Finland and the question of West European economic integration, 1947–1961

Abstract

The study deals, on one hand, with the international politics connections, and, on the other, the endogenous economic policy implications of Finland's relationship with West European economic arrangements from the Marshal! Plan up to the FINN-EFTA Agreement. In the 1950s, the Finnish economy was, in fact, a closed economy, albeit highly dependent on foreign trade. Finland's international position in the Soviet sphere of influence imposed restraints with regard to participation in international economic integration. Finland, for example, remained outside the Marshal! Plan and the Organization for European Economic Cooperation (OEEC), and even Nordic cooperation was a delicate matter from the point of view of relations with the Soviets. However, the protectionist foreign trade policies, consisting of both tariffs and quantitative restrictions, explain at least as much of the relative isolation of the Finnish economy. In these circumstances, Finland's participation in EFTA cooperation, within the framework of the FINN-EFTA agreement, from 1961 onwards was the decisive turning point towards an opening economy.     

Neutrality and free trade: Sweden and trade liberalisation, 1948–1958

Abstract

This article discusses the Swedish attitude to European economic cooperation, an attitude that has been described as reluctant. The traditional explanation for this has been Sweden's neutrality. This explanation has been challenged by researchers, who have claimed that a nationally self-sufficient social democracy was responsible for the reluctance towards Europe. In this article, neutrality is still seen as the main explanatory factor. Swedish strategies for dealing with European integration linked the concepts of neutrality and global free trade. Nordic cooperation was also seen as a strategy to meet demands for European integration. Swedish activities within the European organisations were limited by neutrality concerns. Within these limits Sweden worked for economic policy solutions, which might be called social democratic.     

OPPORTUNITY OR CHALLENGE? AUSTRALIA AND EUROPEAN INTEGRATION, 1950–57

This paper examines Australia's approach to Western European integration in the 1950s. While superficially supportive of steps towards greater Western European cooperation, the Menzies government had an ambivalent attitude towards the integration process. Ministers and officials in Canberra recognised the importance of a strong and prosperous Western Europe, but the formation of a tightly knit Continental grouping also posed a number of major challenges to the makers of post‐war Australian foreign policy. The Menzies government soon began to wonder whether attempts to create supranational bodies in Continental Europe accorded with Australian political, economic, and security interests.     

Denmark's relations with Lübeck and Hamburg in the seventeenth century

Abstract

Denmark's political relationship with the Hanseatic towns in the sixteenth century was one of increasing disengagement and self-assertion. During the reign of Frederick II, for instance, there were operations against Hamburg in 1562 and 1574, with the seizure of Hamburg ships in Danish-Norwegian waters; similarly, Hamburg's interests in Iceland were interfered with and her purchases of com from Holstein fanners obstructed. These tendencies became still more marked under Frederick's successor, Christian IV. Princely dislike of the republican cities and national business interests combined in the spirit of early mercantilism. Lubeck's privileges were not confirmed, In 1602 Copenhagen, Malmo and Helsinger were given the right to trade with Iceland, a right which had previously been exercised by Hamburg, Bremen and Lubeck. Together with the founding of Gliickstad, the efforts to command the estuaries of the Elbe and Weser, and the King's expansionist policy in north Gennany, this gave the cities sufficient grounds for anxiety.     

Global market effects of alternative European responses to genetically modified organisms

Global Market Effects of Alternative European Responses to Genetically Modified Organisms. — Current debates about genetically modified organisms (GMOs) in agriculture reveal substantial differences in the perception of the associated risks and benefits. Genetically modified crop varieties allegedly provide farmers with agronomic benefits, but environmental, health and ethical concerns are also being raised. This paper discusses the ways in which the emergence of GMOs could lead to trade disputes between Western Europe and the United States. It then uses an empirical model of the global economy to quantify the effects on production, prices, trade patterns and national economic welfare of specific policy and consumer responses to GMOs in Western Europe.     

Norway's liberalisation of trade and payments in the 1950s

Abstract

While historical scholarship has focused on the domestic macroeconomic adjustment to trade liberalisation of the 1950s in terms of fiscal, monetary and incomes policies, this study deals with the liberalisation itself. From the perspective of the domestic political economy it provides an account of Norway's policies towards the European trade and payments schemes. It argues that although national ambitions were constrained by multilateral European liberalisation, a successful policy mix of exploiting EPU credits, delaying import quota liberalisation and selectively raising tariffs was pursued. It also argues that the government's sympathy towards the stillborn Nordic customs union in 1954 originated in this policy mix.     

