America’s China Policy Is Not Working
The Dangers of a Broad Decoupling
WHEN reading articles on Finland in American and other Western publications, I have found that to many foreign observers Finland seems to be a puzzling phenomenon. To some, the existence of an independent neutral state, a Western democracy, next door to the Soviet Union, maintaining its freedom in friendship with, not in defiance of, its powerful neighbor, appears in itself to be a paradox. In any case, none of the conventional labels of international politics quite fits the position of Finland. As a result it is usually described as "exceptional." But an exception from what? The phrase implies that Finland somehow has evaded her predetermined place in the scheme of things, and in fact many an analysis of the Finnish situation has been devoted to seeking an answer to the question why the situation is not different. This approach is bound to lead astray. For the pattern from which Finland is thought to have deviated is constructed from the course of events in countries with which Finland never has had much in common. The mystery resolves itself, I believe, when developments in Finland are examined, not in the light of what has happened elsewhere in very different circumstances, but against the background of her own experiences and circumstances.
The foreign policy of a small nation can have but one purpose: the safeguarding of its independence and security. The means employed to this end must be adapted to circumstances over which it can have only marginal control. In 150 years of nationhood the Finnish people have used a variety of means to protect their self-determination and their identity. Yet throughout, one central idea has dominated Finnish thinking on foreign affairs. This is the idea of neutrality.
I know, of course, that strictly speaking neutrality as a legal concept has no meaning except in time of war. In today's language of international politics, however, it means different things to different nations; among all the states calling themselves neutral it would be hard to point to a single pair of identical twins. When I write of Finland's neutrality I mean a policy of maintaining the security of the country by keeping it outside the conflicts of interests of the big powers, rather than by aligning it with one big power or a group of powers against another. This idea of neutrality is not the product of abstract thought nor is it imported from elsewhere: it has grown out of the soil of Finnish history.
As I have no space for a detailed historical analysis, I shall limit myself to a few points that may help in understanding the present. The experiences of the Second World War, above all, have had a profound influence on Finland's present position and policy. On the eve of the war, the neutrality of Finland was closely linked to an association with the other Scandinavian states. Scandinavian coöperation never developed into a defensive alliance; but it was thought to offer the kind of security that is afforded by protective coloration: the hope was, as the then Swedish Foreign Minister, Richard Sandler, once put it, that "the general staffs of the big powers would leave the Scandinavian states out of their calculations—for or against."
This hope was shattered in 1939-40. Most people in the West, I believe, still remember Finland's struggle during that winter and I hardly need go into it in any detail. But it may have been forgotten that, though Finland at first appealed for outside aid, in the end her government chose to accept the Soviet peace terms, harsh as they appeared, rather than rely on the military assistance offered by Britain and France. This decision was based partly on a realistic appraisal of the possible efficacy of Allied aid: it was feared to be too little and too late. But it was also due to an almost instinctive reluctance to allow the country to become involved in the conflict between the big powers.
Similarly in 1941-44, when Finland through the German invasion of Russia was once again drawn into war against the Soviet Union, the Finnish Government rejected all German proposals for agreements of a political character. Finland was a co-belligerent, not an ally, of Germany, and refused to take part in operations, such as the attack on Leningrad, that served German rather than Finnish war aims. Thus Finland, while at war with one of the powers involved in the Second World War, wished to disassociate herself from the conflict between Germany and the Allied powers. The fine distinctions of the Finnish case were perhaps not fully appreciated by public opinion at the time. But the separate character of the Finnish war was recognized by the United States, which refrained from declaring war on Finland, and by implication even by the Soviet Government, which abandoned the claim for unconditional surrender and resorted to a negotiated armistice in September 1944.
Finland emerged from the war a crippled nation. Close to 100,000 young men, out of a population of 4,000,000, had been killed in action. More than one-tenth of her territory had to be ceded to the Soviet Union, and the entire population of these areas, nearly half a million, had chosen to move west of the new frontier where they had to be provided with new homes, farms and jobs. Industry had to gear itself to paying off a war indemnity which in eight years required deliveries of goods worth more than half a billion dollars at current prices. The German troops that had used Northern Finland as their base of operations had to be expelled. The Porkkala Peninsula close to Helsinki had to be leased to the Soviet Union for use as a naval base, and in the capital itself an Allied Control Commission watched over the observance of the armistice terms. Few outside Finland at that time were prepared to invest much in her future.
