Austria's Foreign Trade after Accession to the EU

Since the beginning of 1995 Austria's foreign trade can be divided into two separate areas: trade with the 14 other EU member states and trade with all other countries in the world. In 1994, intra-EU trade accounted for 65 percent of Austria's exports and 68 percent of imports. These shares exceed those of other EU member states. Thus, Austria's economy was closely linked to that of the EU through foreign trade even before accession to this group of countries. Intra-EU trade is favored vis-a-vis trade with third countries in a variety of ways: the abolishment of border controls, the elimination of variable import levies and tariffs on agricultural products and food, liberalization of public procurement, the abolishment of rules of origin and the simplification of technical provisions. Moreover, there is a tendency within the EU to impose anti-dumping tariffs on goods imported from successful competitors abroad. Suppliers from third countries are disadvantaged vis-a-vis sellers from within the EU at various levels. This was one of the reasons for Austria's decision to join the EU. In the recent past, Austria's trade with countries outside of the EU (extra-EU trade) has developed somewhat more dynamically than trade with EU countries (intra-EU trade): in 1993 extra-EU exports rose by 3.6 percent, while intra-EU exports declined by 7.8 percent; in 1994 the figures were 11.8 and 8.4 percent. The difference can be attributed mainly to cyclical factors. After accession to the EU, Austria's intra-EU trade ought to grow faster than extra-EU trade thanks to more favorable conditions within the EU. This is likely to be the case in agricultural trade. As far as trade with manufacturing products is concerned, the impact of the improvement in trade relations might only be felt after some delay. Extra-EU trade (35 percent of total exports, 32 percent of total imports) might for analytical purposes be broken down into two parts: trade with countries "associated" with the EU (the remainder of the EFTA countries, the six countries of East-Central Europe with Europe agreements, as well the ACP countries), and trade with third countries. The countries of East-Central Europe associated with the EU accounted for 26 percent of Austria's extra-EU exports and 18 percent of extra-EU imports. The EFTA countries contributed 20 percent and 14 percent, respectively, to Austria's extra-EU trade. From Austria's perspective, the grouping of the overseas departments (DOM/TOM, e.g., the Canary Islands, Madeira), as well as the ACP countries (Africa, the Caribbean region, the Pacific region) is new. The latter group consists mainly of the former colonies of the founding members of the European Common Market. These countries enjoy special access to the markets of EU countries. At present, foreign trade with these countries is negligible, but might gain in importance in the future. Among the not associated third countries are the developing countries overseas (with a share of 22 percent in extra-EU trade) and the not associated countries of Eastern Europe (8 percent). Industrialized countries overseas account for 19 percent of extra-EU exports and 33 percent of extra-EU imports. Austria's accession to the EU means that the compilation of statistics on trade with EU countries can no longer be based on data as recorded at the border but must be compiled at the firm level based on value added tax returns (Intrastat). Statistics on trade with third countries (Extrastat) will be gathered as before at the border. The changeover to the new system is creating substantial difficulties. For some time no data on foreign trade will be available; this comes at an inopportune time when the current account is turning negative. At the moment it is still unclear how the system of national accounts might be used to substitute for the foreign trade statistics.