From imperial to regional trade preferences: Its effect on europe’s intra- and extra-regional trade

From Imperial to Regional Trade Preferences: Effect on Europe's Intra- and Extra-Regional Trade. - Europe's switch from imperial to regional trade preferences has certainly raised the share of its trade that is intra-regional, but this does not necessarily mean Europe is becoming less economically integrated with the rest of the world. This paper shows that the propensity for European GDP to be traded with non-Europeans - which trebled during the hundred years to 1928 - has fallen little since then. The reason is that the re-direction of Europe's trade has been accompanied by a considerable degree of opening up to trade with non-Europeans. Data are also presented for Eastern and Western Europe separately from 1928. The hope is that Europe's latest regional integration initiatives will be able to continue this trend, rather than lead to a “Fortress Europe” outcome.     

The French commitment to European monetary integration: A review of the two EMS crises (1981–83, 1992–93)

This paper focuses on the process of exchange rate management during the two European Monetary System(EMS) crises, in 1981–83 and 1992–93, and examines the factors which led the French governments to adhere to the EMS. France's strong franc (franc fort) policy is a useful test case for maintaining national commitment to European monetary integration. The origin of the franc fort policy can be traced back to the exchange rate crisis of 1981–83. By actively supporting European institutions and emphasizing the emergence of a strong and united European common currency, France discovered the way to bolster confidence in her economic policy. Beyond this focal point, political justification and economic rationality became mutually reinforcing, configuring French national preference in European monetary integration. The response of the French government to the EMS crisis of 1992–93 was more consistent compared to the response to the 1981–83 crisis, and reflected the accumulation of loyalty to European monetary integration. This loyalty, however, was made neither from purely economic calculation nor out of normative commitment French European monetary policy reflected the interaction between domestic politics and European monetary integration. The French commitment to the franc fort also was based on domestic political bases such as the existence of a core policy group, a centralized policy‐making structure, and an issue linkage between the franc fort and European integration.     

Nazi economic imperialism and the exploitation of the small: evidence from Germany’s secret foreign exchange balances, 1938‐1940

This article re‐examines the hypothesis of Hirschman and Child that Nazi trade policy before the Second World War exploited the smaller European countries. Archival evidence on foreign exchange balances for 1938‐40 shows that trade policies alone had only a small effect. Earlier dependence of south‐eastern Europe on Germany was caused partly by the collapse of south‐east European trade with the Soviet Union. Adjusted figures reveal a regional pattern similar to that of 1913. Generally, exploitation began with military occupation, but was then on a massive scale. Results again confirm Milward's findings on the westward orientation of the German war economy.     

中国国防支出对经济贸易影响的实证研究

中国在一体化经济和军民融合的新时代背景下,研究国防支出对经济贸易的影响机制具有重要价值。通过对中国近三十年来国防支出对国内生产总值和对外进出口贸易的影响进行实证研究可以发现：中国的国防支出可以促进经济增长,而对外贸易能够促进国防支出增加且对外进口贸易对其影响增幅较大。同时,根据研究结论提出中国要稳步增加国防支出、优化出口贸易结构、加大产业科研投入、推动区域协调发展的政策建议。     

日本关于区域经济集团化政策的艰难调整

20世纪80年代末至90年代初，尽管北美自由贸易区和欧洲统一大市场相继形成，北美和西欧的经济联合也取得了实质性的进展，但日本关于经济集团化的政策取向却主要表现为坚持非集团化和批判集团化。然而，伴随着世界性双边自由贸易的迅速发展，及以自由贸易协定为基本内容的国际经济合作组织的日渐增多，为了充分谋求自由贸易的实惠，日本以日-新双边自由贸易谈判为契机，已经从经济集团化政策的坚定批判者转变为谨慎实践者，但是，在国内外政治、经济环境的影响下，这种政策的调整程度还很有限，日前，日本关于经济集团化的政策仍处于不断探索和艰难调整之中。     

Czechoslovakia and comecon

Summary The article follows official statements and theoretical discussions in Czechoslovakia in order to explain the role of foreign trade in Czechoslovak economic reforms. After an outline of the historical background, stressing the dependence of Czechoslovak economy and of her industrial structure on external relations, the position of Czechoslovakia is assessed during Khrushchev's attempts to integrate the East European countries. The main attention, however, is paid to the period after December 1966 when top Czechoslovak organs took the decision to start profound economic reforms in the field of foreign trade—as the first East European country and without consulting other COMECON members. The most important instrument, the so-called “inner price adjustment”, has been employed since January 1st, 1967, i.e. one year before Hungary has introduced it, too. It interconnects the domestic wholesale prices with the foreign trade prices in such a way as to make the difference part of the financial results of the enterprises instead of former budgetary financing. Within the framework of other measures this device would make it ultimately possible to reach convertibility of the Czechoslovak crown. During the first half of 1968 theoretical efforts were aimed at foreign trade liberalization and such a policy was partly executed. Finally, two theories of “socialist integration” are sketched which have emerged in Eastern Europe on both official and theoretical levels since august 1968 as a consequence of the above-mentioned Czechoslovak developments. The author is a research fellow at the Netherlands School of Economics in Rotterdam.     

