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The Baltics Mean Business! Fact Sheet released by the Bureau of European Affairs, U.S. Department of State, Washington, DC, January 18, 2000

If you are a business person and you haven't visited the Baltic states in the past few years you're in for a nice surprise! In the few short years since they regained their independence in 1991, Estonia, Latvia, and Lithuania have shed the vestiges of the Soviet era and have established fully functioning market economies and democratic governments. They boast an established and growing American business presence, including a number of large U.S. firms.

There is plenty of room for more U.S. participation, however, given the Baltic states' level of development and their strategic location as a crossroads between Europe and Russia and between Europe and the New Independent States. From a commercial standpoint they offer a number of advantages:

• A thriving international business culture;
• An active outreach and support program for foreign investors;
• Economic, legal, and political reforms on track;
• High priority given to privatization;
• Use of English as a business language;
• An educated, low-cost labor force;
• A Western outlook; and
• Beautiful, restored, and accessible capital cities.

In addition to these attractions, the Baltic states are moving toward probable EU membership in the next few years, making them even more attractive now as a gateway to the broader European market. Estonia -- which, incidentally, is larger than EU member Denmark -- is well into accession negotiations; Latvia and Lithuania will start their negotiations in early 2000. As an added attraction, both Latvia and Estonia have joined the World Trade Organization, with Lithuania committed to doing so as soon as possible.

To be sure, the Baltic states have some of the typical developing market impediments, such as lack of intellectual property rights and other property rights, lack of transparency in government processes, unequal economic development, customs irregularities, lack of western accounting practices, and a shortage of investment capital. However, there are continuing improvements even in these areas, and the trend is in the right direction.

The U.S. embassies in Vilnius (Lithuania), Tallinn (Estonia), and Riga (Latvia) are eager to assist U.S. companies interested in exploring the region's investment and export potential. They have, for example, organized a number of sector-specific trade fairs to bring together potential U.S., Baltic, and Nordic business partners. The Partnership Commission established under the U.S.-Baltic Charter also has a private sector component that enables the business community to discuss its needs directly with U.S. and Baltic economic decision-makers. The U.S. Commerce Department's regional commercial attache, based at the U.S. embassy in Stockholm, Sweden, can provide a wide variety of services to potential U.S. investors or exporters. For U.S. businesses seeking an educated, low-cost labor force, low start-up costs, and an inexpensive "back door" entry into the EU, the Baltics may be the answer.

For more information or to give feedback, please contact:

Conrad Tribble, NEI Coordinator Office of Nordic and Baltic Affairs U.S. Department of State Washington, DC 20520

Tel: (202) 647-5669 Fax: (202) 736-4170 Email: nei@state.gov

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