Estonians look to crack U.S. market

  • 2002-04-18
  • Kairi Kurm

Estonia's exports to the United States increased 45 percent and imports were up 5 percent in 2001, according to statistics released this month. But Estonian exporters are still trying to figure out ways to break into the world's biggest market.

Estonian and American trade officials offered some advice during a seminar hosted by the Estonian Trade Council on April 11.

Estonian businesses should market themselves as the most viable front door to Russia and the Commonwealth of Independent States and the most viable back door into the European Union.

"From an American perspective your strategic location is one of your strongest marketing advantages," said Karen Pilmanis, senior trade counselor at the U.S. Embassy in Tallinn.

The United States is tough for small countries to deal with, she said, because most U.S. companies are interested in trading in large volumes.

"Form more partnerships with American companies," Pilmanis advised.

"Target small- and medium-sized enterprises because they are more appropriate in scale and size to your needs and markets. Use local representatives for the bigger U.S. firms."

One point stressed by everyone at the seminar was to ensure contracts are air-tight and insurance coverage is in place when dealing with often lawsuit-happy Ame-rican firms.

Endel Palla, chairman of the board at the electrical equipment factory Harju Elekter, said that a U.S. company that was going out of business was once forced to buy all of their supplies due to a well-prepared contract.

It is also important to insure products when trading with U.S. firms.

"When someone's finger for example gets stuck in the ferry door a producer company has to pay all the damages," said Endel Palla, chairman of the board at the electrical equipment factory Harju Elekter. "These claims are usually very high and are started against the weakest or the uninsured company in the production chain."

What scares many Estonian companies, he said, is the sheer size of orders that go to the United States

"We take huge risks covering high volumes," said Palla. "The U.S. market is (volatile) and may drop sometimes. It is not easy to replace them with orders from Europe."

The United States is currently the fourth-largest direct investor at $298 million, one-tenth of all foreign direct investment in the country.

Estonia posted $60 million in exports to the United States last year. U.S. imports to Estonia totaled $98 million.

Machinery and equipment accounts for much of the Estonian imports. Estonia's textile products are the most popular goods imported by the United States.

About one-fifth of Estonia's exports are outsourced.

Among Estonia's largest exporters to the United States are piano producers Eesti Klaverivabrik, wood processors Technomar & Adrem and TKE Group, textile manufacturer Kreenholmi Valdus and metal processor Silmet.