Analysis of Brexit and its policy lessons for Asian integration

Galvanised by the devastation of the Second World War, European countries achieved a historically unprecedented and unparalleled level of regional economic integration in the post-war period. Intensive cooperation between the two biggest powers of continental Western Europe, France and Germany, lay at the core of Europe's seemingly relentless momentum towards integration, crystallised by the European Union (EU). The Franco-German alliance also provided strong eadership and sense of direction for the EU, which gained further traction with the admission of Central and Eastern European states after the fall of communism and the establishment of a monetary union among many of its members. However, more recently, the European integration process no longer seems unstoppable or inevitable. Most shockingly, the United Kingdom, a core EU member and the EU's third largest economy, has opted to leave the union, triggering the ‘Brexit’ process. Nor is Brexit the only sign of growing fractures within the EU. The current standoff between the EU and Italy over Italy's unwillingness to rein in its fiscal deficit is just one additional example of the loss of momentum. The central objective of the paper is to examine EU's past successes and current problems from the perspective of Asian countries, in particular ASEAN+3 countries that have achieved some measure of integration, although well below that of the EU. Both past successes and current problems hold valuable lessons for ASEAN+3 countries as they chart their own course towards regional integration. Given that the level of integration among ASEAN+3 is much lower than that of the EU, it would be unwise to draw lessons, positive or negative, without the proper context. Nevertheless, the European experience can provide valuable insights for Asia's integration process.     

Endogenous and exogenous variables in trade agreement policy:

Abstract

Trade agreement negotiations are the forum in which a state tries to synchronise its trade policies with other countries. This article examines the effects of endogenous and exogenous variables in trade agreement decision-making. The study concentrates on Finland's most important trade agreement negotiations with the Soviet Union, Germany, Great Britain, and EFT A from the 1930s to the 1960s. Finland was a small, open economy that was dependent on foreign trade. In the 1930s Finland had to adapt to international protectionism, which came to dominate international trade until the late 1950s. During the Second World War Finland had to regulate her foreign trade as a part of rationing systems. After the war protectionist ideas continued to dominate international trade policy decision-making. Accordingly, many regulative policies survived into the post-war period too. Finally, deregulation in Finnish foreign trade policy started in the late 1950s, the FINN-EFTA-negotiations being the final turning point to a more liberal era in foreign trade. The essential question in the article is, what kind of influence did the endogenous interests have on Finnish trade policy decision-making considering the various situations in international politics, for example, protectionist and deregulative tendencies.     

Russia’s invasion of Ukraine: assessment of the humanitarian,economic, and financial impact in the short and medium term

What are the economic effects of the Ukraine war for Ukraine, Russia, and the rest of Europe? In this study, the Vienna Institute for International Economic Studies (wiiw) sheds light on the immediate consequences on the one hand, but also on the medium-term structural changes caused by the largest armed conflict in Europe since the Second World War. The Russian invasion of Ukraine has triggered a humanitarian crisis. Pre-war, almost 19 m people lived in those regions that are currently directly affected. Refugee inflows to the rest of Europe are likely to be at least three times greater than in 2015/2016. As Black Sea ports come under Russian assault, Ukraine has lost its ability to sell more than half of its exports, primarily agricultural commodities and metals. Western financial support will become ever more important as the war continues. Turning to Russia, sanctions will have a very serious impact on that country’s economy and financial sector. Despite being partly hamstrung by the fact that a large proportion of Russian reserve assets are frozen in the EU and G7, the central bank managed to stabilise financial markets by a combination of confidence-building and hard-steering measures: capital controls, FX controls, regulatory easing for financial institutions, and a doubling of the key policy rate. The medium-term and long-term outlook is negative. As a result of the war and the sanctions, the rest of Europe faces a surge in already high inflation; this will weigh on real incomes and will depress economic growth. Many European countries rely heavily on Russia for oil and gas imports: import shares are over 75% in Czechia, Latvia, Hungary, Slovakia, and Bulgaria with respect to natural gas; Slovakia, Lithuania, Poland, and Finland with respect to oil and petroleum; and Cyprus, Estonia, Latvia, Denmark, Lithuania, Greece, and Bulgaria with respect to solid fuels. Aside from energy, the fallout via trade for the rest of Europe is likely to be small. Non-energy trade and investment links between Russia and many European countries have declined in importance since 2013. There are four main areas of structural change and lasting impact for the EU (and Europe more broadly) as a result of Russia’s invasion of Ukraine. First, the EU will get more serious about defence. Second, the green transition will gather pace. Third, broader Eurasian economic integration will be unwound. And fourth, the EU accession prospects for countries in Southeast Europe could (and should) improve.

