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Economic relations

Economic relations

Although it has increased recently, trade between Latvia and France remains modest. Our trade balance with Latvia, which showed a deficit until 2006 because of the amount of petroleum product imports, showed a surplus in 2007 due to the combined effect of the increase in our exports and the decrease in our imports of petroleum products. As from 2008, bilateral foreign trade volume decreased in connection with the crisis. In 2009, our trade surplus dropped by 17% to 64.4M euros. Last year, the continued drop in our hydrocarbon imports and the fall of our exports resulted in a 40% drop in Franco-Latvian trade, standing at 250M euros. So after several years of growth, French exports continued the downward movement that began in 2008 and that concerned all sectors, with the exception of pharmaceutical products, in 2009.

The main foreign investors are Nordic countries (Estonia, Sweden and Denmark), and Germany. Russia is the seventh-leading investor. France’s presence, which is difficult to measure as investments often come from the subsidiaries of French groups in Scandinavian countries, is apparent in about 50 subsidiaries, making France the 19th foreign investor in 2009, with a total of 70M euros. Our main investment sectors are chemicals and pharmaceuticals, electric equipment, services, transportation and agrifood. The industrial sites of Rhodia, Dalkia, Axon Câbles and Butler Capital Partners in Daugavpils and Schneider Electric in Riga can be pointed out. In 2007, Société Générale bought out a consumer credit network. Saint Gobain decided to set up a gypsum plasterboard production site (€60 million), then a glass wool factory (€80 million), which are the subject of dispute for environmental reasons. In 2008, SNEF (engineering) and GEFCO (logistics) created subsidiaries in Latvia, and Veolia Environnement acquired a controlling interest in a local waste management company.

French exports in Latvia are composed primarily of intermediate goods, capital goods, consumer goods and agrifood products, while Latvian exports in France essentially concern energy products and intermediate goods.

Updated on 26.01.11

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