Luxembourg - International trade

While Luxembourg has had a trade deficit since the 1980s, the strength of the financial sector has meant that the Grand Duchy maintains a surplus in earnings. Although the nation had trade deficits of 84 billion francs in 1997, 81.4 billion francs in 1998, and 106 billion francs in 1999, it had account surpluses of 86 billion francs in 1997, 84 billion francs in 1998, and 59 billion francs in 1999. The overwhelming majority of the nation's trade has been with its EU partners. The 3 main trading partners are Germany, Belgium, and France. EU nations received 75 percent of Luxembourg's exports and provided 81 percent of its imports in 1999. In 1999, Germany received 25 percent of Luxembourg's exports, France 21 percent, Belgium 12 percent, the United Kingdom 8 percent, Italy 6 percent, the Netherlands 5 percent, and 4 percent went to the United States. Meanwhile, 35 percent of Luxembourg's imports came from Belgium, 26 percent from Germany, 12 percent from France, 9 percent from the United States, and 4 percent from the Netherlands. In 2000 exports totaled US$7.6 billion while imports totaled US$10 billion.

The country has traditionally imported most of its consumer goods and exported industrial products (steel). The Grand Duchy continues to import manufactured consumer products, but its exports have become more diversified. Besides steel, exports now include chemical and rubber products, and finished glass, but the most profitable export is financial services. The nation remains dependent on energy imports.

While Luxembourg's economy is traditionally geared toward its immediate neighbors, the government is supportive of free trade. About 90 percent of the nation's GDP is related to foreign trade. To expand internationally, successive governments have supported regional economic integration and worldwide efforts to promote free trade. Beginning with currency integration with Belgium in 1921, Luxembourg has looked for participation in regional bodies. It was a founding member of the European Community (later the EU), and its EU membership has opened markets for itself in other member states. The population of the EU is currently 370 million, and Luxembourg hopes increasingly to market its financial services to EU citizens. The adoption of common trade rules and practices has eased the ability to conduct foreign trade. Within the EU, Luxembourg coordinates with Belgium and the Netherlands to promote their national interests and to bolster the Grand Duchy's standing within the EU. Luxembourg is also a member of the Schengen Group, which promotes the free movement of citizens within the EU. With greater freedom of movement, the government of Luxembourg hopes to continue encouraging the influx of workers necessary to maintain the economy.

Also read article about Luxembourg from Wikipedia

User Contributions:

Comment about this article, ask questions, or add new information about this topic: