YOU ARE HERE: LAT HomeCollections

Finns Seek to Bolster Soviet Trade Links : Russia Looks to West for Other Partners

December 30, 1985|United Press International

HELSINKI — Finnish businessmen are scrambling to shore up their special trade relationship with the Soviet Union now that Mikhail Gorbachev is firmly in power.

As the Soviet Union's oldest Western trade partner, Finland has established a special--even privileged--relationship through barter trade, personal contacts and hard-won knowledge of its superpower neighbor.

But Finnish businessmen say they fear Gorbachev's advent may change this close relationship. As the Eastern giant looks for other trade partners in the West, Finnish traders in Moscow are meeting new faces.

"As almost the whole regime has changed in Gorbachev's Russia, that might not necessarily threaten our trade," said Kauko Rastas, head of Polar, Finland's biggest construction company. "But it certainly means a lot of work for us."

The changes have resulted in more trips to Moscow by Finnish executives and in brisker, more businesslike meetings with their Soviet counterparts.

"Pack your razor and pajamas and fly to Moscow," advises Rastas, a veteran member of the Finno-Soviet trade commission, to those who want to maintain the special trade relationship.

"We must remember that the U.S.S.R. is a superpower, so the initiative has to come from us."

Enemies During War

It is difficult to find more disparate neighbors than the Communist giant and tiny, capitalist Finland--two countries that fought each other in World War II.

Since fully repaying its war reparations to Moscow in 1952, Finland has exported to the Soviet Union everything from clothing and foodstuffs to fully built "turnkey" plants, special ships and oil rigs.

In their part of the barter trade, the Russians deliver crude oil, timber, gas and other raw materials through special clearing accounts.

But in a sign of changing times, the Soviet Union recently announced that it will deliver only 7 million tons of oil to Finland this year, 1 million tons short of the contract.

Neste, Finland's state-owned oil company, was forced to buy the balance on non-communist markets.

Finland is often said to have her head facing East but her heart in the West. Although two-thirds of Finland's foreign trade goes to Western Europe and North America, the Soviet Union remains her biggest individual trading partner.

Until the 1973 oil crisis, business with the Soviets amounted to 10% of Finland's foreign trade.

Trade Jumped, Fell

Ten years later, rising oil prices and a strong dollar caused this figure to leap to almost 30% of Finland's foreign trade. It then dropped to a current 20%.

Offsetting cyclical slumps in Western trade by increased sales to the Soviet Union, Finland's economy grew while Western economies stagnated. One foreign observer said the Finns "turned their Soviet trade into a fine art."

Now Finnish industry worries that the new, more competitive attitude in Moscow may place even higher demands on this fine art.

The new Soviet regime represents a far more complicated challenge for diversified, highly technical and sophisticated Finnish industry.

While the Finns are used to bartering goods for goods through the clearing system, they may now have to sell goods for free currency. An apparent simplification, in reality such a change would cause problems for the Finns.

Much of Finland's trade with Moscow comes as long-term goods like construction projects, while Soviet exports to Finland are short-term goods like crude oil.

Changing from the barter system to straight buying and selling would create difficulties for financing long-term projects like the Kostamus project, a town of 50,000 completed by Polar and other Finnish construction companies this year.

Los Angeles Times Articles