More than a military alliance
What happens when a country (e.g.
When a nation such as Sweden or Finland joins the North Atlantic Treaty Organization (NATO), it is commonly assumed that there will be minimal changes aside from enhanced defense protection provided by its allies. However, the implications extend far beyond military cooperation. By becoming part of a military alliance, countries experience a closer relationship with other NATO members, which is likely to endure over time due to the difficulty of exiting such a significant pact.
Additionally, investing in other alliance members becomes less risky because the defense agreement reduces the likelihood of attacking a fellow member or pursuing detrimental policies.
A study by researchers Karen Jackson and her colleagues revealed that following Russia's invasion of Ukraine, NATO members began to trade more with each other. Between 2022 and 2025, intra-NATO trade increased by 9% to 15%. Looking back at NATO's founding in 1948, the researchers found that, on average, NATO accessions led to a 12% to 27% increase in bilateral exports. This growth was primarily concentrated in dual-use and intermediate goods that are integral to the defense supply chain or closely related.
In essence, NATO serves as both a defense pact and a mini-trade pact, demonstrating that membership has broader implications beyond mere military alliance.
Written by urgent.news from Klement on Investing's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