And yet the basis for Finnish independence and democracy had remained undamaged. Finland had been defeated but not conquered. Apart from Britain and the Soviet Union, Finland was the only one of the European nations involved in the Second World War to avert a foreign occupation. The continuity of her political institutions was unbroken. Her social fabric was intact. On this basis it was possible to build anew.
The course of Finnish policy in the years that followed was determined by the lessons of the war. Scandinavian coöperation, as vitally important as it had been and still is, had failed to provide security. The Western Allies had proved incapable of extending their power to the eastern shores of the Baltic; in Yalta they had assigned Finland to the Soviet sphere of influence. It had become apparent that it would be mortally dangerous for Finland to serve as a forward post of an anti-Soviet coalition, first to be overrun in case of conflict, yet without any real influence over decisions on the issue of war or peace. Thus necessity as well as tradition pointed to a return to aloofness from the conflicts and controversies between the big powers.
But there could be no return to prewar attitudes. The failure of neutrality in 1939 had been due primarily to the profound mutual distrust that had then prevailed between Finland and the Soviet Union. The Soviet Government at that time had had no faith in Finnish neutrality; it had suspected that Finland, voluntarily or as a result of pressure, might have allowed Germany to use her territory as a base of aggression against Russia. The foremost task of Finland's postwar policy, therefore, was to gain and secure Soviet confidence in Finland as a peaceful neighbor. This confidence was seen as the key to the security of a neutral Finland.
Such is the background to the policy evolved under the leadership of the late Juho Kusti Paasikivi, President of Finland from 1946 until his retirement in 1956, and continued by his successor, President Urho Kekkonen. One of the basic elements in this policy is the strict observance by Finland of all treaty obligations assumed by her. An outstanding example of this was the paying of the war indemnity in full and on time. A more permanent obligation is contained in the Finnish-Soviet Treaty of Friendship of 1948, which expresses Finland's determination to prevent the use of her territory as a route or a base of aggression against the Soviet Union. The Soviet Government, on its part, in the preamble to the Treaty recognizes Finland's desire to stay outside the conflicts of interests between the big powers—that is, her neutrality.
Purists may object that the commitments undertaken by Finland in the Treaty are incompatible with a neutral status. It must be remembered, however, that these commitments apply solely to the defense of Finland's own territory. In this the Treaty is unique among the numerous security arrangements made by the big powers, and it is worth noting that an authoritative Soviet commentary has called it an agreement for the guarantee of neutrality to distinguish it from the mutual assistance pacts the Soviet Union has concluded with other countries. From the point of view of the theory of neutrality, this may be an unorthodox interpretation. But the Treaty reflects the reality of the Finnish situation. It is indispensable for the creation of the confidence without which the neutrality of Finland would be built on sand.
On several occasions in the past years the Soviet Government has declared its respect for the neutrality of Finland. Recognition has not remained one-sided. In October 1960, for instance, a spokesman for the United States, the then Deputy Under Secretary of State, Mr. Livingston Merchant, in a speech on the occasion of the dedication of an American postage stamp commemorating Marshal Mannerheim, stated that "the United States understood the reasons why Finland had adopted a policy of neutrality. . . . This policy will be scrupulously respected," he said. "We appreciate that Finland is bound to treaty commitments. In supporting the desire for which Mannerheim stood, that Finland work out its own future in its own way, we believe it to be the responsibility of all nations to avoid interference in Finland's affairs." Mr. Merchant also said that "United States policies were designed to foster good relations with Finland and strengthen the bonds which link Finland with countries dedicated to similar concepts of democracy and independence." At the end of President Kekkonen's visit to Britain in May, the British Government also "expressed their understanding of Finland's policy of neutrality."
