1 Text A: Norways rise as an economic force (1) Norways geography its natural resources, the long coastline, and

d its position on the northern outskirts of Europe has shaped the countrys foreign trade. The most important exports have been fish, forest products, and shipping services, with petroleum products gaining a crucial role in the last decades of the twentieth century. Norway is a typical small open economy, where a narrow resource base has made international trade a prerequisite for economic growth and a high standard of living. TRADE BEFORE 1814 (2) Norway was ruled by Denmark until 1814, when the country was annexed by Sweden. In the fifteenth century Norway and particularly the Hanseatic kontor (office) in Bergen was an important part of the European network. Norwegian fish, primarily stockfish, was exported to Europe, and grain and salt were imported. The Hansa were gradually replaced by an indigenous bourgeoisie. Moreover, the countrys exports became more diverse. (3) New types of fish and fish products, in particular herring and salted cod, became more important. Log frames (water-powered saws) enabled a substantial increase in the export of timber from the early sixteenth century onwards. Iron, copper, and silver mines were established approximately 100 years later. Between 1660 and 1696 the size of the Norwegian merchant navy quadrupled, mainly as a result of timber exports, which demanded large amounts of cargo capacity. The shipping industry experienced a new growth spurt in the last decades of the eighteenth century. THE NINETEENTH CENTURY (4) The big three fish, timber, and shipping services made up approximately 90 percent of Norwegian exports in the first half of the nineteenth century. Although the main exports were staples, the trade had substantial repercussions for local communities. Indeed, the export industries have been characterized as the engine behind the growth of the Norwegian economy in the nineteenth century a classic case of export-led growth. Norways foreign trade was dominated by substantial imports of agricultural commodities and manufactures. (5) Due to the need to import foodstuffs, foreign trade played an important role in the Norwegian economy. Exports have constituted a larger share of gross domestic product (GDP) in Norway than in comparable countries in Scandinavia and elsewhere. The share of foreign trade (exports plus imports) in Norwegian GDP was more than 50 percent as

2 early as the mid-1840s. The dependence upon imports has also been reflected in a liberal trade policy. (6) Norways most important trading partners were Great Britain, Germany, Sweden, Russia, and Denmark. International trade liberalization has been particularly beneficial for Norway. The strong growth of international trade especially in the second half of the nineteenth century led to a substantial demand for Norwegian shipping services. This industry had close links to domestic shipbuilding during the age of sail. Following the British repeal of the Navigation Acts in 1849, Norwegian shipping assumed an even more important position internationally. By 1880 Norway had the worlds third-largest merchant marine, an impressive feat for a country, which at the time had a population of less than 2 million. THE TWENTIETH CENTURY (7) 1905 saw the end of the night of 500 years the period when the country had been ruled by Denmark and Sweden. The newfound independence coincided with increased industrialization. In the early twentieth century the countrys hydropower resources were used to build up a substantial energy-intensive industry based on electrochemical and electrometallurgical processes. Fertilizers, calcium carbide, zinc, and aluminium were important products. Other exports were also increasingly refined at home; timber gave way to pulp and paper, and canned goods made up more than 40 percent of the fish exports by 1916. (8) A substantial balance of trade surplus during World War I, when Norway was neutral, was turned to a massive deficit (17.1 percent of GDP) in 1919. In the early 1920s the combination of the international postwar depression, deteriorating terms of trade, and an unfortunate monetary policy led to severe economic difficulties. Export growth contributed positively to the improvements in the economy in the last part of the decade. The two most notable sectors were Antarctic whaling, where a number of innovations secured high returns, and shipping, with fortunate investments in motor ships and oil tankers. Norway was one of a limited number of countries where export growth exceeded GDP growth during the 1930s. (9) During World War II Norway was occupied by German forces. Nevertheless, the merchant marine was still in Norwegian hands. The fleet played a crucial role in the Allied war effort and also brought substantial revenues. The Norwegian authorities embarked on a large scale industrialization program following World War II. Further harnessing of the power from Norwegian waterfalls enabled the expansion of energy-

