What are the advantages and disadvantages of Finland for taking part in European Union?

The motivation to discuss on the topic:
The essay will discuss the advantages and disadvantages of Finland’s participation to European Union (EU). In Taiwan, there are economists claim that Taiwan should integrate markets of Taiwan and mainland China, but there are also many economists have oppose it. It is a very important issue for Taiwanese people. Maybe Finnish experience can provide some hints to Taiwan.

Background about the relationship between Finland and EU:
The better relationship between the two super powers USA and Soviet Union in 1985 change Finland's political position in Europe. The post-war division began to melt, and Finland could leave the control of Soviet Union. Actually, In 1961, Finland stopped the progress to became a full member of European Free Trade Association (EFTA) because of Soviet Union's suspicion. For the same reason, Finland also delayed to the Council of Europe (EC) membership. After the event in 1985, Finland can take part in the European organization although the two memberships have more symbolic meaning than practice one. Because of radical reformations from the Soviet leader Gobarchev, the Eastern Europe Bloc dissolved and Soviet Union collapsed in 1991. During the period Gobarchev leaded Soviet Union, Finland normalized the relationship with Soviet Union, and Gobarchev's administration stopped interfere in domestic decisions of Finland. Gobarchev also visited Helsinki in 1989 to confirm Finnish neutrality. Finnish foreign policy had begun to change from 1985. In 1986, Finland became a full member of EFTA and a member of EC, which started to form a tighter union then, in 1989.

By early 1990s, Finnish government gave up its neutrality policy in cold-war era and joined EU after a referendum with a majority supported the move. The decision makes Finland to be one of core members of EU. The definition of Finnish relation with its eastern and southern neighbors changes now. Right now, Finland's eastern border is not run along with the Cold War frontiers.

Advantages:
On advantages, Finland can have more close relationship with the main European countries, for example, France, Germany. Actually, Finland has prosperous times from the EU membership.
Before 1991, Russia is the most important Finland‘s trade partner. One over three Finnish export products sold to Russian. However, after Soviet Union collapsed in 1991, Finland lost her most important market. The trade recession with Russia led a significant effect in Finnish risen unemployment and the depression of Finnish economics. Then, there were two significant structure changes made Finland pass away the difficulty. The first one was her success in information and communications technology (ICT) sector. The second one was that Finnish government made the decision to have closer relationship with west European countries. So, Finland started to apply to take part in European Union in 1995 and to be successful into EU in 1999. In the same year, the situation of Finnish economics waked up again and is better and better after 1995. Right now, the most trade partners of Finland are western European countries, Germany, France, UK. Russia is the fifth major trade partner of Finland. Now, in many worldwide surveys of competitiveness, Finland is in the top position.

Finnish people also can have noticeably cheaper products and foods, including pork, eggs and many daily products, which are brought by Finnish EU membership. An obvious example is the cost of cars. Traditionally, the price of cars is higher than other countries of EU. However, in 2002, the European Court said that Finland’s tax of cars imported from other EU members is too much. This event made Finnish government have to cut the tax rate of foreign cars, and Finnish people can buy imposed cars in much cheaper price. But it also makes some problems to Finland. Alcohol problem is one of them which will be mentioned in next section.

Disadvantage:
On the disadvantage, Finland’s agriculture is hurt because of cheaper agriculture product from eastern European countries. However, Finnish agriculture is hurt by the cheap products from eastern European countries. Although Finnish government has tried many approaches to support the Finnish farmers by direct payment from Finland’s budget, the average income of Finnish farmers is decreasing during those years. After Finland become an EU member, the number of Finnish farmer continue to decrease while the average number of farmer in EU is increasing constantly. EU Commission still said that the support for Finnish farmers should be decreasing and temporary.

In addition, Finland also has to open her labor market for other EU members although the unemployment remains high in Finland. Unlike Sweden, Finland open her labor market to people from the EU member countries until spring 2006. Many Estonians, for example, have gotten their jobs in Finland. Fortunately, the noticeable negative side effects seem not apparent until now. Although Finnish relatively high unemployment rate already decreases from the peak point 15% in 1995 to about 8.4% in 2005, the rate is still over the average of all EU members and continues to trouble Finnish people.

EU’s rules also make some negative effect to Finland. A typical example is the public policy of alcohol. Finland had to give up her original alcohol policy which limits the retail sale of alcohol beverage, in 2004. Because the price levels of alcohol beverage from Estonia, one of Finnish neighbor in EU, are only about 50%, Finnish consumption of alcohol beverage raised about 10% in the same year. It is so terrible that alcohol poisoning and related illness have been the major reason to makes Finnish adult men die.

Lessons that Taiwan’s people can learn from Finnish experience:
Like Finland, Taiwan has very limited natural resource. So, Taiwan depends on exports very much. Because the market in mainland China becomes more and more important for Taiwan, many economists suggest that Taiwan’s government should try to find a way to integrate markets of Taiwan and mainland China. However, the political issues make the problem more complicated. In my opinion, if we only consider economic reasons and factors, Taiwan definitely should have some cooperation or integration with the market of China based on Finnish experience. The reason is simple: if two economy body, one is small like Finland and another one is huge like EU, should integrate together. When they merge, the small one can have most advantages. However, if they don’t integrate, the small one will be hurt more than the big one.

In the case of Finland, we can see that Finland’s economy collapsed during 1991 to 1999 because of her major trade partner Soviet Union dissolved. After Finland joined EU in 1999, Finnish economy became better and better. Original, Finland wanted to have closer political and economic relationship with western European countries and applied for EFTA and EC in 1960s. But Soviet Union opposed her desire and Finland had to delay the progress. I thought that Finland can keep off the depression in 1990s if she could take part in EFTA or EC. It shows that participation of bigger economic market is very helpful for small economic in the case of Finland’s entry into EU in 1999. Actually, the members of EU didn’t have the economic problems which Finland met when Soviet Union split off. One reason is the political factor, Western European countries don’t depend on the trade with Soviet Union very much, even than didn’t have economic relationship with Soviet Union. Another reason is the members of EU integrated a big enough economic body. It makes EU can keep its members from the hurt of other economic bodies like Soviet Union or Finland.

Before integrating with bigger economic body, Taiwan should do many preparations. At least, agriculture and farmers should be pay special attention from Taiwan’s government.

Reference:
[1] Website: http://www.finnfacts.com/english