Belarus’s exports to Estonia, Latvia and Lithuania are at or close to record levels, cementing their trading relationships even as the three Baltic states take an aggressive stance on sanctions against the regime of leader Alexander Lukashenko.
In the first 10 months of last year, Estonia’s imports from Belarus were more than double 2020’s total at €522m and more than a fifth higher than the previous peak in 2018. Lithuania’s imports have increased 50 per cent compared with 2020, hitting €1bn — a third higher than the previous 2015 high. Latvia’s are up two-thirds from 2020 to €407m, just 2 per cent below their 2011 peak.
The sharp increases lay bare the tensions that the Baltic states face between economic opportunities and their geopolitical rhetoric, according to experts.
“The Baltic states are in the process of discovering that translating strong and principled foreign policy positions into an effective sanction regime is not such a simple matter, even in the most clear-cut cases,” said Tomas Jermalavicius, head of studies at Estonia’s International Centre for Defence and Security. “There are domestic economic players — even state-owned corporate entities — that will use every possibility to find ways around them for as long as feasible.”
The Baltic states have become the loudest voices in Nato for an assertive policy against both Belarus and Russia, as Minsk has in recent months used illegal immigrants to try to put pressure on neighbouring Latvia, Lithuania and Poland.
But economic considerations are causing domestic political tensions. For example, Lithuania’s government almost collapsed last month after it emerged that it had continued to trade with Belarus in the face of US sanctions. Lithuania’s foreign and transport ministers submitted their resignations — which were rejected — after revelations that the country’s state-owned railway was still transporting Belarusian potash.
Jermalavicius said that logistics and transport operators in all three Baltic countries would “always seize opportunities for extra earnings . . . if there is no pressure from the governments” as many had close relationships with Belarusian state-owned businesses.
But Vidmantas Janulevicius, president of the Lithuanian Confederation of Industrialists, said that although the Baltic countries needed to obey sanctions, it would be “stupid” to block all imports, especially as the region was connected to China and central Asia through Belarus.
“The most important thing is to stop the regime of Lukashenko, not the people of Belarus. If we [Lithuania] will not do this transit of goods, it will just move to another country,” he said.
One problem is that US and EU sanctions on Belarus do not always overlap, and the American bans lack bite in the Baltics because of a lack of direct economic links to the US, despite it being their most important geopolitical ally.
Jermalavicius said the situation raised “a legitimate question” about whether the Baltic states were ready to “accept the economic opportunity costs associated with their official political posture and regional security imperatives”.
Estonia’s foreign ministry said the imports from Belarus were “goods in transit” and were carefully checked against sanctions lists. Lithuania’s foreign ministry noted that there was no legal basis in the EU to implement sanctions imposed by a third country. And Latvia’s foreign ministry said: “Any ongoing trade [with Belarus] is currently taking place in compliance with the sanction regimes imposed.”
Imports from Belarus to the three Baltic states include wood products, fertiliser and oil.
Jermalavicius said it was “a bitter lesson” for the Baltic states as the “margin of error in the current geopolitical circumstances is very narrow”.
He added: “They should not waste their precious political capital and credibility accrued in Washington for the sake of a few hundred million euros that their businesses could earn each year by further dealing with Belarus.”
Source: Economy - ft.com