3 intensive industries. By 1970 Norway had become the worlds second largest exporter of aluminium. (10) The role of foreign trade in the Norwegian economy continued to increase after World War II. In 1950 the share of imports and exports in GDP was 79 percent, and this ratio peaked at 90 percent in 1975. Despite growing industrialization, shipping was still the single most important export sector. Again, Norway benefited from growing international trade. Since the mid-nineteenth century the income from the sale of shipping services has made up between 30 and 50 percent of Norwegian export revenues. (11) When the shipping market collapsed in the early 1970s, a new maritime industry rose to prominence. In 1969 substantial petroleum reserves were discovered on the Norwegian continental shelf. In the period 1980 to 2000 oil and gas exports from offshore fields have averaged more than 40 percent of Norwegian goods exports. Around the turn of the century Norway was the worlds second largest oil exporter, trailing only Saudi Arabia. The massive income from oil exports has given a substantial balance of trade surplus. In 2001 the value of Norwegian exports of goods and services corresponded to 46 percent of GDP, whereas imports corresponded to 29 percent of GDP. (12) Norways attitude towards international trade organizations has been ambivalent. In 1947 Norway became one of twenty-three countries to sign the first General Agreement on Tariffs and Trade (GATT). The country was also a founding member of the European Free Trade Association (EFTA) in 1960. However, Norway has chosen to remain outside the main process of European integration. (13) Through two referendums the Norwegian public has rejected entry into the European Economic Community (1972) and the European Union (1994). Europe is nevertheless still crucial as a market for Norwegian goods, and the relationship between Norway and the European Union has been organized since 1995 through the European Economic Area Agreement. In the first years of the twenty-first century more than three-quarters of Norwegian exports went to European Union countries, with Great Britain, the Netherlands, Germany, and France as the most important importers. (14) Norways foreign trade differs from that of most industrialized countries. The exports have been closely linked to the countrys natural resources and advantages: fish, forestry, hydropower, petroleum, and a maritime heritage. Indeed, Norway has managed to acquire one of the worlds highest standards of living without having high-technology industrialized products as a major component of their total exports. Nevertheless, the demanding technological requirements within, for instance, offshore oil drilling, illustrate the important interplay between skills and natural resources.

Text B

SWEDEN (1) Swedens economy and trade have to a large degree been shaped by the countrys geographical location. Situated in Europes northern periphery, Sweden had rather disadvantageous conditions for agricultural development, and it was geographically distanced from the more advanced economies of the western and southern parts of the Continent. On the other hand, the long coastline and sea connections across the Baltic and North seas encouraged the Swedes to develop maritime transportation from the Viking Age onwards. (2) Swedens large territory provided natural resources that in the course of time turned into valuable export commodities. The combination of overseas connections and rich natural resources is the major precondition for Swedens commercial integration within the orbit of Western European and Atlantic economies, and is a vital factor in its economic development and contemporary wealth. (3) Between 1450 and 1600 Swedens most important commercial contacts were with the Hanseatic towns on the southern coast of the Baltic Sea. Sweden exported metals, mainly pig iron, and hides, fish, and butter, and imported primarily salt and beverages. The country did not participate in the significant Dutch-Baltic grain trade, and contacts with Western Europe were rather limited. Nevertheless, by the sixteenth century the Swedish state began to introduce a conscious economic policy that aimed to promote foreign exchange and develop domestic industries. In the first half of the seventeenth century Swedens foreign trade expanded tenfold. The major part of the increase related to iron and copper exports. (4) At the same time, the center of trade shifted from Hanseatic towns such as Lbeck and Danzig to the Dutch Republic. Military and diplomatic cooperation between Sweden and the Dutch Republic played a crucial role in transformation and expansion of Swedens foreign trade. (5) After 1648 Swedish and Dutch interests diverged as Swedens commercial policy increasingly followed mercantilist ideas. The expansion of iron exports continued, and in the second half of the seventeenth century Sweden became the leading iron supplier in Europe. From the 1670s England replaced the Dutch Republic as Swedens main

