Austria's economy is dependent on foreign trade and closely linked to the economies of other EU countries, particularly Germany. Austria trades with some 150 countries, with the European Union accounting for about two-thirds of the total. Beside a variety of goods, Austria exports money in the form of investments. It is a major investor in the former Eastern European countries, with some 40 percent of all direct foreign investments in that part of the world coming from Austria. Another important branch of Austria's foreign trade sector is transit trade for goods and services traveling east and west across Europe.
Austrian exporters sold merchandise worth US$65.6 billion in 2000, up from US$62.9 billion in 1999. In 2000, Austria's international trade continued to grow. The trade balance deficit dropped from 8.4 percent to 5.6 percent of the export volume, reaching its lowest level since 1945. The sound economic situation in Central and Eastern Europe, the booming economy in the United States, and the moderate economic development in the European Union, as well as the favorable exchange rate were the main contributing factors. What grew strongest was foreign trade with the Eastern European countries and the United
|Trade (expressed in billions of US$): Austria|
|SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.|
States. Exports to Eastern Europe rose 23 percent in 2000 and imports 29 percent, while exports to North America increased by about one-third. Exports to the European Union rose 12 percent, while imports grew by 10 percent. Exports to Asia climbed by almost one-fifth in 2000, while those to Latin America showed a modest rise of 9 percent.
EU countries absorb the majority of Austrian exports and provide the majority of imports. In 1999, EU countries purchased 65 percent of Austria's exports, with Germany taking 36 percent, Italy 9 percent, and France 5 percent. Switzerland and Hungary each purchased 5 percent of Austria's exports. In 1999, 70 percent of all imports came from EU countries, with Germany providing 42 percent, Italy 8 percent, and France 5 percent. The United States is Austria's largest non-European trading partner, taking 4.5 percent of Austrian exports and providing 5 percent of its imports. Although the accession of Austria to the European Union has brought stiffer competition from European producers, U.S. exports to Austria increased considerably in the mid to late 1990s. Some U.S. exporters, particularly those in the data processing hardware and semiconductor sectors, are confronted with higher customs tariffs and regulations. Others have benefited from lower EU tariffs.
The EU ban on beef imports from cattle treated with hormones severely restricted U.S. exports of beef to Austria. Despite a World Trade Organization decision that the ban was inconsistent with the rules of international trade, the European Union did not lift the ban. Furthermore, the European Union ruled out the possibility of importing U.S. poultry or products containing poultry. The import of genetically modified food—what some Europeans call "Frankenstein food"—with the United States being the primary producer, was also banned. Austria went even further than its EU partners: Novartis corn and Monsanto BT corn, for example, which were major genetically modified foods approved by the European Commission, were banned imports in Austria.
|Exchange rates: Austria|
|euros per US$1|
|Note: Amounts prior to 1999 are based on Austrian schillings per US dollar.|
|SOURCE: CIA World Factbook 2001 [ONLINE].|