The Start of the Friendship
Austria is a highly mountainous country in Central Europe. The place became highly dependable upon its industries especially after the World War II. Goods which were primarily seen to boost its economy are iron and steel products, tractors, automobiles, locomotives and electrical parts. They also manufacture plastic, paper and pulp, furniture, processed food and textiles. As part of manifesting their tradition, craftsmen in the area made products out of ceramics, glassware, wood carvings and leather products as well as optical and musical instruments.
The vital points that caused some transition in Austrian agriculture included the very rapid decline of the workforce pertaining to this sector. Small-scale farming went down as well and was prevalently initiated by plans of consolidation. Scientific approaches had made a great deal in the area which was said to be a means for providing the food requirements of the citizens. Some of its leading crops are barley, wheat, oats, rye, potatoes, sugar beets and corn. Dairy farming is also contributory to Austria's existing stature in world economy.
Balance of trade in the area was predominantly on the deficit side since 1945. Despite attempts coming from tourism and foreign currency, the efforts seem to be not good enough to change its position. Reliant upon a lot of trade partners, Germany is said to be topping the list. Other European nations were also said to be working hard to boost the trade of the country.
The United States' participation in the pursuit for better trade in Austria was also seen through time. True to that, the former was said to contribute a lot to Austria's reconstruction. The people as well as government officials highly appreciate these efforts and have recognized this as a mark of an unfailing relationship with the US. Both countries were said to fulfill their interests for each other though at some points, emphasis on this aspect was given on the part of US. In fact, it had exerted a lot of efforts just to make Austria economically and politically stable.
Major Exports and Imports Between the Two Nations
Austria imports transport equipment and heavy machinery, fuels, foodstuffs and raw materials. Its exports were comprised of lumber, paper and pulp, textiles, iron and steel, electric power and machinery. Its trade relations with US were boosted with a lot of things most specifically on traded goods. Foreign firms from US to Australia were about 350 in number.
The US Census Bureau has already recorded balances of trade as late as September 2008. For that specific time frame, US exports to Austria amounted to $2.04 billion while the imports were tracked at $6.60 billion. For the year 2007, it was said that 5.1% of the total exports of Austria to the world went to the US while 3.3% of the market share for imports coming from the US formed part of Austria's own. Other pertinent facts for the said year were recorded as follows:
Trade Agreements Between the Two Nations
- Austrian Exports to US. The total exports of Austria to US for the year 2007 amounted to $10.67 billion. Of this total, $3.68 billion which is equivalent to 34.49% went to new and used passenger cars. Included in the list were: medicinal, dental and pharmaceutical preparations; soft beverages and processed coffee; engines and engine parts; other industrial machinery; materials handling equipment; drilling and oilfield equipment and platforms; minimum value shipments; generators, transformers and accessories; and other scientific, medicinal and hospital equipment. The last products earned a total of $177.13 million or 1.66% of 2007's total.
- Austrian Imports from US. Imported goods coming from the US to Austria totaled to $3.17 billion for the year 2007. Out of this total amount, other parts and accessories of vehicles were given a total of $577.86 million or an equivalent percentage of 18.23%. Other top billing products were: pharmaceutical preparations; civilian aircraft; minimum value shipments; medicinal equipment; new and used passenger cars; manufactured mineral supplies; electric apparatus; organic chemicals; and telecommunications equipment. The last good imported from US totaled to $74.75 million in the Austrian market which is equivalent to 2.36% for 2007's total.
- Fastest-Growing US Exports to Austria. Goods from the US entering Austria were seen to have invaded the market as well. There were a lot of goods which did not do well in 2006 but were recorded at very high percentage increases for 2007. Topping the list were hides and skins which were sold at $2.08 million or 8667% of 2006's sales. Other products completing the top five were: dairy products and eggs; bakery products; fruits and frozen juices; and aluminum and alumina. Aluminum and alumina was sold at 724% larger than in 2006 with an amount of $1.43 million.
- Fastest-Growing US Imports from Austria. While goods entering Austria from US made their share in the foreign market, those exported by the former to the latter had been performing well. As evidence to this, nickel was sold at $13.06 million or 1150% of the income from the same product in 2006. Other commendable items which completed the top five list were: nonfarm tractor and parts; bodies of chassis for trucks and buses; sporting and camping apparel, footwear and gear; and semiconductors and related devices. Semiconductors and related devices were sold for a total of $116.66 million in 2007 which is 317% larger than in 2006.
The very reason that a stronger bond has been maintained between the United States and Austria are the treaties they have signed together. They have intensified their camaraderie with these agreements. Some of the most popular pacts they have entered into have been existent for several decades now. Examples of which are:
Trade Conflicts Between the Two Nations
- Austria Friendship, Commerce and Consulars Treaty. This treaty was signed in Vienna on June 19, 1928. Several ratifications were made before it finally came into force on May 27, 1931. After almost three years in the making, the two countries were able to come up with vital aspects for their trade. One of the focuses which is about friendship talks about how the two nations will deal with each other in terms of cultural, social, political, and religious issues. The commerce aspect deals about more of the finances and economics of the two nations considering all grounds on taxation and imposition of levies as well as the goods that they trade. More on the consulars side, they have amicably settled for navigation of citizens within their territorial jurisdictions.
- US-Austria Peace Treaty. This came even before the above-mentioned treaty. It was signed on August 24, 1921 as a security to the alliance of these two nations. This pact was in consonance with the replacement of a formerly Austro-Hungarian Monarch into a republican government. Equal rights between the two nations were exercised in conjunction with their belief on fair treatment of their nationals. Furthermore, the treaty was made to accord privileges and some other advantages on both sides. As a peace treaty, this enhanced the peaceful negotiations of any untoward incidences for both parties. They have assured each other that there shall be no discrimination that will affect their current and future dealings.
The trade conflict between US and Austria was said to be affected by their income taxation standards. It is understood that these two different countries are under laws which are exclusively working for the interests of the particular land where the rules are implemented. Simply said, one side may impose tax for their own betterment and the same is true with the other party.
Taxation issues have long been a problem on all trading partners in international business. This cannot be avoided especially when the existing rules are so vague. Oftentimes, even existing treaties could not solve these problems. The common problem is on double taxation. Austria levies goods entering their market from the US thinking that it was not taxed in the latter's jurisdiction. The United States, being more blessed with the knowledge of the standards set by the international market, understands that there is no need to tax a product which enters their territory. To solve all disparities, a taxation convention was made thus eliminating all matters on double taxation as well as preventing fiscal evasion. This was signed between the two parties on May 31, 1996.
What Lies Ahead
The need to standardize certain rules of a land in relation to that of another is always a concern in all aspects of global trade. After Austria and US came into terms with regards their tax laws, there are not much disputes seen between the two. In fact, Austria's continued commitment to form part of the United Nations made it look forward to its permanent mission in terms of international trade.
At present, despite the time-to-time conflicts between the US and the European Union, Austria remained unbiased. Despite its membership with the EU, the government believed that it is better to deal appropriately with US. They have continually grown as one of the strongest trading partners in the world all in accordance with direct foreign investment and all other aspects of market share.
With this guiding them, the right path is yet to be seen between US and Austria. The future promises more things for them including reaching their common goals for the immediate resolution of all problems that will interfere along the way. Much more, they are now concentrated on how they will enhance their trade for their future generations to benefit from.
US-Austria Trade References