How the Commerce Flourished
Bulgaria is situated on the Balkan Peninsula in southeastern Europe. Under the Communist system, it had a centrally planned economy. During the early years of industrialization, the system had worked much for the benefit of the nation. However, after some time Bulgarians felt that it is not adequate enough to sustain a more complicated economy. When the dictatorship fell in 1989, Bulgaria started to accept free trade in its markets. Right then and there, small and independent enterprises were legalized and given the opportunity to grow in the country.
Fifty percent (50%) of Bulgaria's land area are fertile enough to accommodate agriculture. Its primary crops include wheat, other grains, corn, sugar beets, roses, fruits and vegetables and sunflower seeds. Fruits are exported to other members of the European continent. The so-called Turkish tobacco is grown heavily on the southern part. Bulgaria's wine is popular to other countries in the world.
Before the emergence of the World War II, modern industry was not well-known in the country. Despite this fact, the government still stressed on its importance thus 40% of the labor force was utilized for this sector. Machinery, chemicals, processed foods and metal products were the principal industrial products.
It was in the 1920's when Bulgaria experienced a boom in its economy which led it to the start of its comradeship with the Untied States. American companies started to build elevators, dockyards and facilities in the area. Bulgaria started exporting roses for perfume production in the US thus making the former the largest supplier of the raw material for the latter in 1928. In the same year, the US provided financial aid after an earthquake rattled Bulgaria. Several infrastructures were built from educational institutions to other establishments. The Rockefeller Foundation sent thirty doctors to study in the US to help eradicate health problems such as malaria.
Apart from trading goods and other commodities, foreign currency production was also regarded. In 1922, the American Banknote Currency agreed on printing a large amount of Bulgarian currency in the United States. This was made possible by the help of the Bulgarian Finance Ministry.
Major Exports and Imports between the Two Nations
The primary commodities exported by Bulgaria to other nations in international business include clothing, footwear, machinery and equipment, fuels and iron and steel. Its major export partners are Italy, Turkey, Germany, Greece, Belgium and France. Its principal imports on the other hand, include machinery and equipment, metal and ores, raw materials, fuels, minerals, chemicals and plastics. Bulk of these products comes from trading partners like Russia, Germany, Italy, Turkey, Greece and France.
Although the United States had not formed part of the strongest trade partners of Bulgaria both for exports and imports, the trade relations of the two were constantly felt in each other's economy. In fact, the US Census Bureau recorded an amount of exports from US to Bulgaria at $450.6 million for the period ending October 2008. Imports coming from the latter to the former were seen at an amount of $332.8 million. The following information was recorded as to the trade of the two nations for 2007:
Trade Relations Agreement between the US and Bulgaria
- Bulgarian Exports to US. A total of $426.11 worth of exports from Bulgaria to US was recorded for 2007 by the US Census Bureau. Out of this total amount, other petroleum products topped the list with sales equivalent to 21.65% or $92.25 million. Joining the list of products topping the charts as to total sales were: other tobacco, waxes and nonfood oils; apparel and household goods from other textiles; furniture, household items and baskets; apparel and household goods from cotton; fertilizers, pesticides and insecticides; clocks, portable typewriters and other household goods; apparel and household goods from wood; dairy products and eggs; and footwear of leather, rubber or other materials. The last set of goods was sold at $8.97 million which is 2.11% of 2007's total.
- Bulgarian Imports from US. For the imports of Bulgaria from US, total recorded sales amounted to $306.16 million. Metallurgical grade coal found its way to the top with a total earned income of $43.35 million equivalent to 14.16%. Completing the list on the top spot were: civilian aircraft; other petroleum products; new and used passenger cars; industrial engines; telecommunications equipment; meat and poultry; agricultural machinery and equipment; minimum value shipments; and civilian aircraft parts. The last product gained total sales of $7.28 million which is 2.38% of the year's total.
