"The Impact of Deglobalization and Trade Wars on Industry Dynamics: Norwegian Cod Fish and Portuguese Port Wine in a Bilateral Context, 1920-1940"

After several decades of increasing globalization in the last part of the 19th century, in the 1920s and 1930s the world economy experienced a new period of deglobalization characterized by economic crises and the introduction of bilateral agreements to replace multilateral principles. One of the results of this change was new trade wars between countries. This paper examines the effect of the trade war between Portugal and Norway from 1921 to 1923 and the impact it had on the industry dynamics of the Portuguese port wine and the Norwegian bacalhau – or salted and dried cod-fish. In the beginning of the 20th century, Portugal had gained the position as the largest consumer market for Norwegian bacalhau fish, and Norway was one of the most important markets for port wine. This study looks at these two countries and two industries and the impact that a series of bilateral trade agreements between the two countries had on the short and long-term dynamics of these two industries and their firms. The introduction of the bilateral principles for regulating the trade on wine and fish even led to a trade war for one and a half year from 1921 where no bacalhau fish was exported from Norway to Portugal and no port wine was exported to Norway. The study draws on a variety of firm, industry, and diplomatic archives and a wealth of secondary sources in particular from Norway and Portugal and examines how firms and business associations in Portugal and Norway maneuverer in this situation. By restructuring the supply chain, forming new alliances, and connecting to diplomatic processes between the two countries, the industries managed to change the outcome of the trade war from a situation of desperate losses of market share to gaining a stronger position than ever in the two foreign markets.