Friday, May. 16, 1969

A Nordic Common Market

Neighborly cooperation is a Nordic tradition, and Scandinavia's parliamentary representatives meet annually to coordinate their countries' laws. Doctors or teachers can practice anywhere in Scandinavia. Citizens move freely across borders, and criminals sentenced in another country can even serve their jail terms in their homeland. Now, Sweden, Denmark, Norway and Finland are moving to carry their friendship a step further by creating Nordek--a Nordic economic community.

Last week Swedish Prime Minister Tage Erlander, a major supporter of Nordek, met at his country estate with President Urho Kekkonen and Prime Minister Mauno Koivisto of Finland. Their decision--to push ahead with the year-old negotiations to bring Nordek into being--reflected a realization that, despite Charles de Gaulle's departure, Europe is far from becoming one grand market.

Nordek will introduce a third grouping into the European economic picture. With a population of 21 million and a combined gross national product of $50 billion, the four countries already constitute the European Common Market's second largest customer after the U.S. Under Nordek, they will remain in the seven-member European Free Trade Association,* through which four-fifths of intra-Scandinavian trade currently passes duty-free. They plan to establish a customs union that will free all trade among Nordic countries and enact common external tariffs against non-EFTA members. Most important, they will work toward closer economic integration, including completely unrestricted flows of capital across borders.

The negotiations mean something different to each of the participants. The Norwegians hope that Nordek will stabilize prices for their troubled fishing industry, which is suffering from growing competition. The Danes look to it for ways to reduce their staggering farm surpluses. The Finns see Nordek as a means of strengthening their commercial ties with the rest of Scandinavia and reducing their uneasy dependence on the Soviet Union. As for the Swedes, they see it as a way of broadening their powerful industrial base and moving deeper into the Russian market by way of Finland.

* EFTA members are Denmark, Norway, Sweden, Austria, Switzerland, Portugal and the United Kingdom. Finland is an associate member.

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