NATO expansion will bring short-term gains for defence manufacturers, but in the long term companies based outside the alliance could find themselves shut out, Finnish businesses believe.

Finland is not among the states joining the alliance later this year, which include Estonia, geographically and linguistically close to Finland. Aarne Nieminen, head of Patria Aviation, Finland's leading aerospace manufacturer, says: "We are looking for opportunities to work with Estonia on training and upgrading their air force to perform their NATO task." Patria is 26%-owned by EADS, with the Finnish government holding the rest.

The benefits of Estonia's membership could extend outside defence. "Joining will bring more projects [in Estonia], for example upgrading infrastructure such as harbours, for Finnish contractors," says Copterline managing director Kari Ljungberg, who expects more demand for his scheduled helicopter service between Helsinki and Tallinn as a result of NATO expansion.

However, in the longer term, NATO growth will close off more and more markets from suppliers outside the alliance, Nieminen warns. "We are in a tricky situation. Procurement and development work is all according to NATO standards, and it is difficult to get in when you are not a NATO country...It is not so bad in construction, but in software, electronics, and electronic warfare it is a difficult situation - much of it is restricted. "To reach NATO customers as well as its domestic market, Patria would have to manufacture the same products to two sets of standards – NATO and Finnish - a disadvantage not shared by manufacturers in NATO member states.

Nieminen is hopeful the situation will change. He says: "Finland will join NATO, but it will take time. It will be good for the industry."

Source: Flight International