such as the League of Nations? The chapter will examine Nordic efforts to liberalize international trade in the 1930s. Second, what happened to Nordic trade and trade policies at the national level, that is, in each country’s relations to its two most important trade partners during this period: the United Kingdom and Germany? Finally, there is the business level. Many of the major Nordic trading companies and industrial organizations were actors in the international arena. To what extent did their business contacts and international relationships help to forge favour able trade agreements and improve the international trading climate? In this context we shall focus on what two very important business organizations were able to achieve, one importing coal and the other exporting paper. They had a hard time in the 1930s, fighting for acceptable conditions in the fierce competi tion of world trade. I suggest, however, that small states have the opportunity to be successful, especially on this third level. The industrial and capitalist sphere was small and cohesive, experienced and skilled in international affairs. Such leading figures were often utilized by governments to obtain results in the inter national trade of their country – especially in times of crisis and war. Aspirations for Nordic cooperation and collaboration in trade policy can be traced at least as far back as to the beginning of the twentieth century, when
Norway and Finland became two new independent states on the European arena, in 1905 and 1918 respectively (although there was always a clear dividing line between Finland and the other three). Monetary collaboration began even earlier: the Scandinavian Currency Union with the ‘krona’ as a base for exchange was formed between Denmark and Sweden in 1873, with Norway joining two years later. All three currencies were linked to sterling and the gold standard. A Latin Currency Union had been established in 1865 between Belgium, France, Italy and Switzerland, with Finland also pegging its mark to the gold franc in 1877, during the period when it was still part of the Russian empire. In the interwar period the Nordic states continued to cooperate to liberalize international trade and to achieve better results for themselves, notably in the Oslo convention of 1930 and, together with the Netherlands and Belgium/Luxemburg, in the Ouchy convention of July 1932. Because the Nordic states, like other small states, depend on foreign trade, they are directly affected by the fluctuations of the international economy.3 But such states have at least three opportunities to keep up with the international com petition. First, they can specialize in the few branches in which they have identi fied possibilities of competitive advantage. These might be raw materials from natural resources such as wood or iron ore. Or they could be shipping or some specialized production such as electrical equipments or chemicals. Second, if a small state has a primary product of strategic and high value, such as nickel, alu minium or molybdenum, it can use this advantage to obtain more favourable trade agreements with great powers, even if the total world demand is rather small.4 And third, small states can achieve economies of scale by cooperating with other small states that have similar production profiles and the same trade interests.
