Estonia and Latvia

05.02.2009

The relations between Estonia and Latvia are friendly and close. Their shared interest in co-operation is based on their geographic proximity, historic and cultural similarities, common foreign policy goals, and their successfully developing trade and tourism. Estonian and Latvian heads of state and members of government meet regularly. Frequent communication and productive co-operation exist also at the state institution level and in the business community.

Estonia and Latvia exchanged diplomatic representatives already in December 1918. Diplomatic relations between the two countries were restored on 3 January 1992. Leili Utno presented her credentials in June 1992 as the first Estonian Ambassador to Latvia following the restoration of independence.

Jaak Jõerüüt is the current Estonian Ambassador to Latvia, having presented his credentials in October 2006. Embassy of Latvia in Tallinn is headed by the ambassador Kārlis Eihenbaums.

Significant Visits and Meetings

Agreements

Bilateral relations between Estonia and Latvia, primarily economic relations are as of 1 May 2004 regulated by EU internal market rules. The majority of agreements between Estonia and Latvia have been concluded trilaterally between Estonia, Latvia and Lithuania.

1. Agreement on the Renewal of the State Border and the Additional Protocol (came into force 13.09.93);
2. Agreement on Organising Common Border Control (came into force 30.08.94);
3. Agreement on the Activities of Border Representatives (came into force 30.08.94);
4. Air Services Agreement (came into force 01.02.96);
5. Agreement for the Promotion and Reciprocal Protection of Investments (came into force 23.05.96);
6. Agreement on the Maritime Delimitation in the Gulf of Riga, the Strait of Irbe and the Baltic Sea (came into force 10.10.96);
7. Agreement Regarding Border Points (came into force 21.10.96);
8. Agreement on Social Security (came into force 29.01.97);
9. Agreement on the Assessment of the Transboundary Effects on the Environment (came into force 14.03.97);
10. Agreement on the Transfer of the Right of Use of a Plot (came into force 28.06.99);
11. Agreement on Mutual Protection of Classified Information (came into force 11.08.00);
12. Framework Agreement on Mutual Assistance in the Event of Disasters (came into force 19.06.02);
13. Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital (came into force 21.11.02);
14. Agreement on Railroad Transport (came into force 16.05.2004)
15. Agreement on the Terms of the Use and Maintenance of the Valga1/Valka2 Joint Border Crossing Point.(came into force 21.05.04)

Defence Co-operation

The three Baltic countries are engaged in active trilateral defence co-operation, which was formalised on 12 February 1995 when the Defence Ministers of Estonia, Latvia and Lithuania endorsed the trilateral agreement on defence co-operation.

Trilaterally several joint projects have been initiated, of which some have survived up to the present and some have been terminated upon the achievement of their goals (BALTBAT, BALTSEA).
At present, the Estonian, Latvian and Lithuanian defense co-operation has mainly been focused on four co-operation projects:

BALTRON (Baltic Navy Squadron) - A naval force with mine countermeasure capabilities was established in 1998 for the purpose of participating in international peace support operations. The first to participate in the NATO's mine countermeasure unit was the Estonian Command and Support Ship "Admiral Pitka". As of 2006, the Baltic States dispatch their vessels on a rotational basis to the NATO Response Force.

BALTNET (Baltic Airspace Surveillance Network) - A system for the co-ordination and distribution of air surveillance data, established in 1998. To launch the system a regional air surveillance and co-ordination centre (RASCC) was established in Lithuania, where servicemen of the Baltic States train together. The main task is to supply NATO and the NATO aircrafts performing the air policing in the Baltics with the relevant air surveillance data, fulfilling this way the function of air surveillance pertinent to air policing.

BALTCCIS (Baltic Command and Communication Information System) - In 1995, the Defense Ministers agreed in co-operation for the exchange of operational information and in 2001 officially the corresponding co-operation project was drafted. One has to do with software, enabling operational display of information and as necessary the exchange of information at the domestic level, as well as between the Baltic States. The software was launched in 2006 and Latvians used the program at the NATO Summit in autumn 2006.

BALTDEFCOL (the Baltic Defence College) - A joint military education institution established in 1998 for the training of senior staff officers and civil servants to offer the officers of the Baltic States and of our partners military education in compliance with the uniform NATO standards. The main function of the College is to conduct the Joint Command and General Staff Course (JCGSC). In addition to that, the College annually arranges the Civil Service Course (CSC) and as from 2004, the Higher Command Studies Course (HCSC).

Environmental Co-operation

Most environmental projects operate trilaterally with the Baltic States working in co-operation with the member nations of the Nordic Council of Ministers and members of the Council of Baltic Sea States. Estonia and Latvia both support the banning of single hulled freighters in the Baltic Sea.

The Estonian-Latvian bilateral Fishery Commission is trying to approximate the interests and positions of the two states in the protection and administration of its fisheries. It meets at least once a year to determine fishery quotas in the Gulf of Riga and the Baltic Sea.

Economic Relations

TRADE

* Pre and post 1 May 2004 data are incomparable. After accession to the EU, the import is calculated on the basis of the sending country, earlier this was based on the country of origin.

The Trade Agreement (for manufactured goods 01.04.94 and agricultural produce 01.01.97) and the Agreement on Visa-free Travel encouraged over the years the rapid development of reciprocal trade.

