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US-Lithuania Trade Relations: An Alliance From Diplomatic Relations
The Start of Diplomatic Alliance

Lithuania is a country which extends from the East European plain. Most of its natural resources come from clay and sand thus enabling it to make some goods like cement, glass and ceramics. It only has a modest deposit of natural gas and oil thus it has to export such materials in order to have sources of energy for the entire country.

Lithuania's economy is 60% industrial, 25% agricultural and the remaining 15% distributed to other aspects of trade. Most of industries are focused on metal working, oil refining, shipbuilding, paper manufacture and machine construction. Chemical products, furniture and construction materials also play a vital role in its international business. Food processing and textiles are considered to form part of its light industries. On the agricultural side, crops such as fodder, cereals, sugar beets, vegetables, potatoes and flax are planted in the area. The said economy was also specializing on dairy products and its equivalent.

The second half of the 20th century transformed Lithuania economically. The Soviet occupation of the land in around 1940 was said to contribute largely to its economic reformation specifically on the industrial sector. However, despite the amount it gained from the said era, the work force, health and environment was a bit affected. Several issues on these things needed to be resolved. Urbanization of Lithuania zoomed from its 38% in 1959 to 68% thirty years later in 1989.

After the split of the USSR in 1991, Lithuania was said to suffer some losses. This is primarily because of the fact that it has to make its own way to world economy. Since the place has inexpensive natural resources, the industries had to be more dependent on energy sources thus leading to inefficiency of resource utilization as well as incapability of meeting requirements for production of goods in international business. Due to the transformation, Lithuania was said not to be competitive at all in the global economy scene.

The answer to the problems of the country was solved gradually through privatization of certain firms. This even lead Lithuania to a free market and economy. In 1998, seven years after its dissolution from the USSR, the nation was about to see light. While it was struggling to orient itself to the aspects of world trade, the desire was a bit shaken by the fall of Russia which produced some negative effects on a lot of European countries.

The hardships of Lithuania paid off a little bit when some other trading partners entered into the world scene. Luckily, it got support from its comrades in the European Nation and the United States entered the picture as well. It was recorded that 2.4% of Lithuania's $12.7 billion direct foreign investment came from the US which is equivalent to an amount of $277 million.

Major Exports and Imports Between the Two Nations

For the nine-month period ending September 2009, the US Census Bureau recorded total exports from US to Lithuania at $623.5 million. The total imports from the latter to the former were tracked at $615.1 million. In the year 2007, the same agency was able to gather records of the trade between these two nations and had the following data are available:

  • Lithuanian Exports to US. For the year 2007, exports coming from Lithuania to the US were recorded at a total of $455.61 million. Of this total amount, $155.69 million went to other petroleum products. This is 34.17% of the year's total. Other products in the list were: fertilizers, pesticides and insecticides; fuel oil; furniture, household items and baskets; apparel and household goods from other textiles; other scientific, medicinal and hospital equipment; minimum value shipments; boxes, belting, glass and abrasives; other products such as notion, writing and art supplies; and feedstuff and food grains. The last item was sold for $3.72 million or .82% of the total for the said year.
  • Lithuanian Imports from US. Imports from US entering the territories of Lithuania sold at the country's market for a total of $720.22 million. Out of this impressive total, $321.99 or 44.71% went to new and used passenger cars. Other products seen on the top spots were: meat and poultry products; civilian aircraft; fish and shellfish; organic chemicals; toys, games and sporting goods; photo service industry machinery; pharmaceutical preparations; excavating machinery and agricultural machinery and equipment. The last good sold at $12.35 million or 1.71% of 2007's total.
  • Fastest-Growing US Exports to Lithuania. The exported goods from the US which are sold at the Lithuanian market made remarkable stature for themselves. As evidence to this, dairy products and eggs were sold at $7.5 million for that year which was 124.850% better than its trade in 2006. Other commendable items in the list were: civilian aircraft engines; pulpwood and woodpulp; glass, plate and sheet; and rice. Rice made for itself total sales of $461 thousand which is 1,281% better than 2006's sales.
  • Fastest-Growing US Imports from Lithuania. To put a good balance of trade, Lithuanian goods entering the ports of the US were also sold on a very outstanding performance. In fact, feedstuff and food grains which were sold at $3.72 million for 2007 was said to be 18,620% better than in 2006. Other outstanding items in the chart were: fuel oil; plywood and veneers; plastic materials; and parts for civilian aircraft. Civilian aircraft parts gained total income of $138 thousand or 1,267% more favorable than its performance in 2006.
Treaties Between the Two Nations

Since Lithuania became independent from the USSR in 1991, it was said to push efforts in order to be accepted in global business. While making things work with its trade relations with the United States, there was a proposition on the so-called US-Lithuania Treaty. A letter of submittal from the Department of State in the US grounds was undertaken in August 9, 2000. It was more of a proposition to further intensify the bonds of friendship and investment on both sides. This was to further cover all aspects of trade including firms and nationals of both nations.

The US-Lithuania Bilateral Investment Treaty provided a better start for the economic relations of the two nations. The US was aware of the losses suffered by Lithuania during the collapse of Russia in 1998, thus, they took it as a chance to help Lithuania in the foreign market. They focused on all issues including those referring to the environment, politics, religion and culture. There were not much of the actual entry of the BIT into force but at least both grounds were founded on the desire to extend their stand in global trade.

Missile Shield to be Tapped by US in Lithuania

After considering Poland to be the host of a very controversial missile shield which it had declined, US is now thinking of proposing the said project to Lithuania instead. This may not lead to a possible conflict between the US and Lithuania yet until it will be installed on the latter's grounds. Much more to the effect of this shield on European nations, there is a foreseen dispute on the said matter.

Lithuania denied of the negotiations with Washington but did not say anything about declining the offer. In the long run, the plan may or may not take effect. Depending on the results, what happens next is still to be seen. Whether it may lead to a conflict is still for the future to behold. There is also that wanting for Lithuania not to be affected by any wars that could be created due to the installation of the missile shield. It may not push through though especially that there are speculations that this declaration from US may have been some kind of a trick in order for Poland to say yes to the proposition.

The Future Trade

The above-mentioned statements may affect the trade somehow but are not relatively large in extent. For everybody's security, military aspects are also being considered. In fact a non-profit organization known as the Nuclear Threat initiative (NTI) is geared to give essential policies and guidelines for global security. It is also a ground to establish development programs and activities specifically focusing on biological, chemical, nuclear and missile aspects. Some of the member countries of the NTI aside from the United States are Russia, Japan, India, Pakistan, China, United Kingdom, Jordan and Sweden.

Aside from military protection, another important aspect in the trade relations between Lithuania and the US is the so-called humanitarian assistance as supported by the United States Agency for International Development (USAID). Lithuania is one of the privileged countries which benefited from this program especially during its reconstruction. The economic assistance they could get from the US will definitely continue for a long span of time.

The desire to form part of international trade on the part of Lithuania is dependent upon the help they could get from powerful nations such as US. Young as they are in global business, they know where to turn and who to run to. The United States, on the other hand will continue to serve as an example to such countries seeking transformation.

US-Lithuania Trade References

Note: Trade statistics, industry links, economic projections and global business resources on this page have been compiled from hundreds of trade related websites, government guides and resources on the Internet. We provide this valuable information for industrial suppliers, manufacturers, exporters and importers seeking to enter or expland business opportunities in Lithuania.

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Lithuania's major industries include metal-cutting machine tools, electric motors, television sets, refrigerators and freezers, petroleum refining, shipbuilding (small ships), furniture making, textiles, food processing, fertilizers, agricultural machinery, optical equipment, and electronic components.

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