Foreign trade

Proximity to the Nordic markets, location between Eastern and Western Europe, competitive cost structure and high-skill labour force have been the major Estonian comparative advantages since the 1990’s. As a member of the European Union, Estonia today obviously enjoys free trade within the Union, and full participation of external trade agreements signed by the Union.

In November 1999 Estonia became a member of the World Trade Organisation (WTO), and in May 2004 the country joined the EU. Already from its early years of re-independence in the 1990’s, Estonia pursued a clear pro-trade policy, opening up its borders to foreign trade and investments in a quite unique way. This early exposure to foreign competition and capital, guaranteed the country a comparatively quick transformation to a full-fledged market economy, dominated by the spirit of free-trade, already before joining the EU. Also as a consequence of the openness, many large Estonian companies are today owned by foreign capital, and the share of subcontracting works in exports is still high.

Estonian Foreign Trade in 2007

In 2007 the exports of goods made up to 8 billion EUR and imports accounted for 11.3 billion EUR. Compared to the previous year, the value of exports increased 4% and of imports 6% which is the smallest growth during the last four years. The slowdown of the growth was partly caused by the rapid growth rate of exports and imports in 2006 (24% and 30%, respectively).

 

Estonian Foreign Trade 2000 – 2007, special trade method (billion EUR)

Source: Statistics Estonia

By countries

The share of the EU countries (EU 27) accounted for 70% and the share of CIS countries for 11% of the total exports. The exports to the EU countries grew 11% compared to the previous year, the exports to the CIS countries 14%. The main countries of destination were Finland (18% of the total exports), Sweden (13%) and Latvia (11%). The biggest increase in exports was to Latvia and to Togo. Among the 10 main countries of destination the exports decreased only to the USA.

In total imports the share of the EU countries was 78% and the share of CIS countries 13%. The imports from the EU countries increased 11%, but the imports from CIS countries decreased 13% compared to 2006. The main countries of consignment were Finland (16% of the total imports), Germany (13%) and Russia (10%). During the year the imports from Russia and Finland decreased. The biggest increase in imports was from Latvia and Sweden.

Estonia exported goods to 131 countries and imported from 98 countries. The trade balance was positive with 74 countries.

Exports

Imports

Country of destination

2007 %

Country of origin

2007 %

1. Finland

17.9

1. Finland

15.9

2. Sweden

13.2

2. Germany

12.9

3. Latvia

11.4

3. Russia

10.2

4. Russia

8.8

4. Sweden

10.1

5. Lithuania

5.7

5. Latvia

7.6

6. Germany

5.2

6. Lithuania

6.8

7. USA

4.2

7. Poland

4.5

8. Togo

3.4

8. Netherlands

3.4

9. Norway

3.4

9. UK

3.7

10. UK

2.8

10. Italy

2.8

Source: Statistics Estonia

By commodity groups

In exports among the commodity sections the first place was held in the section of machinery and equipment (the share 21% of the total exports). They were followed by mineral products, wood and products thereof and metals and products thereof. During the year the biggest increase in exports was announced in the section of agricultural products and food preparations and in transport equipment. The exports of mineral products and of machinery and equipment decreased.

 

Estonian Exports by Commodity Groups, 2007

Source: Statistics Estonia

In imports the first place was also held by machinery and equipment (22% of the total imports), followed by mineral products, transport equipment and metal and metal products. In imports the biggest increase was in transport equipment, agricultural products and food preparations and metals and products thereof. Similarly to exports, there was a decrease also in imports of machinery and equipment.

The biggest foreign trade deficit was mentioned in the section of transport equipment, machinery and equipment and mineral products. The surplus was mentioned as positive only in the section of wood and products thereof and miscellaneous manufactured articles.

Source: Estonian Investment and Trade Agency www.investinestonia.com

Read also blog section Foreign Trade

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