5 commercial partner because of English purchases of Swedish iron a position of primacy that England held until the introduction of puddled iron in about 1800. (6) During the whole eighteenth century iron remained Swedens major export article, but the importance of forest products such as tar, pitch, and sawn goods (naval stores) also increased. As one of the few large suppliers of naval stores in the age of sail, Sweden was a strategically important partner for all maritime powers. Despite the limitation of Swedens exports to three or four major staple commodities, the countrys imports comprised a large variety of goods, from Baltic grain and Portuguese salt to manufactured goods, textiles, colonial goods, wine, and others. (7) Even after the loss of its great power status in 1718 Sweden continued to develop its mercantilist policy. Imports of many manufactured and colonial goods were prohibited or limited and domestic industries were promoted with ambiguous results. The Swedish Navigation Act (1724) encouraged shipping under the Swedish flag, and it developed rather successfully, especially during the second half of the century, when Swedish vessels benefited from their neutrality in wars between the prominent maritime powers. Between 1731 and 1813 Sweden also had its own East India Company, which played an important role in the tea trade, even though the companys impact on the domestic economy was somewhat limited. (8) By the mid-nineteenth century Sweden was an integrated part of the world commercial system, but the values and volumes traded were not very large, and the country had a rather underdeveloped economy by contemporary standards. In the ensuing century Sweden went through a remarkable modernization. Between 1870 and 1970 Sweden, together with Japan, enjoyed the worlds highest growth rates per capita; from a rather poor country in Europes periphery Sweden became by 1970 one of the wealthiest nations in the world. The role of exports in this development is disputed, but it is clear that they grew rapidly. (9) Three factors fuelled Swedens export growth in the period: forests, iron, and supply of cheap hydroelectric power. Expansion of forest-product exports after 1850 came in response to the rising global demand for sawn goods, and it also was connected to the exploitation of Swedens immense northern forests. By the late nineteenth century sawn goods exports went through structural changes: first from sawn goods to pulp, and then from pulp to paper. In a few decades Sweden became one of the worlds leading paper exporters, a position that it still holds. In trade terms the importance of iron industry declined after the mid-nineteenth century, yet in general, the industry adjusted successfully to new conditions, with new products with high added value and the rapid expansion of iron ore exports.

(10) The years around 1900 were a period of breakthrough for new technologies and new energy sources (oil and electricity). Many Swedish companies were established during this period, including Ericsson (telecommunications), Alfa Laval (processing equipment), SKF (industrial bearings), and ASEA/ABB (electric power transmission), all employing original Swedish inventions and innovations. These companies grew rapidly and expanded abroad. Together with the forest-based industries, they created a platform for the expansion of Swedish exports after the end of World War II in 1945, when Sweden with its undamaged industrial capacity increased its share of export markets. (11) The economic crisis of the 1970s severely damaged Swedens economy and trade. The iron and steel industries went through deep structural changes, and the shipbuilding industry, previously an important export sector, disappeared. In the 1980s and 1990s Sweden continued to adjust to the new conditions of global trade by specializing in knowledge-intensive products. Thus, around 2000, the most dynamic part of Swedens export trade centered on telecommunications (Ericsson) and pharmaceuticals (AstraZeneca), although exports of cars and trucks were also important. Swedens entry into the European Union (EU) in 1995 strengthened its commercial relations with Europe, and in 2000 about half of Swedish trade was with other EU countries. The most important trading partners were Germany, the United States, and the neighboring Nordic countries.

7 Task 1: Text A questions 1. The fact that a relatively small number of natural resources has made trade with other countries necessary means Norway is a classic example of a ___________________.

2. Norways big three export products were the driving force behind economic development in the 1800s and indicated that the Norwegian model was an economy based on _____________________.

3. What caused the increased demand for Norwegian shipping services in the second half of the 1800s? _____________________________________________________________________

4. Other than an ineffective monetary policy, what is one other reason for the economic difficulties experienced in the 1920s? _____________________________________________________________________

5. What new sea-based industry became important to Norway after the decline of shipping in the 1970s? _____________________________________________________________________

6. Despite the fact that the country has achieved a high standard of living, Norway has done this in a way that differs from most industrialized nations. How does it differ? _____________________________________________________________________

Task 2: Text B questions 1. The fact that it has poor conditions for agriculture and that it was located a long distance from more developed economies are signs that _______________________ has influenced the Swedish economy.

2. Swedens major trading partner in the early 1600s was the Dutch. Why did this change to the English in the later part of this century? _____________________________________________________________________

8 3. Although some disagree on the importance of __________________, it is clear that they contributed to Swedens rapid growth between 1870 and 1970.

4. Many new companies were established in the early 1900s and all of these used _____ ______________________ to achieve rapid growth and foreign expansion.

