Baltic-Belarus trade thriving despite EU sanctions

Despite European Union's sanctions against Belarus in relation to the extensive human rights violations and aggressive foreign policy carried out there, trade relations of Latvia, Lithuania and Estonia with Belarus remain very active, Latvian Radio reported January 5.

Following the unfair presidential elections in August 2020 and the subsequent repression against peaceful protesters, the Baltic States actively supported sanctions against the Alexander Lukashenko regime within the EU and NATO. At the end of last year, the EU and the United States introduced additional sanctions against Minsk in response to the transfer of migrants by the Belarusian authorities to Lithuania, Latvia and Poland.

Due to geopolitical tensions and sanctions, trade volumes of the Baltic States with Belarus may be expected to have decreased, but it has not. The value of Belarusian exports to Latvia, Lithuania and Estonia has increased significantly in the past year.

During the first ten months of 2021, Latvia imported almost €407 million worth of goods from Belarus, two-thirds more than in 2020. More than half of the imports were wood and its products, according to data from the Central Statistical Bureau. The value of Estonia's imports from Belarus last year reached EUR 522 million between January and October, twice the value of the same period in 2020. Lithuania's imports from Belarus increased by 50% last year and reached EUR 1 billion.

Luminor's economist Pēteris Strautiņš said in a conversation with Latvian Radio that the increase in value of Belarusian exports to the Baltic States could be linked to the significant price jump for the main Belarusian export goods.

“Knowing what is imported from Belarus in general, they are mainly goods whose prices have risen very, very rapidly during 2021. They are timber, fertilizer, and fuels. Even if, in terms of physical volume, imports remained unchanged, the amounts could indeed be much higher last year, in terms of money,” Strautiņš said.

Critics have pointed out that sanctions approved so far against Belarus haven't been sufficiently effective. However, economist Strautiņš recalled that the EU and the US have so-called targeted sanctions against Belarus.

“There are different types of sanctions. There are comprehensive sanctions prohibiting cooperation with a country at all, but this is another case, as these are targeted sanctions. The idea is that we are not targeting the whole country, all citizens of Belarus, we do not want them to suffer because they are not guilty,” said Strautiņš.

The fact that Belarusian exports to the Baltic States have increased in monetary terms does not mean that the Baltic States or their companies have violated EU sanctions or acted against the bloc's common policy, Strautiņš added.

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