Jakob Gustavsson Lund Political Studies 105 THE POLITICS OF FOREIGN POLICY CHANGE EXPLAINING THE SWEDISH REORIENTATION ON EC MEMBERSHIP THE POLITICS OF FOREIGN POLICY CHANGE Explaining the Swedish Reorientation on EC Membership THE POLITICS OF FOREIGN POLICY CHANGE The 1990s has been characterized by profound changes in world affairs. While numerous states have chosen to redirect their foreign policy orientations, political scientists have been slow to study how such processes take place. Drawing on the limited earlier research that does exist in this field, this study presents an alternative explanatory model of foreign policy change, arguing that a new policy is adopted when changes in fundamental structural conditions coincide with strategic political agency, and a crisis of some kind. The model is applied to the Swedish government’s decision in October 1990 to restructure its relationship to the West European integra- tion process and advocate an application for EC membership. As such it constitutes the first in-depth study of what is perhaps the most important political decision in Swedish postwar history. The author provides a thorough examination of the prevailing political and economic conditions, as well as an insightful analysis of the government’s internal decision-making process, emphasizing in particular the strategic behavior of Prime Minister Ingvar Carlsson. Lund University Press Chartwell-Bratt Ltd Jakob Box 141, SE-221 00 Lund, Sweden Old Orchard, Bickley Road, Gustavsson Art. nr. Bromley, Kent BR1 2NE ISSN England ISBN ISBN CONTENTS Acknowledgments iv Abbreviations vi Tables and Figures viii PART I INTRODUCTION Chapter 1 A Study of Foreign Policy Change 2 Aims and Questions 2 Methodological Considerations 5 Material 9 Earlier Research on Sweden and the West European Integration Process 11 Organization of the Study 14 Chapter 2 The Model 16 Foreign Policy as a Field of Research 16 The Study of Foreign Policy Change 18 Outlining the Model 22 PART II SWEDEN AND WEST EUROPEAN INTEGRATION Chapter 3 Swedish Integration Policy 1945-1972 29 Sovereignty and Prosperity: 1945-1959 30 Politicization and Association: 1961-1967 38 Advancement and Retreat: 1967-1972 44 Chapter 4 The Return of the European Question 1987-1990 55 The Revival of the Integration Process 56 How Did Sweden Respond? 59 From EEA to Membership 61 i PART III SOURCES OF CHANGE Chapter 5 International Political Factors: The End of the Cold War 68 Neutrality in Theory and Practice 69 System Change and Sweden’s Relative Decline 75 The Institutionalization of Swedish Neutrality 87 Conclusion 96 Chapter 6 International Economic Factors: The EEA Negotiations 97 Structural Preconditions: Actors, Interests, and Power 98 The Negotiation Process: Diagnosis, Formula, and Details 103 Implications for Swedish EC Policy 112 Chapter 7 Domestic Factors: Sweden at the End of the Third Road 116 The Policy of the Third Road 117 Why Did the Third Road Come to an End? 121 Implications for Swedish EC Policy 133 PART IV COGNITION AND PROCESS Chapter 8 The Individual Decision-Maker: Carlsson’s Learning Process 141 A Model of Learning 141 What Were Carlsson’s New Beliefs? 144 Where Did They Come From? 153 Phases in Carlsson’s Learning Process 163 Ideas versus Interests 165 Chapter 9 The Decision-Making Process: Politics Within the Cabinet 170 Decision-Making in the Swedish Cabinet 171 Forming the Carlsson-Larsson Coalition 173 The Politics of Framing: The October Crisis 177 ii The Politics of Exclusion: How Andersson and Gradin Were Overruled 182 The Footnote Debate 186 PART V CONCLUSION Chapter 10 Explaining Foreign Policy Change 189 Changing Position on EC Membership 189 Implications for the Study of Foreign Policy Change 195 Bibliography 199 iii ACKNOWLEDGMENTS Plus ça change, plus c’est la même chose. While the French proverb carries great wisdom, it is not always correct—things actually do change. This book has certainly changed from all support and advice that I have received along the way. As I have had the privilege to be part of two vibrant research environments, the Department of Political Science at Lund University and the Swedish Institute of International Affairs (SIIA), my debts are unusually large. Serving as my dissertation advisor, Associate Professor Magnus Jerneck has been my main intellectual soun- ding board, sharing his extensive knowledge and good judg- ment. Jerneck is one of those truly academic persons who refu- ses to break up from an intellectual discussion before a solution the problem has been found. His attitude sets a fine example to someone new in the game of research and teaching. Over the years, Professors Christer Jönsson and Lars-Göran Stenelo have encouraged and supported my work in various ways. I am indebted to a