- Fastest-Growing US Exports to Bulgaria. A lot of commodities coming from the US to Bulgaria were able to gain a fair market share especially when compared with the records gathered in 2006. Bodies and chassis for passenger cars, for instance, topped the charts with a total of $2.83 million equivalent to an increase of 11,795.83% from 2006. Regarding sales increase, other remarkable goods found on the charts were: animal feeds; hair and waste materials; specialized mining; and industrial engines. Industrial engines made its mark in the Bulgarian market because of a percentage increase of 1,822.62% amounting to a total of $14.18 million.
- Fastest-Growing US Imports from Bulgaria. The goods from Bulgaria sold in US made outstanding sales for 2007 as compared to 2006. Glassware, porcelain and chinaware made sales of $2.51 million which is equivalent to a percentage increase of 761.40%. Other goods found along this line were: sulfur and nonmetallic minerals; synthetic rubbers, wood, cork, gums and resins; other petroleum products; and household and kitchen appliances. Household and kitchen appliances made an income of $328 thousand which is higher by 410% than its sales in 2006.
A bilateral agreement was said to govern the trade relations of the US and Bulgaria. This pact was signed on April 2, 1991 which was more than two years after the fall of the Communist rule in Europe. This was known to be in consonance with the Most Favored Nation and Nondiscriminatory Treatment of nations.
Here are vital aspects discussed in the agreement:
The Role of World War II in the US-Bulgaria Trade Relations
- General Provisions. The trade agreement promotes the desire to mutually adopt an advantageous rule that governs all the rules of trade. This is in coherence with a predictable commercial environment. They also focused on the strengthening and development of the private sector as well as the existence of the market-based economic institutions which will possibly lead to mutual relations. Other aspects of finance involving nationals and companies of both nations were also stressed in the pact.
- On Charges. The pact specifically provided for rules governing custom duties, tariffs and taxation. Furthermore, the methods of levying on imported and exported goods were reiterated. The methods of payment for traded products and the international transfer for payments were also elaborated. Other concerns discussed in the treaty involve warehouse, transit and custom clearances.
- On Market Access. Tariff and nontariff measures shall be administered by each party in order to afford meaningful competitive opportunities for products and services. Moreover, it was stressed that taxes and any hidden charges shall not be imposed on imported goods whether it is through a direct or indirect manner.
The friendship was a bit hampered during the World War II. Although, both nations began to be neutral on the issues brought about by the said war, Bulgaria's relations with the US faltered because of the presence of Germany which conquered Yugoslavia. Bulgaria was then claiming lands from Romania, Yugoslavia and Greece. When the Germans defeated the Yugoslavs and the Greeks, Bulgaria found an ally in Germany.
On December 13, 1941, the Germans declared war against the Americans. Shortly after this declaration, the Bulgarians declared war as well. In June 1942, then President Franklin Roosevelt proclaimed a war against Bulgaria. Military attacks were seen on various grounds and the relationship was greatly affected. This was even preceded by a cold war in 1945 after the US failed to persuade the Bulgarian government to embrace democracy.
The Future of Trade between the Two Nations
The wars may have led US to break its democratic relations with Bulgaria. However, in 1989, the transition of the latter into a market economy marked the continuation of the alliance. From then on, the friendship grew even stronger than it used to before the World War II. They have proven that their alliance will no longer falter; especially that US contributed a lot of changes to the economy of Bulgaria.
As proof to their engagement with each other, the September 11 attacks to the Twin Towers in the United States made Bulgarian government send troops for the war against Afghanistan. In 2003, the allies of US participated in its invasion of Iraq. Thereafter, the Bulgarian and US government worked hand-in-hand in all its military concerns.
As they started a commitment with each other, they have helped improved each other's standing in global economy. Not only do they do business at present as they also look forward to a better future ahead of them. They have rejected the destructions brought about by the past and focused on other concerns such as the strengthening of bilateral investment.
US-Bulgaria Trade References