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11%, respectively, in 1971. Since World War II, West Germany has been Sweden's most important supplier, providing automobiles, buses, and machinery, as well as luxury items such as jewelry and musical instruments.

During the 1960's, Sweden's trade pattern was directly affected by its membership in EFTA. Sweden joined with the United Kingdom, Norway, Denmark, Austria, Switzerland, and Portugal in forming EFTA in 1959, to promote the expansion of trade among themselves and thus to counter adverse efforts oin their trade anticipated from the creation of the European Economic Community. Sweden's export trade accelerated in the 1960's, largely as a result of the developing EFTA market. By 1971, EFTA (including Finland as an associate member and Iceland as a full member) accounted for 42% of Sweden's foreign trade, compared with 29% in 1960.

The intensification of economic ties among the Nordic countries also has played an important part in the development of trade among the Scandinavian countries. By pooling their resources and instituting new ties in banking, aviation, shipping, industrial research, and hydroelectric power exploitation. Sweden and its neighbors have spurred their industrial development. Of particular importance is a flourishing trade in manufactured components that permits greater industrial specialization in Sweden, while allowing a number of Danish and Norwegian firms to thrive solely by subcontracting for Swedish manufacturers. About one-fifth of Sweden's imports originate in the other Scandinavian countries, and those countries take a quarter of its exports.

The enlargement of the EC on 1 January 1973 to include the United Kingdom, Denmark, and Ireland as full members led Sweden to sign an industrial free

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090018-7