For the most current version of this Note, see Background Notes A-Z.

Estonia flag is three equal horizontal bands of blue (top), black, and white. 2003.

PROFILE

OFFICIAL NAME:
Republic of Estonia

Geography
Area: 45,226 sq. km. (17,462 sq. mi.); about the size of New Hampshire and Vermont.
Cities: Capital--Tallinn (pop. 397,150). Other cities--Tartu (101,190); Narva (67,752); Kohtla-Jarve (46,765); Parnu (44,781); Viljandi (20,509). The last population census was held in 2000.
Terrain: Flat, average elevation 50 m. Elevation is slightly higher in the east and southeast. Steep limestone banks and 1,520 islands mark the coastline. Land use--9.5% arable land, 47,4% forest and woodland, 22% swamps and bogs, 21.5% other. Coastal waters are somewhat polluted.
Climate: Temperate, with four seasons of near-equal length. Annual precipitation averages 50-75 cm.

People
Nationality: Noun and adjective--Estonian(s).
Population: 1.367 million.
Annual growth rate: 0.4%. Birth rate--9.3/1,000. Death rate--13.6/1,000. Migration--616 persons (1999). Density--30/sq. km. Urban dwellers--70%.
Ethnic groups: Estonians 65%, Russians 28%, Ukrainians 2.5%, Belarusians 1.4%, Finns 0.9%, other 2.2%.
Religions: Lutheran; the Estonian Apostolic Orthodox, subordinated to Constantinople; the Estonian Orthodox, subordinated to the Moscow Patriarchate; Baptist.
Languages: Estonian (official).
Education: Years compulsory--9. Attendance--218,600 students at 550 schools, plus 50,800 university students. Literacy--98.2%.
Health: Infant mortality rate--8.4 deaths/1,000 live births. Life expectancy--65 yrs. men, 76 yrs. women.
Work force: 704,500.

Government
Type: Parliamentary democracy.
Constitution: On June 28, 1992 Estonians ratified a constitution based on the 1938 model, offering legal continuity to the Republic of Estonia prior to Soviet occupation.
Branches: Executive--president (chief of state), elected by Parliament every 5 years; prime minister (head of government). Legislative--Riigikogu (Parliament--101 members, 4-year term). Judicial--Supreme Court.
Administrative regions: 15 counties, 42 towns, and 205 municipalities.
Political parties/coalitions: Estonian Center Party--Chairman, Edgar Savisaar; Estonian Reform Party--Chairman, Siim Kallas/Coalition; Pro Patria Union--Chairman, Mart Laar; Estonian People's Union--Chairman, Villu Reiljan/Coalition; Moderates--Chairman, Ivari Padar; Estonian United People's Party--Chairman, Jevgeni Tomberg; Estonian Social Democratic Labor Party--Chairman, Tiit Toomsalu; Estonian Independence Party--Chairman, Vello Leit; Res Publica--Chairman, Juhan Parts/Coalition; Estonian Christian People's Party--Chairman, Aldo Vinkel; Russian Party in Estonia--Chairman, Stanislav Cherepanov; Estonian Democratic Party--Chairman, Jaan Laas; Republican Party--Chairman, Kristjan-Olari Leping.
Suffrage: Universal at 18 years of age; noncitizen residents may vote in municipal elections.
Government budget: $2.3 billion.
Defense: 2% of GDP.
National holidays: Jan. 1 (New Year's Day), Feb. 24 (Independence Day), Good Friday, Easter Sunday, May 1 (May Day), Whitsunday, June 23 (Victory Day--anniversary of Battle of Vonnu in 1919), June 24 (Midsummer Day), Aug. 20 (Day of Restoration of Independence), Dec. 25 (Christmas Day), Dec. 26 (Boxing Day).
Government of Estonia Web site: http://www.riik.ee/en/