Task 3: Synthesis task Both Norway and Sweden were engaging in international trade in the 1600s. At this time the demand for (e.g.) log frames enabled a large increase in Norwegian timber exports. Indeed, this increase in wood export meant that the (1) ___________________ increased to four times its previous size in this period. Sweden was also involved in foreign trade, particularly in the export of (2) ___________________ to England, which overtook Holland as Swedens major trade partner. Both nations saw changes to their international trade in the 1800s. For instance, Norway had to import a lot of food items from other countries and this was reflected in Norways (3) ___________________ and in the share of foreign trade in the GDP. Meanwhile, Swedens huge Northern forests meant that the country was able to meet the high demand for sawn goods that appeared in the 1850s. There was a consequent expansion in (4) ___________________ exports around this time. In the twentieth century the two nations saw further changes to their international trade policies. Although trade with Europe remains important to Norway, the country has twice rejected joining the European Union in (5) ___________________, firstly in 1972 and again 1994. Sweden had to make changes after the economic problems of the 1970s. In the following decades, the country has specialized in (6) ___________________ in an attempt to adjust to new global demands.

9 Answer Key Text A: Norways rise as an economic force 1. The fact that a relatively small number of natural resources has made trade with other countries necessary means Norway is a classic example of a ____________. (1) Norways geography its natural resources, the long coastline, and its position on the northern outskirts of Europe has shaped the countrys foreign trade. The most important exports have been fish, forest products, and shipping services, with petroleum products gaining a crucial role in the last decades of the twentieth century. Norway is a typical small open economy, where a narrow resource base has made international trade a prerequisite for economic growth and a high standard of living. TRADE BEFORE 1814 (2) Norway was ruled by Denmark until 1814, when the country was annexed by Sweden. In the fifteenth century Norway and particularly the Hanseatic kontor (office) in Bergen was an important part of the European network. Norwegian fish, primarily stockfish, was exported to Europe, and grain and salt were imported. The Hansa were gradually replaced by an indigenous bourgeoisie. Moreover, the countrys exports became more diverse. (3) New types of fish and fish products, in particular herring and salted cod, became more important. (e.g.) Log frames (water-powered saws) enabled a substantial increase in the export of timber from the early sixteenth century onwards. Iron, copper, and silver mines were established approximately 100 years later. Between 1660 and 1696 the size of the Norwegian (1) merchant navy quadrupled, mainly as a result of timber exports, which demanded large amounts of cargo capacity. The shipping industry experienced a new growth spurt in the last decades of the eighteenth century. THE NINETEENTH CENTURY 2. Norways big three export products were the driving force behind economic development in the 1800s and indicated that the Norwegian model was an economy based on _____________________. (4) The big three fish, timber, and shipping services made up approximately 90 percent of Norwegian exports in the first half of the nineteenth century. Although the main exports were staples, the trade had substantial repercussions for local communities. Indeed, the export industries have been characterized as the engine behind the growth of

10 the Norwegian economy in the nineteenth century a classic case of export-led growth. Norways foreign trade was dominated by substantial imports of agricultural commodities and manufactures. (5) Due to the need to import foodstuffs, foreign trade played an important role in the Norwegian economy. Exports have constituted a larger share of gross domestic product (GDP) in Norway than in comparable countries in Scandinavia and elsewhere. The share of foreign trade (exports plus imports) in Norwegian GDP was more than 50 percent as early as the mid-1840s. The dependence upon imports has also been reflected in a (3) liberal trade policy. 3. What caused the increased demand for Norwegian shipping services in the second half of the 1800s? (6) Norways most important trading partners were Great Britain, Germany, Sweden, Russia, and Denmark. International trade liberalization has been particularly beneficial for Norway. The strong growth of international trade especially in the second half of the nineteenth century led to a substantial demand for Norwegian shipping services. This industry had close links to domestic shipbuilding during the age of sail. Following the British repeal of the Navigation Acts in 1849, Norwegian shipping assumed an even more important position internationally. By 1880 Norway had the worlds third-largest merchant marine, an impressive feat for a country, which at the time had a population of less than 2 million. THE TWENTIETH CENTURY (7) 1905 saw the end of the night of 500 years the period when the country had been ruled by Denmark and Sweden. The newfound independence coincided with increased industrialization. In the early twentieth century the countrys hydropower resources were used to build up a substantial energy-intensive industry based on electrochemical and electrometallurgical processes. Fertilizers, calcium carbide, zinc, and aluminium were important products. Other exports were also increasingly refined at home; timber gave way to pulp and paper, and canned goods made up more than 40 percent of the fish exports by 1916. 4. Other than an ineffective monetary policy, what is one other reason for the economic difficulties experienced in the 1920s? (8) A substantial balance of trade surplus during World War I, when Norway was neutral, was turned to a massive deficit (17.1 percent of GDP) in 1919. In the early 1920s the combination of the international postwar depression, deteriorating terms of trade, and an

