THE FORMATION OF THE BALTIC CLAUSE. A FINNISH INITIATIVE

Abstract

The Baltic Clause was a special arrangement in Baltic trade policy during the interwar period. By adding the clause to their trade treaties, the Baltic states aimed to secure the special customs privileges they had granted or would grant to each other. In the long term, at least in the cases of Estonia and Latvia, the aim was to extend this principle towards a customs union. The underlying reasons for such measures were, of course, economic. Just a few years earlier the small countries abutting the eastern shores of the Baltic Sea had been part of the same colossal economy. By creating a system of regional preferences, the newly independent countries were actually trying to simulate and compensate for the old system. Re-aligning the economy was a central part of the transition process that took place during the first years of Baltic independence. The plans also had a political dimension and were connected to Baltic cooperation and later the Baltic Entente. The history of the Baltic Clause has been written mostly from the Estonian and Latvian viewpoints. This is understandable because at the beginning of the 1930s the clause became an official part of Estonian and Latvian foreign trade policies. In my paper I will show that, for Finland, the Baltic Clause was originally not so much a door to a customs union as a means of gaining similar advantages without the political burden of such a union. However, due to the lack of economic connections Finland chose not to use the Baltic Clause in her trade treaties. The paper is mostly based on archival materials from the Estonian National Archives and the archives of the Ministry for Foreign Affairs of Finland. The author is preparing a doctoral thesis on Finno-Estonian economic relations during the interwar period.