     

弱势回稳的世界经济:新变量、新动力、新机遇——2020年世界经济分析报告

受贸易摩擦、地缘政治和衰退风险等重大不确定因素的共同影响,2019年的世界经济面临着不断下行的压力。发达国家和新兴经济体的经济增速出现了同步放缓。展望2020年,随着中美贸易摩擦和英国"脱欧"紧张局势缓解以及各国继续运用货币与财政手段进行"政策托底",世界经济有望弱势回稳。其中,发达经济体的增长势头趋缓。美国将迎来大选,政府有动力刺激经济实现温和的增长;欧洲的增长会更为缓慢,部分南欧国家爆发债务危机的可能性仍然存在;日本的经济增长可能会因为消费税上调而出现负面影响。新兴经济体的增长动能有望增强,但部分国家面临着债务、汇率及民粹主义风险,各国经济走势也将出现分化。随着中国改革开放力度的增强,中国经济将持续成为全球经济发展的核心推力与稳定器。     

A Tale of Two Peripheries: Real Wages in Denmark and New Zealand 1875–1939.

Abstract

Denmark achieved dramatic real wage growth after 1870, compared to other European economies and to those of the New World. The ingredients of Denmark's success are gauged by comparison with one its major competitors in the British food-products markets, New Zealand. Faster Danish productivity growth explains only part of Denmark's faster real wage growth. Open economy forces, chiefly international capital flows before 1913, and especially Danish trade union militancy around the end of World War I, influenced income distribution and especially favoured wages over property income in Denmark. Denmark's GDP per capita equalled New Zealand levels between the world wars but her real wages surged past those of New Zealand as distributional shifts favoured Denmark's wage earners.     

Estimating the economic cost of China's new desulfur policy during her gradual accession to WTO: The case of industrial SO2 emission

To understand the potential impacts of China's accession to WTO on her new desulphur policy (gradual reduction of 10% of annual SO₂ emission by 2005 with respect to that of 2000), we construct a CGE model in which SO₂ emission is directly linked to energy input consumption in production. The model equally considers the substitution possibility between energies of different SO₂ effluent ratios by including energy as labor and capital in the constant elasticity of transformation production function. The positive externality of trade in China's economy is also included. This model is then calibrated into a 55-sector Chinese SAM for the year 1997. Four policy simulations (Business as Usual, Openness policy only, desulfur policy only, and the combination of openness and desulfur policy) are made for the period from 1997 to 2005. The results show that the environmental impact of trade, though proven to be “negative”, stays rather modest. This is owing to the industrial composition transformation that deviates the specialization of the Chinese economy towards labor-intensive sectors under the new trade liberalization process. We do not find evidence for the “pollution haven” hypothesis. Seemingly ambitious, the new desulphur policy will only bring small economic growth loss. The pollution reduction objective will be realized mainly by substitution between polluting and less or non-polluting energies. The combination of trade liberalization and pollution control policy seems to give China more flexibility in adapting her economy to the new desulphur objective. Considering these different aspects together, the total economic loss due to the new desulphur policy will be limited to only − 0.26% under the presence of trade liberalization.     

China's Free Trade Ports: Effective Action Against the Threat of De‐globalization

With sluggish external demand and increasing trade protectionism by the USA and the European Union, China is facing severe challenges in implementing its deeper, ongoing reforms. To respond actively to such challenges, the Communist Party of China's 19th National Congress proposed to “promote a new pattern of all‐round opening up.” In particular, the establishment of free trade ports is considered an important means to realize deeper integration with the world economy. This paper discusses the background, the motivation, the possible challenges as well as a feasible path for the successful implementation of free trade ports in China. Based on the international experience, the construction of free trade ports in China requires freer trade in goods, high mobility of talent and free capital flow.     

欧盟贸易政策的发展趋势及对中欧经贸关系的影响

欧债危机发生以来,欧盟经济饱受债务危机之害,经济严重下滑,失业率节节攀升。为了刺激经济发展,欧盟对其贸易政策做了一系列调整,影响了中欧经贸关系的发展。本文总结了欧债危机发生后欧盟贸易政策的发展趋势,分析了其贸易政策变化对中欧经贸关系的影响,进而提出加强与欧盟沟通、积极进行自贸区谈判等对策,以促进中欧经贸关系的发展。