FORUM

Nordic Integration at the Cross-Road

The debate on a Scandinavian Economic Union has now entered its final stage. Pros and cons are subsequently reviewed by , and .

More Intra-Nordic Trade within a Customs Union

Interview with Gunnar Lange, Swedish Minister of Commerce, Stockholm

QUESTION: Mr Lange, dur- the organisations and institu- had, first before EFTA and then ing July of this year there has tions of our country. We will within the framework of EFTA, we been another meeting of the first have a discussion in the have never been more coordinat- countries engaged in the crea- open, in order to have a better ed in our views than we are now. tion of a Nordic Economic basis for the statement of our I would say that there is a Union. Here again, as in the own position. majority for a Nordic Economic past, the difference of opinions Union in each country. Majority for Economic Union of Denmark, Norway, Sweden QUESTION: The membership and became clear. How QUESTION: Do you think that of Finland in the Nordic Eco- do you judge the possibilities the political will to create a nomic Union represents a prob- for arriving at a common de- Nordic Economic Union actually lem, due to its close links to nominator in the question of exists in all countries that are the USSR. And Iceland would Nordic integration? participating in the talks? need special concessions be- ANSWER: I think that we have cause of its economic structure. to realise that in many respects ANSWER: Yes, in all coun- Do you believe that the Nordic the work in the Committee of tries! But this doesn't mean that Economic Union will have a Nordic Officials has been very the opinion in each country is positive effect on Finland and successful. There are very unanimous. There are those who Iceland? few-although, I admit, impor- are critical with regard to a ANSWER: First of all, Finland tant-points outstanding that will Nordic Economic Union in has seriously agreed to ne- have to be sortened out. The Sweden. And I am aware of the gotiate a closer economic co- Swedish Government as such has fact that there is more of a operation in the North. I don't not yet taken a position on the hesitancy in Denmark and in think it would have done so, draft treaty presented by the certain quarters of Norway. But unless its government realises Commission. We want to hear in the long cooperation we have that this collaboration offers op-

306 INTERECONOMICS, No. 10, 1969 portunities for this country it ANSWER: Well, this is a ques- competitive in some fields. Cer- otherwise would not get. tion of how fast we can move. tainly the fears that Swedish in- With respect to Iceland, we The Customs Union cannot en- dustrial strength could slow shall have to observe that it ter into effect before 1972, I down the economic develop- has not indicated its definite in- would say. But then in many ment in our neighbour countries terest in joining a Nordic Eco- items there is no need for a have been unfounded. temporary arrangement after nomic Union within EFTA, but QUESTION: An argument only its readiness to enter 1972. There we can take the step at that date as the differ- brought forward to substantiate EFTA. But already EFTA would the Customs Union is the thesis bring to Iceland some benefits, ences in tariffs are rather in- significant. In some fields, as that a harmonisation of tariffs if special provisions are agreed to the level of EL(3 tariffs would upon, particularly in the fishing for example iron and steel, and chemicals, we will have to dis- strengthen the position of the sector. cuss transitional arrangements. Nordic countries when mem- bership to the EEC becomes Expanded Intra-Nordlc Trade I admit that our interests are not exactly the same here, since relevant. But wouldn't the Cus- QUESTION: The creation of some of us would like to have toms Union bring forward a spe- EFTA increased the trade re- a rather short transitional period, cialisation within Scandinavia lations between the Scandina- while others would like to see that would perhaps make it even vian countries considerably. it prolonged. However, what more difficult for the four coun- Would you say that a Customs we on the Swedish side are op- tries to join the EEC? Union would again expand in- posed to is an indefinite post- ANSWER: I don't agree with tra-Nordic trade substantially? ponement of the date at which this. As a matter of fact, I think the Customs Union will cover ANSWER: I think it's very dif- that both we, if we succeed in the whole trade field of in- ficult to say anything definite creating a Customs Union, and dustrial products. We want the on this. The intra-Nordic trade the EEC stand to benefit from final date agreed upon now. trend is still moving upwards. it. It must be in the in- But, of course, the speed could terest of the EEC to have Fears of Over-saturation be higher within a Customs strong trade partners. And Scan- Unfounded Union. Then businessmen could dinavia stands stronger if it take closer cooperation into ac- QUESTION: If the Nordic Eco- stands together. But economic count, when drawing up their nomic Union comes into effect, integration is not limited to plans-investment plans, plans it will comprise a market of trade alone; it also comprises for economic cooperation, joint about 22 mn consumers. Is there cooperation in production and venture plans, and so on. a danger for the remaining many other sectors. Therefore I QUESTION: Sweden would countries of an over-saturation think a Customs Union in Scan- like the establishment of a with industrial products made dinavia must be as much in the Customs Union by the end of in Sweden? interest of the EEC as in our 1972. Denmark, on the other interest, if the EEC wants to ANSWER: That was partly hand, proposes a far longer extend its cooperation in one feared before EFTA was creat- transitional period, while Norway form or another to other coun- ed. Today everyone admits in is inclined towards a compro- tries now remaining outside of it. mise. Why have you proposed Denmark, Norway as well as in that the Customs Union should Finland that this has not been QUESTION: Denmark has stat- come into effect by 1972? the case. They have been very ed that it will join the Cus-

