Nordic Home Market Protection Agreements – Normal State or Reconciliation Strategy?
Conference contribution, 2017
During the years 1918–1973 mutual home market protection agreements were common, for example in the Nordic forest industry. According to such agreements, each country abandoned or restricted the export of particular goods to each other’s country. These agreements are the focus of attention here and have been analysed through archival studies of individual companies, trade associations and the competition authorities. Within the export-intensive sectors, the export went primarily to non-Nordic countries. In those cases, the Nordic home market protection agreements had no apparent impact. However, agreements on home market protection were in several cases signed for goods that were domestic-market oriented and for goods that were exposed to import competition. Although the Nordic home market protection agreements infringed with the EFTA competition rules, many of them remained in force into the 1970s. Several new agreements were also signed during the late 1960s. When the 1973 free trade agreements between the EFTA states and European Communities entered into force, the Nordic home market protection agreements were officially abolished. The study shows that there were gentlemen's agreements on home market protection between the Swedish, Norwegian and Finnish companies until the end of the 1980s. In the business world home market protection was seen as a normal state. Meanwhile, infringements that resulted in conflicts were common. These were often dissolved by renewed or formalised home market protections agreements. In the domestic markets the result of the agreements was eliminated or reduced import competition. At the same time the agreements were seen as a precondition for broader Nordic export collaborations. The study shows that relatively minor offenses against the home market protection agreements could result in collapsing both domestic cartel collaborations and international export cartels.