Economy
GDP (2002): $6.5 billion.
Growth rate: 6.0%.
Per capita GDP: $4,720.
Inflation (2002): 2.7%.
Unemployment (2002): 10.6%.
Natural resources: Oil shale, phosphorite, limestone, blue clay.
Agriculture (3% of 2001 GDP): Products--livestock production (milk, meat, eggs) and crop production (cereals and legumes, potatoes, forage crops). Cultivable land--433,100 hectares.
Industry (26% of 2002 GDP): Types--engineering, electronics, wood and wood products, and textiles.
Services (70% of 2002 GDP): Transit, information technology (IT), telecommunications.
Trade: Exports (2002)--$4.3 billion. Partners--Finland 20%, Sweden 12%, Russia 10%, Latvia 8%, Germany 8%, U.S. 2%. Imports (2002)--$5.8 billion. Partners--Finland 16%, Germany 11%, Russia 12%, Sweden 8%.
Exchange rate (2002): 16.6 kroon EEK=U.S.$1.
Foreign direct investment (June 2003): Sweden 39%, Finland 30%, Netherlands 6%, U.S. 7%, Norway 3%, Denmark 2%, Germany 2%.

GEOGRAPHY
Between 57.3 and 59.5 latitude and 21.5 and 28.1 longitude, Estonia lies on the eastern shores of the Baltic Sea on the level, northwestern part of the rising East European platform. Average elevation reaches only 50 meters (160 ft.).

The climate resembles New England's. Oil shale and limestone deposits, along with forests that cover 47% of the land, play key economic roles in this generally resource-poor country. Estonia boasts more than 1,500 lakes, numerous bogs, and 3,794 kilometers of coastline marked by numerous bays, straits, and inlets. Tallinn's Muuga port offers one of Europe's finest warmwater harbor facilities.

Estonia's strategic location has precipitated many wars that were fought on its territory between other rival powers at its expense. In 1944 the Union of Soviet Socialist Republics (U.S.S.R.) granted Russia the trans-Narva and Petseri regions on Estonia's eastern frontier, which still remain contested bilaterally.

PEOPLE
The name "Eesti," or Estonia, is derived from the word "Aestii," the name given by the ancient Germans to the peoples living northeast of the Vistula River. The Roman historian Tacitus in 98 A.D. was the first to mention the "Aestii" people, and early Scandinavians called the land south of the Gulf of Finland "Eistland," and the people "eistr." Estonians belong to the Balto-Finnic group of the Finno-Ugric peoples, as do the Finns and Hungarians. Archaeological research supports the existence of human activity in the region as early as 8,000 BC but by 3,500 BC the principal ancestors of the Estonians had arrived from the east.

Estonians have strong ties to the Nordic countries today stemming from strong cultural and religious influences gained over centuries during Scandinavian colonization and settlement. This highly literate society places strong emphasis upon education, which is free and compulsory until age 16. The first book in Estonian was printed in 1525. About 20% of the population belongs to the following churches registered in Estonia: Estonian Evangelical Lutheran Church, Estonian Apostolic Orthodox Church, Estonian Orthodox Church subordinated to the Moscow Patriarchate, Baptist Church, Roman Catholic Church, and others.

From 1945-1989 the percentage of ethnic Estonians in Estonia dropped from 94% to 61%, caused primarily by the Soviet program promoting mass immigration of urban industrial workers from Russia, Ukraine, and Belarus, as well as by wartime emigration and Soviet premier Josif Stalin's mass deportations and executions.

Written with the Latin alphabet, Estonian is the language of the Estonian people and the official language of the country. One-third of the standard vocabulary is derived from adding suffixes to root words. The oldest known examples of written Estonian originate in 13th century chronicles. During the Soviet era, the Russian language was imposed for official use.