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INTERECONOMICS, No. 10, 1969 307 toms Union if at the same time Therefore our contribution to rather mature economically to a solution is found in the agrar- the costs must remain within take part in an endeavour of ian sector. Sweden has always realistic realms. far reaching cooperation in the tried to separate these two economic field, as represented fields very clearly. Why is Swe- Cooperation in Other Fields by the EEC. The only require- den against a Common Agrar- ment that we mean must neces- ian Market? QUESTION: The establishment sarily be fulfilled is that we will of an atomic syndicate and under no condition deviate from ANSWER: This question closer research cooperation our neutrality policy, as it has should be qualified slightly dif- within the Scandinavian coun- been defined and applied. If ferent, if I may say so. The tries has been discussed. What this is possible then the ques- Danes themselves realise that concrete plans have been drawn tion of the form of cooperation the solution to their agricultural up in this respect? becomes of secondary impor- problems cannot be found with- tance. And this is not only the in a Nordic Economic Union. ANSWER: This question aims position of the present Swedish They have lost markets in the at a field which is not directly Government, it is also the posi- EEC, and we cannot provide a my responsibility. All I can say tion of all political parties re- substitute for that in the North. to this is that we are still work- presented in parliament, with That the Danes realistically un- ing on these plans. Sweden has the possible exception of the derstand. But we also admit a close cooperation between in- small communist party. that a close economic coopera- dustry and the state in nuclear tion in previously defined terms research, and we have proba- QUESTION: Sweden would cannot leave agriculture entirely bly more advanced research in like to achieve about 80 p.c. self- outside. And for that reason this field than the other three sufficiency in the agrarian sec- there have been discussions countries. Nevertheless, we feel tor. Would this not mean that and negotiations on official level that in both industrial and more it would be very difficult to to find a plan for an agricultural basic research our resources achieve an arrangement with the arrangement which can be in- are too small. Therefore we EEC? cluded in the Nordic Economic would gain, if the Scandinavian Union. countries put their resources to- ANSWER: I don't think that gether. A better allocation of the aim of 80 p.c. self-sufficiency Sweden as Main Rnancler resources would be the result. is a very great problem. We have today between 90 and 100 p.c. QUESTION: Sweden has been QUESTION: A very interesting self-sufficiency. Consequently, assigned to play the role of the aspect of the Nordic Union is if there is a reduction to 80 p.c., main financier in the future the planned cooperation in de- then there will be also greater Nordic Community. Do you have velopment assistance. A joint possibilities to export agricul- any objections against the sug- committee will determine the tural products to Sweden, both gested financial arrangement yearly budget and prepare dif- for Denmark and for the EEC. within the Union? ferent projects. Will this lead to Although Sweden will not be as a more efficient aid to develop- interesting a market for outside ANSWER: That we will be the ing countries? main financial contributor to de- agricultural exports as the Unit- fray the total costs is quite nat- ANSWER: If it didn't we would ed Kingdom, it will not be self- ural, since the Swedish per leave it out. We already have sufficing. I should mention that capita GNP is higher than the some concrete examples for the farmers and their coopera- one in the other countries. So, joint ventures, for instance in tives are very enthusiatic about of course, this means that we Tanzania and Kenya, where all joining the EEC. They do not will be called upon to contribute Scandinavian countries contrib- fear joining the Community of to the funds more than any other ute to and administer the proj- the Six. single Scandinavian country. ects in question. We are there- The question is only how much, fore not planning to enter a new Relation between Nordic Union as the price can also be too path but continue on the old. and EEC high. It is very difficult to estimate the advantages or ben- Sweden and the EEC QUESTION: Should EEC- efits of the Nordic Economic membership of Norway, Den- Union; they are hard to measure. QUESTION: Could you define mark and perhaps Sweden be- We have a realistic feeling, the Swedish position with re- come reality in the near future, though, that the Union will speed gard to the willingness of the would the Nordic Economic up cooperation that before has Swedish Government to join the Union then have to be dissolved, already gone so far inside EFTA. EEC? or could it go on existing in the But the exact measurement of ANSWER: We have said all same way as the Benelux-Union these benefits is very difficult. along that we think that we are exists within the EEC?

