The Impact of EU Accession on the Export Competitiveness of the Estonian Food Processing Industry

Abstract

This article seeks to answer the question whether the investments made by Estonian food processing companies to meet the EU's strict hygiene and structural requirements have enhanced their competitiveness and opened up better export opportunities to the EU-15 market. Enhanced competitiveness means not only larger export volumes but also redirection of exports towards higher value added products. The current study focuses on the milk, meat and fish industries, concluding that in general, foodstuffs exports to the EU-15 have increased, but only the milk processing industry has experienced a shift towards value added consumer products. This shows that the Estonian food industry has not (yet) been able to reap the benefits of the EU market, and further investments in product development and quality, as well as in larger production volumes are necessary.

Notes

 ² Latvia's exports of processed meat products to the EU-15, however, were marginal before 2004, which explains the unusually high increase in exports after accession.

 ¹ With Estonia's accession to the EU, significant changes also occurred in the trade regime with third countries. The most important of these for the Estonian food processing industry were definitely the removal of double tariffs on exports to Russia and the cancellation of the free trade agreement with Ukraine. Although these policy developments too had a significant impact on trade patterns, these effects are beyond the scope of the present article.