The statements I have quoted defined and formally confirmed what I have found to be the established practice of the American as well as other Western governments. Western interests, as far as I have been able to judge, have in no way clashed with the friendly relations that exist between Finland and the Soviet Union. Indeed, within the self-imposed limits of her neutral policy, Finland has been able to develop her relations with the West more fully than ever before. A demonstration of this can be seen in President Kekkonen's schedule of foreign visits this year: during this spring he has visited Norway and Britain and he has accepted invitations from the President of the United States and the Governments of Austria and Canada to visit their countries later this year. No President of Finland has ever before made an official visit to other than neighboring countries, and the invitations from the other side of the Atlantic have particularly impressed public opinion in Finland as gestures of friendship for the Finnish people and expressions of understanding for the position of Finland as it is today.
I have referred to the limits that neutrality imposes on Finland's relations with other countries. Obviously she has refrained from joining any military alliances. She has also stayed away from other international associations that can be regarded as instruments of big-power policies. It is equally obvious that Finland refuses to take sides in the controversies of the cold war. An illustration of this is her attitude to the German question. While no agreement on the solution of this question exists between the powers principally concerned, Finland recognizes neither the Federal Republic of Germany nor the German Democratic Republic; instead of maintaining diplomatic relations with the German states, Finland has placed only trade missions in both.
Finnish policy in the United Nations naturally reflects the attitudes I have mentioned. This does not, however, mean a sterile withdrawal from international life. The Finnish delegation at the U.N. has always been prepared to support practicable proposals designed to narrow differences and advance the cause of conciliation; it has consistently adhered to the view that the world organization must be used primarily as an instrument of negotiation, rather than as a tribunal whose majority rulings too often prove to be unenforceable. Finland has also actively taken part in the constructive work of the U.N., by sending troops to the Suez, for instance, and by making her modest, though increasing, contribution to assistance programs.
Within the U.N. Finland is recognized as a member of the Scandinavian group. (I use here this term, rather than the less familiar Nordic, to cover Denmark, Finland, Iceland, Norway and Sweden.) This is not of course a bloc that would act uniformly in all circumstances, or even strive to achieve a common line of action. Geography as well as recent history has divided the Scandinavian nations in their quest for security: Denmark, Iceland and Norway have joined NATO, Sweden and Finland have chosen neutrality. Yet they have found it possible and useful to continue close consultations, both within the U.N. and outside. The five Foreign Ministers meet regularly twice a year, and more often than not find themselves thinking alike on many international problems. There is what I would like to call a Scandinavian point of view that transcends the differences of policy.
Scandinavian coöperation has received less publicity than many other forms of international effort, perhaps because it has been carried out in an undramatic manner, without a grand design based on federative ideals. It can be fairly claimed, however, that through this pragmatic approach a higher degree of integration has been achieved in many matters intimately affecting the lives of the citizens than in practically any other area of the world. I shall mention only a few examples to illustrate my point. One is the establishment of the Nordic Passport Union: within its borders citizens of the Scandinavian states can travel without any hindrance, while for outsiders passport control is exercised only at the outer frontiers. Another example is the common labor market that has been in existence since 1954: there is no restriction on the free movement of manpower from one Scandinavian country to another. For Finland this has meant that large numbers of workers have moved over to Sweden for periods of varying length. Further, an equalization of social benefits and rights has been carried out enabling citizens of the Scandinavian countries to enjoy the same social rights wherever within the area they may reside. Legislation on matters of common interest is constantly being unified. And the Nordic Council, the joint organ of the five parliaments, is considering literally scores of new proposals for coöperation in a great variety of fields at each annual session. It has been aptly said that in important respects we are today citizens of Scandinavia as well as of our own countries.
In the economic sphere, Scandinavian coöperation has been perhaps least successful. A plan for a Nordic customs union comprising Denmark, Finland, Norway and Sweden was worked out in years of negotiation and study, but it was superseded in the summer of 1959 by the projected European Free Trade Association, in the planning of which Denmark, Norway and Sweden participated from the beginning. In this situation Finland faced a difficult and complex problem affecting its vital trading interest. The way this was solved may well serve as an illustration of Finland's special position in general.