Economic relations between Estonia and Latvia intensified even more in 2007. Compared with 2006, Estonian exports to Latvia grew by 30.1% and totalled 912.2 million euros. Estonian imports from Latvia grew by 37.3% and had a total value of 850 million euros. In terms of total trade turnover, Latvia is 5th among Estonia's foreign trade partners (with 9.1% of total trade).

Latvia continually belongs to Estonia's 5 main trade partners, being an important export market for our products as well as services. The increase of the share of services in trade will remain a trend throughout the forthcoming years. As regards a number of goods, the countries are complementing each other so that out of the products of the same commodity group a certain range of goods is produced in one country and another part in the other country. In that way, through mutual trade to a certain extent also the small volume of both markets is compensated.

Main export articles in 2007:

• Means of transport - 26.1%
• Machinery and equipment - 14%
• Metals and metal products - 8.7%
• Chemical products - 7.5%

Main import articles in 2007:

• Machinery and equipment - 14.3%
• Mineral products - 14%
• Textile and textile products - 10.1%
• Prepared food products - 10.1%

All economic figures originate from the Statistical Office of Estonia

INVESTMENTS

According to Bank of Estonia data, as of 30 September 2007 Estonian companies had invested 19.7 billion kroons in Latvia, which makes up 34.1% of all direct investments made in foreign countries. Nearly a quarter of investments were made in Latvian real estate development. As of 30 June 2007, Latvian direct investments in Estonia made up 2.7% of direct investments, with a total value of 6.3 billion kroons. Most Latvian investments in Estonia are in the trade, real estate and financial intermediation sectors.

According to the Commercial Register, over 400 Latvian shareholding companies are registered in Estonia. The biggest investment has been made by Latvenergo, which owns 25% of shares in the stock company Nordic Energy Link, which built the Estlink sea cable. Other significant Latvian investments have come to Krediidipank, Parex bank, and Tallinn Pharmaceutical Company. In July 2007 Latvia's biggest investment in industry was made when the company “Sakret” opened a concrete mix factory in Mäo.

Regional Co-operation

Co-operation between local governments on the Estonian and Latvian border has been functioning for years. In 2004, the Estonian and Latvian Governments formed working groups for cross-border co-operation. The joint tasks of these working groups are the development of a cross-border co-operation strategy with the objective of developing Estonian-Latvian co-operation within EU border co-operation programmes, creating a favourable environment for enterprise in the border regions and facilitating the border-crossing procedure. Specific working areas would include environmental protection, tourism, development of transport services, co-operation in shaping a common educational space and the health care system. Larger projects include the establishing of a common hospital system for Valga-Valka. In May 2005, Saaremaa Shipping Company Ltd. started regular voyages between Ventspils and Saaremaa. On 3 May 2007, Air Baltic opened air traffic between Kuressaare and Riga. Among the projects between the cities of the two countries, Riga's co-operation with Tallinn and Tartu as well as co-operation between Valmiera and Viljandi are most noteworthy.

Culture and Education

Thanks to their being neighbours, the cultural and educational contacts between Estonia and Latvia have been close. Already in the 19th century some of Estonia's future leaders of state and church were educated at the Seminary of Janis Cimze, the Higher Technical School of Riga and the Ecclesiastical Seminary of Riga. Due to the Agreement on Mutual Recognition of Documents Certifying Higher Education signed by Estonia, Latvia and Lithuania in 2000, several Estonian students study at Latvian post-secondary institutions. The Stockholm School of Economics in Riga has developed into one of the most popular educational institutions for Estonians.

Latvian is taught at the Estonian-Latvian Institute in Valga. In the autumn of 2005, in Valka a branch of the Latvian University started work, enabling also Estonian people to acquire higher education.

Approximately 2,600 ethnic Estonians reside in Latvia, of which one fifth are Estonian citizens. Modern times and economic activities in the open world have added to that niche several thousand Estonians, whose home is in Estonia, but who spend in Latvia a major part of their working time.

The Latvian Estonian Society was restored in 1988 as the legal successor to the Estonian Society of Education and Assistance, which was established in 1908 to unite Riga's Estonians. The Estonian congregation of the St. John's Church in Riga holds an Estonian-language service once a month. Once a month, a fifteen-minute Estonian language radiobroadcast can be heard on Latvia's national radio station. In June 2004 the international expatriate Estonian cultural days "ESTO 2004" were held in Riga.

In 1989, the Riga Estonian School restarted its work by offering education currently to close to 160 students. The school, which is financed by the Latvian state, conducts most of its studies in Latvian; however, Estonian language, culture and regional studies are taught there. Previously, the Estonian school in Latvia operated out of the Estonian Society house. The conditions were tight, but with the assistance of the Estonian representation in Latvia, the 2003/2004 school year started in new rooms specially made for teaching.The schoolhouse needs repairs and extension, for which the Estonian state is prepared to render aid. The decision of the Latvian state and Riga's City Government is being waited for.

Lively economic relations between the two countries have attracted several hundred Estonian entrepreneurs to Latvia. In addition to regular weekly meetings, Estonians working in Latvia hold summer re-unions and celebrate Christmas together. The Estonian Embassy in Riga is an active importer of Estonian culture to Latvia, organising regular events introducing Estonian art, music and theatre.

Enterprise Estonia's Tourism Board has been introducing Estonia as a tourist location using the "Welcome to Estonia" trademark.