Report by the Vice Consul at Tallinn (Trimble)19

No. 52

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II. Summary of Conclusions

Owing to the necessarily voluminous character of a report of this nature, it would appear advisable to insert at this point a brief summary of the conclusions reached. Because of the excessively onesided nature of the mutual trade between United States and Estonia (the balance of trade being greatly in favor of the United States) the efforts of the Estonian Government to direct its imports, by means of the exchange control and import license systems, toward nations which are extensive purchasers of Estonian products, have curtailed to a marked degree the volume of American shipments to this country. Conversely, the exportation to Estonia of goods originating in the United Kingdom and Germany, the United States’ principal competitors in this market, has been assisted materially. While these restrictions have always hampered the ability of American firms to export goods to Estonia, their effect has been even more severe in the past 16 months. This condition has arisen out of the unfavorable balance of Estonia’s foreign trade resulting from a partial harvest failure in 1936 which has been accompanied by renewed efforts on the part of the Estonian Government to balance its foreign trade on a bi-lateral basis. Thus while total Estonian imports in 1936 showed an increase in value of 26.3% in comparison with those made in the previous year, the importation of American goods in the same period exhibited a gain of but 1.7%. Furthermore, although the total importation from all countries in the first quarter of the current year rose 18.3% over that for the corresponding period in 1936, purchases of United States goods declined in value by 27.7%.

The character of the American export trade with Estonia has been undergoing a change during the past several years. Manufactured goods, which can generally be purchased elsewhere, are being imported [Page 270] from the United States in steadily diminishing amounts with the consequence that raw products, such as cotton, sulphur, and rosin, now comprise over three-quarters by value of all American shipments to this country. If this trend continues unabated, it follows that the United States will eventually be able to export to Estonia only such raw commodities as are essential to the Estonian economic welfare and which are not obtainable in countries possessing equalized or unfavorable trade balances with Estonia.

The one favorable note in this necessarily pessimistic outlook lies in the fact that American manufactures, because of their quality, are generally preferred in the Estonian market to those made in other countries. This is especially true as regards automobiles and motor trucks, tractors, typewriters and calculating machines, and miscellaneous types of machinery. Thus any concession tending toward a relaxation in the import-license and exchange-control restrictions as affecting American goods, which might be obtained in the present Trade Agreement negotiations with Estonia, should immediately result in an increased importation of United States products. In this connection it should be noted that tariff concessions would be purely barren unless accompanied by assurances of more favorable treatment in the matter of import license and exchange restrictions.

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  1. Prepared in accordance with instruction No. 19, April 3, to the Minister at Riga; not printed.