Export to Lithuania, import-export and customs regulations

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Lithuania

Export to Lithuania, import-export and customs regulations

Since becoming independent in 1991, Lithuania proceeded to re-orientate its trade towards the West. The proportion of trade with EU countries increased from 37% in 1996 to 46% in 2001. The CIS zone, which was the main trade partner until 1996, (40% of Lithuanian import-export) represented only 23% of the trade in 2002 (see: Trade and Partner Countries Typology). This movement is mainly of political origin : the European integration process pursued by successive governments resulted in the signing of several agreements favouring the intensification of trade between the 2 zones. The countrys imports remain higher than its exports but sales as well as purchases are growing steadily. Paradoxically, the trade deficit which is a characteristic of countries in transition, is a positive indicator for a country with a growing economy.

Opening to trade and common market integration In 1994, Lithuania signed a free trade agreement with its Latvian and Estonian neighbours. It subsequently signed the same type of agreements with EU member countries (1995) then with those of the EFTA (1997). Finally, a series of bilateral agreements were signed at the end of the 1990s which liberalised trade with all the CEEC EU member countries. In addition, in accordance with the status of a country which has recently become a member of the WTO, Lithuania granted the ìNPFî clause (conventional customs duty varying between 0 to 45 %) to all the other members of the organisation. Bilateral agreements also allowed other countries (Byelorussia, Kazakhstan, the Russian Federation, Uzbekistan and Vietnam) to benefit from this clause. Apart from these simple free trade agreements, within the context of EU membership, Lithuania must integrate the common market as of 1st May 2004. It must therefore respect its commitments with regard to the free circulation of workers and goods, the elimination of quantity restrictions, the adaptation of legislation to competition and State aid and standardise customs and administrative formalities.

Trade and partner countries typology Although trade with European Union countries represents almost half of Lithuaniaís external trade, from a bilateral point of view it is Russia which has remained the young Baltic republicís most important trade partner. Energy is its main import from Russia, whereas the export of used vehicles contributes to a large proportion of Lithuanian exports to Russia. Its other trade partners in order of importance are Germany, the United Kingdom and Poland. Despite the fact that Lithuania is very poor on raw materials, the export of ores represents almost 20% of the countryís total exports. These are oil products, either in transit in Lithuania or which have entered the country to be re-exported after processing in the giant Mazeikiai refinery. Other major exports are vehicles (mainly used cars), textiles, electrical equipment, chemical industry products (mainly fertilisers) and some food products, which together represented approximately 45 % of the countryís exports in 2002. Apart from energy, the majority of imports include equipment and intermediary goods (electrical and electronic components, chemical products, textiles) and vehicles, which together represented more than 50 % of the imports in 2002.

As a country entering a phase of economic transition, Lithuania is now pursuing the restructuring of its production apparatus and at the same time, is providing itself with new production tools. The spectacular economic growth figures in 2001 and 2002 (ca. 6% annually) prove that this effort towards modernisation has borne fruit. Today, Lithuania and all the other CEECs are progressing towards maximum production. Imports play an essential role in this development phase as they must respond to the populationís everyday demands, not yet covered by local production. They also play a major role in the modernisation of the national production apparatus (technology and equipment transfer) and thus favour the development of new production capacities. Seen from this point of view, a high level of imports is a positive sign of economic dynamism. In the case of a regular increase in exports, the trade deficit need not be feared and may even be considered to be an instrument for financing economic growth. However, in West European countries where production is near its maximum, a trade deficit is above all seen as a negative indicator reflecting the lack of competitiveness of national companies.

According to the preliminary data of the Lithuanian Customs declarations, exports increased by 24.0 % and imports - by 15.2 %, if compared to the first half of 2000. The balance of foreign trade was negative and equalled to USD 0.6 billion. That is by 6.2 % lower than during to the same period of 2000.

The biggest part of Lithuanian exports in the first half of 2001 was directed to EU countries - 49.4 % of the total exports. Exports to CIS made up 17.0 % of the total exports. The biggest part of imports also came from EU - 42.5 % of the total imports. Imports from CIS reached 32.6 %. Imports from EU increased by 10.1 %, meanwhile imports from CIS - by 21.4 %, if compared to the same period of 2000. Exports to EU countries increased by 29.9 %, to CIS countries - by 46.6 %, if compared to the same period last year.

The main Lithuanian export partner is Latvia (15.1 %), United Kingdom (14.8 %), Germany (13.5 %), Russia (8.7 % of the total exports), and import partners - Russia (28.7 %), Germany (15.8 %), Poland (4.6 %) and Italy (4.0 %).