308 INTERECONOMICS, No. 10, 1969 ANSWER: That is my opinion. ANSWER: Well, if we don't take quite some time before the If this would not be the general arrive at a Customs Union now, EEC is ready to take on new feeling I don't think there would then it is not very likely that we members and to make arrange- be such a strong wish as it will ever come to it. When one ments with other outside coun- exists now for creating a special doesn't know the exact develop- tries, if a Nordic Union does Union in the North. ment, one can only say that the not come into effect, then the chances for the creation of a QUESTION: But since Finland speed of cooperation in the Nordic Customs Union are fifty North could become slower. would in all probability not join to fifty. As a matter of fact, I the EEC, it still would be a dif- This is why I would regret if think, they are more than that. we did not succeed. ferent situation than member- So many things have been iron- ship of Benelux to the Com- ed out in the course of the munity. QUESTION: Within what peri- negotiations and discussions on od do you think that the de- ANSWER: All 3 Benelux-states official level that not very much cision for or against a Nordic remains. I admit that the out- are individual members of the Economic Union will be taken? Community, as a matter of fact. standing differences are difficult If you have the same tariff walls to overcome. They are, however, ANSWER: In my opinion the not insolvable. in the Nordic Customs Union basic decision will be taken as in a wider EEC, the prob- I think personally that we can- within a year. That does not lems would not be so difficult not afford to lose this chance mean that the whole plan will as to impede a solution. to strengthen the cooperation. become reality immediately after. There would be no catastrophe In certain fields we need tran- Chances for the Union if the Nordic Economic Union sitional periods, as I said. How- QUESTION: What would be failed. The Scandinavian co- ever, Scandinavia will decide, the consequence of the failure operation will in any case con- in one way or another, upon in the next future to arrive at a tinue to grow. But since I be- the Nordic Economic Union in Nordic Customs Union? lieve that unfortunately it will the course of the next year.

PUBLICATIONS FROM THE HAMBURG INSTITUTE FOR INTERNATIONAL ECONOMICS

New Publication

STEUERHARMONISIERUNG IN EINER WIRTSCHAFTSGEM EINSCHAFT (Tax Harmonisation in an Economic Community)

by Ingolf Melze

Within the EEC the harmonisation of the national tax systems is com- ing more and more to the fore. The present analysis first tries to clarify the ambiguous term "tax-scale harmonisation'. This is followed, among others, by a discussion on the possibilities of measuring the influence of state activity. And moreover Metze puts in the centre what had hitherto been missing in similar studies: the inclusion of the long-term effects on the competitiveness of enterprises due to differences in the imposition of taxes.

269 pages, 1969, paperbound, price DM 34.--

VE R LAG WE LTAR C H IV G M B H - HAMBURG

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