11 unfortunate monetary policy led to severe economic difficulties. Export growth contributed positively to the improvements in the economy in the last part of the decade. The two most notable sectors were Antarctic whaling, where a number of innovations secured high returns, and shipping, with fortunate investments in motor ships and oil tankers. Norway was one of a limited number of countries where export growth exceeded GDP growth during the 1930s. (9) During World War II Norway was occupied by German forces. Nevertheless, the merchant marine was still in Norwegian hands. The fleet played a crucial role in the Allied war effort and also brought substantial revenues. The Norwegian authorities embarked on a large scale industrialization program following World War II. Further harnessing of the power from Norwegian waterfalls enabled the expansion of energyintensive industries. By 1970 Norway had become the worlds second largest exporter of aluminium. (10) The role of foreign trade in the Norwegian economy continued to increase after World War II. In 1950 the share of imports and exports in GDP was 79 percent, and this ratio peaked at 90 percent in 1975. Despite growing industrialization, shipping was still the single most important export sector. Again, Norway benefited from growing international trade. Since the mid-nineteenth century the income from the sale of shipping services has made up between 30 and 50 percent of Norwegian export revenues. 5. What new sea-based industry became important to Norway after the decline of shipping in the 1970s? (11) When the shipping market collapsed in the early 1970s, a new maritime industry rose to prominence. In 1969 substantial petroleum reserves were discovered on the Norwegian continental shelf. In the period 1980 to 2000 oil and gas exports from offshore fields have averaged more than 40 percent of Norwegian goods exports. Around the turn of the century Norway was the worlds second largest oil exporter, trailing only Saudi Arabia. The massive income from oil exports has given a substantial balance of trade surplus. In 2001 the value of Norwegian exports of goods and services corresponded to 46 percent of GDP, whereas imports corresponded to 29 percent of GDP. (12) Norways attitude towards international trade organizations has been ambivalent. In 1947 Norway became one of twenty-three countries to sign the first General Agreement on Tariffs and Trade (GATT). The country was also a founding member of the European Free Trade Association (EFTA) in 1960. However, Norway has chosen to remain outside the main process of European integration.

12 (13) Through two (5) referendums the Norwegian public has rejected entry into the European Economic Community (1972) and the European Union (1994). Europe is nevertheless still crucial as a market for Norwegian goods, and the relationship between Norway and the European Union has been organized since 1995 through the European Economic Area Agreement. In the first years of the twenty-first century more than threequarters of Norwegian exports went to European Union countries, with Great Britain, the Netherlands, Germany, and France as the most important importers. 6. Despite the fact that the country has achieved a high standard of living, Norway has done this in a way that differs from most industrialized nations. How does it differ? (14) Norways foreign trade differs from that of most industrialized countries. The exports have been closely linked to the countrys natural resources and advantages: fish, forestry, hydropower, petroleum, and a maritime heritage. Indeed, Norway has managed to acquire one of the worlds highest standards of living without having high-technology industrialized products as a major component of their total exports. Nevertheless, the demanding technological requirements within, for instance, offshore oil drilling, illustrate the important interplay between skills and natural resources.

Text B: Swedens success as a trading nation 1. The fact that it has poor conditions for agriculture and that it was located a long distance from more developed economies are signs that ____________________ has influenced the Swedish economy. (1) Swedens economy and trade have to a large degree been shaped by the countrys geographical location. Situated in Europes northern periphery, Sweden had rather disadvantageous conditions for agricultural development, and it was geographically distanced from the more advanced economies of the western and southern parts of the Continent. On the other hand, the long coastline and sea connections across the Baltic and North seas encouraged the Swedes to develop maritime transportation from the Viking Age onwards. (2) Swedens large territory provided natural resources that in the course of time turned into valuable export commodities. The combination of overseas connections and rich natural resources is the major precondition for Swedens commercial integration within the orbit of Western European and Atlantic economies, and is a vital factor in its economic development and contemporary wealth.