Three-fifths of Finland's total exports, chiefly wood and wood products, are sold in the 13 countries comprising EFTA and the European Economic Community, about equally divided between the two. Whereas in relation to the E.E.C. Finland is in no worse a position than her chief competitors, the EFTA includes on the one hand her biggest customer, Britain, and on the other hand her chief competitors in the export of wood-processing goods—Sweden, Norway and Austria. It was immediately apparent, therefore, that to remain outside EFTA would decisively weaken Finland's competitive position in the British market, and this would endanger the large-scale investments made in the wood-processing industries, as well as generally impair the prospects of Finland's foreign trade. For this reason the Finnish Government at an early stage declared its interest in the talks on the free trade plan, and in the fall of 1959 it entered into negotiations with the members of EFTA with a view to protecting its commercial interests.
It was made clear by the Finnish Government at the outset, however, that any arrangement that could be made with EFTA would have to be compatible with Finland's commercial interests in other areas and her treaty obligations toward third countries. Roughly one-fifth of Finland's trade is conducted on a bilateral basis with East European countries, notably the Soviet Union. In 1959 Finland's exports to the Soviet Union amounted to 16.8 percent of the total value of exports, and close to two-thirds of the goods sold to the Soviet Union consisted of machines, appliances and transportation equipment. While only 7 percent of all wood and wood products exported went to the Soviet Union, the Soviet share of the export of metal and engineering products was as high as 72 percent. These figures indicate the importance of the Soviet Union as a market for Finland's metal-using industries. And in order to retain this market Finland must be able to maintain imports from Russia at roughly the level of exports.
For this reason the Finnish Government in its negotiations with EFTA sought and obtained the right to retain in force some quantitative import restrictions, mainly in regard to imports of liquid and solid fuels as well as fertilizers, so as to be able to ensure the continuity of purchases of such commodities from the Soviet Union. A more difficult problem, however, was created by the fact that the Finnish-Soviet trade agreement contains a most-favored-nations clause. Since the Soviet Union is not a member of GATT, and thus is not bound to accept the limitations imposed by membership in a free trade area or a customs union upon the operations of such a clause, its juridical validity was beyond dispute. Actually only a small part of imports from the Soviet Union would have been affected by tariff reductions to be granted to EFTA countries, for the bulk of purchases from the Soviet Union consists of raw materials and other duty-free commodities. But an important issue of principle was involved, and the Finnish Government on its part, in keeping with its established policy, sought to reach a negotiated solution acceptable to both rather than unilaterally to abrogate a valid contract. In November 1960, in connection with President Kekkonen's visit to Moscow, an agreement was finally concluded by which Finland, with reference to the neighborly relations existing between the two countries, in effect accords goods imported from the Soviet Union the same customs benefits as those imported from EFTA.
The negotiations with the EFTA countries were concluded in March 1961, when an agreement establishing a new free trade area composed of the original Seven and Finland was signed in Helsinki, to become effective July 1, 1961. In it Finland has the same rights and obligations as the EFTA countries have to one another, with some exceptions made for the protection of specially vulnerable branches of Finnish industry. The agreement will be administered by a Joint Council on which each country, including Finland, has a representative; it will have the same tasks as the EFTA Council in regard to the EFTA Convention.
This solution is entirely in keeping with the original aims of Finnish policy: it assures the continuity of Finland's exports to their principal markets in the West without conflicting with her trading interests in the East. In the protracted negotiations the Finnish case met with understanding both in Moscow and in the EFTA capitals. During his visit to Helsinki in September 1960, Prime Minister Khrushchev expressed his understanding for Finland's desire to maintain her position in Western markets; in fact the Finnish-Soviet agreement on tariffs had no purpose other than making it possible for Finland to associate herself with EFTA. The governments of the EFTA countries on their side made considerable concessions to enable Finland to achieve the solution she desired. For Finland the success of the negotiations was vitally important, but there may be even wider significance in the fact that a neutral nation has been able to maintain its trading relations across the lines of rival blocs.
Neutrality cannot of course be an end in itself. It is, as I pointed out in the beginning of this article, the means by which Finland traditionally has sought to safeguard her security and thus to protect her national way of life. "I am convinced," President Kekkonen declared in a speech during Mr. Khrushchev's recent visit to Helsinki, "that even if all the rest of Europe were to turn to Communism, Finland would retain the traditional democracy of the North if the majority of the Finnish people so desired, as I believe it does." We are not neutral in regard to the values on which our way of life is built. Though we have learnt to desist from indulging in the luxury of emotional gestures, we are none the less as determined as any nation to preserve these values.