The export of Estonian goods and services exceeds 90% of GDP, and services constitute around a third of all exports.
In particular, various transport services (over 40% of all services) are offered to foreign companies and citizens, but the other main services include travel (nearly 24%) and business services (almost 19%). Add to that computer, communication and telecommunication services (8.5%), construction services and some others. Of transport services, transport by sea has the greatest importance, with the conveyance of goods and passenger traffic both very significant parts of it. Transport is accompanied by extra services that provide a significant portion of export income.
The range of exported goods is wide – from food products to electronic products and pecision instruments. A notable share of the goods exported from Estonia are manufactured locally in the form of subcontracting, a process which was initially quite simple but has now become more complex. As a result, for instance, mobile phones and other electronic products are made in Estonia. Primarily due to various forms of subcontracting, engineering products and machinery play the most important role in Estonian export, next come timber and various products made of timber (including paper, furniture, log houses). Estonia also exports metal products, chemical products and different light industry products (clothing, footwear). Food products and building materials are slightly less significant. Lately, the export of electrical energy and mineral products has grown. But the latter goes hand in hand with the growth in imports, because mostly exported products only be made by processing fuels imported from Russia.
As Estonia gained independence and the economic system of the Soviet Union collapsed, Estonia had to quickly redirect its economic contacts from the East to the West. The first new contacts were with Swedish and Finnish companies, at the same time the contacts with Russia remained in force. Trade relations with Latvia and Lithuania were not too active as the structure of the three economies was quite similar as a result of the Soviet economic system and there was not much to trade with. In due course Estonia formed closer contacts with the companies in Western Europe and elsewhere. The financial crisis in Russia in 1998 had a severe effect on Estonian-Russian trade and the impact of Russia diminished considerably.
Nordic countries – Finland and Sweden - hold a prominent position among Estonia's export partners. The export percentages of Finland and Sweden are almost 18% and nearly 14%, respectively, but their role remarkably decreased during the crisis that started in 2008. A substantial percentage of Estonian export goods goes to other, “old” countries of the European Union – chiefly to Germany (over 5%), but also to France (over 4%), Great Britain (2%), Denmark (over 3%) and the Netherlands (almost 3%).
Engineering products and machinery constitute the principal part of the goods exported to Finland, Sweden and Germany, they make up almost a half of the goods exported to Finland. Other more important goods include metal industry products, goods of the timber and paper industry, furniture and food products.
When Estonian joined the EU, the share of Russia in Estonian export grew from 4% to 9%, as the customs restrictions set by Russia disappeared. In addition, various changes occurred in the export structure because Estonia became mediator of several goods for Russia. One fourth of the export consists of machinery and equipment. The share of food products rose to one fifth. Estonia also exports a large quantity of products of light industry (including subcontracting in Russia for Estonian producers) and vehicles (mostly cars bought in Estonia) to Russia. Among other CIS countries, Ukraine and Belarus are the most important.
||Machinery and equipment (47%), timber, paper and furniture (18%), light industry products (11%)
|Sweden||Machinery and equipment (36%), timber, paper and furniture (21%), light industry products (13%), vehicles (11%)
|Germany||Machinery and equipment (38%), timber, paper and furniture (30%), food products (8%)
|Latvia||Vehicles, products of chemical industry, food products, electricity, metal products, machinery and equipment|
|Lithuania||Food products, vehicles, products of chemical industry, metal products, machinery and equipment, products of light industry|
|Russia||Machinery and equipment, food products, cars, light industry products, products of chemical industry|
Estonian exports have increased at a steady rate: while in 2004 the percentage of exports to Asia, Africa and America was 4%, now it has risen to over 19%. One of the reasons for this is definitely that these regions have had better economic growth than Europe. The USA (nearly 7% of exports), Canada (mainly fish products) and Norway are currently Estonia’s most important targets among the countries outside the European Union.Details about this article
Created: 20.02.2012 14:01
Modified: 27.09.2012 17:16