Belarus’s exports to Estonia, Latvia and Lithuania are at or near record levels, cementing their trade ties, although the three Baltic states are taking 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 more than doubled 2020’s total to € 522 million. and more than a fifth higher than the previous high in 2018. Lithuania’s imports have increased 50 percent compared to 2020 and hit € 1 billion. one third higher than the previous high level in 2015. Latvia has increased by two thirds from 2020 to € 407 million, only 2 percent below their peak in 2011.
The sharp rises expose the tensions facing the Baltic states between economic opportunities and their geopolitical rhetoric, according to experts.
“The Baltic states are discovering that it is not so simple to translate strong and principled foreign policy positions into an effective sanctions regime, even in the clearest cases,” said Tomas Jermalavicius, head of studies at Estonia International. Center for Defense and Security. “There are domestic economic actors – even state-owned companies – who will use every opportunity to find ways around them for as long as possible.”
The Baltic states have become the highest voices in NATO for an assertive policy towards both Belarus and Russia, as Minsk in recent months has used illegal immigrants to try to put pressure on neighboring Latvia, Lithuania and Poland.
But economic considerations create domestic political tensions. For example, the Lithuanian 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 filed their resignations – which were rejected – following revelations that the country’s state-owned railway was still transporting Belarusian potassium chloride.
Jermalavicius said logistics and transport operators in all three Baltic countries “would always seize opportunities for extra earnings … if there is no pressure from governments”, as many had close relations with Belarusian state-owned companies.
But Vidmantas Janulevicius, president of the Lithuanian Industry Association, said that even if the Baltic countries had 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 Lukashenko’s regime, not the people of Belarus. If we [Lithuania] will not make this transit of goods, it will just move to another country, ”he said.
One problem is that US and EU sanctions against Belarus do not always overlap, and US bans lack bite in the Baltics due to a lack of direct economic ties to the US, despite being their main geopolitical ally.
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Jermalavicius said the situation raised “a legitimate question” as to whether the Baltic states were ready to “accept the economic alternative costs associated with their official political stance and regional security requirements”.
The Estonian Ministry of Foreign Affairs said that imports from Belarus were “goods in transit” and were closely monitored in relation to sanctions lists. Lithuania’s Foreign Minister 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 accordance with the sanctions imposed. “
Imports from Belarus to the three Baltic states include wood products, fertilizers 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, which have been earned in Washington, for the sake of a few hundred million euros, which their companies could earn each year by further trading with Belarus.”