A New Role for Austria's Transit Trade

Austria's transit exports (foreign exchange receipts) totaled AS 90 billion in 1993, transit imports reached AS 79.5 billion. The surplus in transit trade was AS 10.5 billion, an order of magnitude that has consistently been achieved since 1990. Thus, transit trade is (following tourism) one of the most important positive items in Austria's current balance, covering about 10 percent of the deficit in the trade balance. Trade mediated by Austrian enterprises in international trade is called transit trade. Austrian enterprises buy merchandise abroad and sell it in a third country. Transactions of this kind are included in the balance of payments but not in the foreign trade statistics. In the past, Austria was mainly active in mediating trade flows between East and West. The demise of the centrally planned economies in the East eliminated important reasons for the existence of transit trade. Nonetheless, the turnover of Austria's transit trade did not drop after the collapse of the Communist systems but has even shown a slight upward trend. Austria's transit trade managed to find new tasks even under vastly changed circumstances. This includes, in particular, mediating foreign trade between the Eastern countries as well as functioning as wholesaler for small and medium-sized private enterprises in Eastern Europe. In 1993, 43 percent of Austria's transit exports were destined for Eastern Europe. The most important buyer was Hungary (11 percent), ahead of Russia (6½ percent), the Czech Republic, Slovenia and Poland (each about 5½ percent). 33 percent of Austria's transit exports were sold to Western Europe (Germany 13 percent). EFTA's share in 1993 (6½ percent) was only half as high as in 1982. 22 percent of goods in transit went to developing countries, with East-Asia an important market. Almost half of transit imports originated in Western Europe, with Germany (17 percent) the most important supplier. Almost one third of the transit merchandise was imported from the Eastern countries, mainly Russia (8 percent) and Hungary (6 percent). Merchandise from developing countries accounted for 15.6 percent in 1993. The value of trade flows mediated by Austrian firms between the various regions can only be estimated. In 1993, West-East transit trade may have totaled some AS 25 billion, and East-West transit trade AS 11 to 12 billion. Intra-East transit trade and trade from the East to developing countries each amounted to between AS 7 and 8 billion. Hungary's statistics on intermediary trade with the Eastern countries yield rough estimates of the size of Austria's transit trade in intra-Eastern trade. About 30 percent of Hungary's exports to the Eastern countries and about 30 percent of Hungary's imports from the Eastern countries were mediated by third countries in 1991 and 1992. Transit trade has evolved in market economies as an instrument to surmount trade barriers. This suggests that Austria's role as middleman between the successor states of the Soviet Union and some successor states of Yugoslavia and the West, Eastern Europe, and the developing countries might not diminish but even increase in the near future. Austria's role in mediating trade between East-Central Europe and the West and also within East-Central Europe is likely to be maintained, however, only if transit trade takes on additional functions.