13 (3) Between 1450 and 1600 Swedens most important commercial contacts were with the Hanseatic towns on the southern coast of the Baltic Sea. Sweden exported metals, mainly pig iron, and hides, fish, and butter, and imported primarily salt and beverages. The country did not participate in the significant Dutch-Baltic grain trade, and contacts with Western Europe were rather limited. Nevertheless, by the sixteenth century the Swedish state began to introduce a conscious economic policy that aimed to promote foreign exchange and develop domestic industries. In the first half of the seventeenth century Swedens foreign trade expanded tenfold. The major part of the increase related to iron and copper exports. (4) At the same time, the center of trade shifted from Hanseatic towns such as Lbeck and Danzig to the Dutch Republic. Military and diplomatic cooperation between Sweden and the Dutch Republic played a crucial role in transformation and expansion of Swedens foreign trade. 2. Swedens major trading partner in the early 1600s was the Dutch. Why did this change to the English in the later part of this century? (5) After 1648 Swedish and Dutch interests diverged as Swedens commercial policy increasingly followed mercantilist ideas. The expansion of (2) iron exports continued, and in the second half of the seventeenth century Sweden became the leading (2) iron supplier in Europe. From the 1670s England replaced the Dutch Republic as Swedens main commercial partner because of English purchases of Swedish iron a position of primacy that England held until the introduction of puddled iron in about 1800. (6) During the whole eighteenth century iron remained Swedens major export article, but the importance of forest products such as tar, pitch, and sawn goods (naval stores) also increased. As one of the few large suppliers of naval stores in the age of sail, Sweden was a strategically important partner for all maritime powers. Despite the limitation of Swedens exports to three or four major staple commodities, the countrys imports comprised a large variety of goods, from Baltic grain and Portuguese salt to manufactured goods, textiles, colonial goods, wine, and others. (7) Even after the loss of its great power status in 1718 Sweden continued to develop its mercantilist policy. Imports of many manufactured and colonial goods were prohibited or limited and domestic industries were promoted with ambiguous results. The Swedish Navigation Act (1724) encouraged shipping under the Swedish flag, and it developed rather successfully, especially during the second half of the century, when Swedish vessels benefited from their neutrality in wars between the prominent maritime powers. Between 1731 and 1813 Sweden also had its own East India Company, which played an

14 important role in the tea trade, even though the companys impact on the domestic economy was somewhat limited. 3. Although some disagree on the importance of __________________ is, it is clear that they contributed to Swedens rapid growth between 1870 and 1970. (8) By the mid-nineteenth century Sweden was an integrated part of the world commercial system, but the values and volumes traded were not very large, and the country had a rather underdeveloped economy by contemporary standards. In the ensuing century Sweden went through a remarkable modernization. Between 1870 and 1970 Sweden, together with Japan, enjoyed the worlds highest growth rates per capita; from a rather poor country in Europes periphery Sweden became by 1970 one of the wealthiest nations in the world. The role of exports in this development is disputed, but it is clear that they grew rapidly. (9) Three factors fuelled Swedens export growth in the period: forests, iron, and supply of cheap hydroelectric power. Expansion of (4) forest-product exports after 1850 came in response to the rising global demand for sawn goods, and it also was connected to the exploitation of Swedens immense northern forests. By the late nineteenth century sawn goods exports went through structural changes: first from sawn goods to pulp, and then from pulp to paper. In a few decades Sweden became one of the worlds leading paper exporters, a position that it still holds. In trade terms the importance of iron industry declined after the mid-nineteenth century, yet in general, the industry adjusted successfully to new conditions, with new products with high added value and the rapid expansion of iron ore exports. 4. Many new companies were established in the early 1900s and all of these used __ ______________________ to achieve rapid growth and foreign expansion. (10) The years around 1900 were a period of breakthrough for new technologies and new energy sources (oil and electricity). Many Swedish companies were established during this period, including Ericsson (telecommunications), Alfa Laval (processing equipment), SKF (industrial bearings), and ASEA/ABB (electric power transmission), all employing original Swedish inventions and innovations. These companies grew rapidly and expanded abroad. Together with the forest-based industries, they created a platform for the expansion of Swedish exports after the end of World War II in 1945, when Sweden with its undamaged industrial capacity increased its share of export markets. (11) The economic crisis of the 1970s severely damaged Swedens economy and trade. The iron and steel industries went through deep structural changes, and the shipbuilding industry, previously an important export sector, disappeared. In the 1980s and 1990s

15 Sweden continued to adjust to the new conditions of global trade by specializing in (6) knowledge-intensive products. Thus, around 2000, the most dynamic part of Swedens export trade centered on telecommunications (Ericsson) and pharmaceuticals (AstraZeneca), although exports of cars and trucks were also important. Swedens entry into the European Union (EU) in 1995 strengthened its commercial relations with Europe, and in 2000 about half of Swedish trade was with other EU countries. The most important trading partners were Germany, the United States, and the neighboring Nordic countries.