number of other colleagues and friends from the department in Lund: Jan Andersson, Björn Badersten, Björn Beckman, Rikard Bengtsson, Caroline Boussard, Ole Elgström, Magnus Ericsson, Martin Hall, Patrik Hall, Matts Hansson, Karl Magnus Johansson, Kristina Jönsson, Per Larsson, Ingvar Mattson, Marie Månsson, Annika Mårtensson, Teresia Rindefjäll, Anders Sannerstedt, Kristian Sjövik, Mikael Spång, Kristian Steiner, Maria Strömvik, Peter Söderholm, Jonas Tallberg, Anders Uhlin, and many more. Due to my stays at the SIIA in Stockholm, to which I regularly commuted 1994-1997, I have benefited from the wisdom and friendship of Lidija Babic- Odlander, Peter Bröms, Ingemar Dörfer, Diana Madunic, Magnus Ekengren, Paul ’t Hart, Gunilla Herolf, Marieke Kleiboer, Rutger Lindahl, Erik Noreen, Charles Parker, Erik Ringmar, Gunnar Sjöstedt, Lisa van Well, and Mike Winnerstig. Bengt Sundelius deserves a special mentioning for sharing his excellent insights into the theoretical and empirical topics of this study. iv In the painstaking finishing phase, a number of people have been particularly helpful by reading and commenting on various drafts. These are, first of all, Martin Hall and Leif Johansson, who gave extensive comments on the whole manuscript at my final seminar, as well as Bo Bjurulf, Sverker Gustavsson, Hans Hegeland, Lars Jonung, Nils Stiernquist, Jonas Tallberg, Rasha Torstensson and Torbjörn Vallinder. Maria Strömvik provided important criticism and invaluable assistance with the editing. Charles Parker proof-read the manuscript and made a number of useful suggestions on substantive matters. Jonas Johansson and Josefin Grennert put other things aside to help out with the references on short notice. Special thanks are also due to the key actors who found time for being interviewed. Without the information obtained this way, parts of the study could not have been made. During three and a half years, my work was fi- nanced by a generous grant from the SIIA’s Special Program on Foreign and Security Policy Studies. For this I express my deep gratitude. Life as a graduate student is filled with intellectual joys and ir- resistible challenges. Yet there are also moments of despair. In times of trouble, I have found comfort with the Tuesday Club. Caroline and Maria, who make up two thirds of this exclusive association, have patiently listened to my worries and enthusi- astically contributed with their own. My parents have always supported my career choices, the ice hockey rink as well as the seminar room. I dedicate this book to them. Lund in March 1998 v ABBREVIATIONS ATP Allmän tjänstepension CAP Common Agricultural Policy CFP Comparative Foreign Policy CFSP Common Foreign and Security Policy CMEA Council of Mutual Economic Assistance COCOM Coordinating Committee for Multilateral Export Controls CSCE Conference on Security and Cooperation in Europe DG Directorate General DN Dagens Nyheter EC European Community ECE Economic Commission for Europe ECJ European Court of Justice ECSC European Coal and Steel Community EDC European Defense Community EEA European Economic Area EEC European Economic Community EC European Community EU European Union EFTA European Free Trade Association EMU European Monetary Union EPC European Political Cooperation Euratom European Atomic Energy Community FCMA Treaty of Friendship, Cooperation and Mutual Assistance FDI Foreign Direct Investment FPA Foreign Policy Analysis FSI Federation of Swedish Industries FTA Free Trade Agreement GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GNP Gross National Product HLCG High Level Contact Group HLNG High Level Negotiation Group IBRD International Bank for Reconstruction and Development vi IMF International Monetary Fund INF Intermediate Range Nuclear Forces IR International Relations LO Landsorganisationen NATO North Atlantic Treaty Organization NG Negotiation Group OECD Organization for Economic Cooperation and Development OEEC Organization for European Economic Cooperation PSOE Partido Socialista Obrero Espanol SAF Svenska arbetsgivareföreningen SAP Sveriges socialdemokratiska arbetareparti SCB Statistiska centralbyrån SEA Single European Act SIPRI Stockholm International Peace Research Institute SNS Studieförbundet Näringsliv och Samhälle SPÖ Sozialdemokratischen Partei Österreichs SvD Svenska Dagbladet TCO Tjänstemännens centralorganisation UN United Nations WEU West European Union WFTA Wider Free Trade Area WG Working Group ÖVP Österreichische Volkspartei vii TABLES AND FIGURES Table 1 Swedish military defense expenditure, percent of GDP 79 Table 2 GDP per capita, US $, current prices and exchange Rates 79 Table 3 Sweden’s international trade distributed on groups of countries, percent of total exports and imports 81 Table 4 Swedish outward