HISTORY
Estonians are one of the longest-settled European peoples, whose forebears, known as the "comb pottery" people, lived on the southeastern shores of the Baltic Sea over 5,000 years ago. Like other early agricultural societies, Estonians were organized into economically self-sufficient, male-dominated clans with few differences in wealth or social power. By the early Middle Ages most Estonians were small landholders, with farmsteads primarily organized by village. Estonian government remained decentralized, with local political and administrative subdivisions emerging only during the first century A.D. By then, Estonia had a population of more than150,000 people and remained the last corner of medieval Europe to be Christianized.

In 1227 the German crusading order of the Sword Brethren defeated the last Estonian stronghold. The people were Christianized, colonized, and enserfed. Despite attempts to restore independence, Estonia was divided among three domains, and small states were formed. Tallinn joined the Hanseatic League in 1248.

Despite successful Russian raids and invasions in 1481 and 1558, the local German barons continued to rule Estonia and from 1524 preserved Estonian commitment to the Protestant Reformation. Northern Estonia submitted to Swedish control in 1561 during the Livonian Wars, and in 1582-83 southern Estonia (Livonia) became part of Poland's Duchy of Courland.

In 1625, mainland Estonia came entirely under Swedish rule. In 1631, the Swedish king Gustav II Adolf granted the peasantry greater autonomy, opened the first known Estonian-language school in Tallinn, and in 1632 established a printing press and university in the city of Tartu. Sweden's defeat by Russia in 1721 resulted in the Uusikaupunki Peace Treaty, and Russian rule was then imposed in what became modern Estonia. Nonetheless, the legal system, Lutheran church, local and town governments, and education remained mostly German until the late 19th century and partially until 1918.

By 1819, the Baltic provinces were the first in the Russian empire in which serfdom was abolished, allowing the peasants to own their own land or move to the cities. These moves created the economic foundation for the Estonian national cultural awakening that had lain dormant for some 600 years of foreign rule. Estonia was caught in a current of national awakening that began sweeping through Europe in the mid-1800s.

A cultural movement sprang forth to adopt the use of Estonian as the language of instruction in schools, all-Estonian song festivals were held regularly after 1869, and a national literature in Estonian developed. Kalevipoeg, Estonia's epic national poem, was published in 1861 in both Estonian and German.

As the 1905 revolution in Russia swept through Estonia, the Estonians called for freedom of the press and assembly, for universal franchise, and for national autonomy. The uprisings were brutally suppressed, and Estonian gains were minimal, but the tense stability that prevailed between 1905 and 1917 allowed Estonians to advance the aspiration of national statehood.

With the collapse of the Russian empire in World War I, Russia's provisional government granted national autonomy to Estonia. A popularly elected assembly (Maapaev) was formed but was quickly forced underground by opposing extremist political forces. The Committee of Elders of the underground Maapaev announced the Republic of Estonia on February 24, 1918, 1 day before German troops invaded. After the withdrawal of German troops in November 1918, fighting broke out between Bolshevik and Estonian troops. On February 2, 1920, the Treaty of Tartu was signed by the Republic of Estonia and Soviet Russia. The terms of the treaty stated that Soviet Russia renounced in perpetuity all rights to the territory of Estonia.

Independence lasted 22 years. Estonia underwent a number of economic, social, and political reforms necessary to come to terms with its new status as a sovereign state. Economically and socially, land reform in 1919 was the most important step. Large estate holdings belonging to the Baltic nobility were redistributed among the peasants and especially among volunteers in the War of Independence. Estonia's principal markets became Scandinavia, Great Britain, and western Europe, with some exports to the United States and Soviet Union.

The first constitution of the Republic of Estonia, adopted in 1920, established a parliamentary form of government. The Parliament (Riigikogu) consisted of 100 members elected for 3-year terms. Between 1921 and 1931, Estonia had 11 governments. Konstantin P�ts was installed as the first President of the republic in 1938.

The independence period was one of great cultural advancement. Estonian language schools were established, and artistic life of all kinds flourished. One of the more notable cultural acts of the independence period, unique in western Europe at the time of its passage in 1925, was a guarantee of cultural autonomy to minority groups comprising at least 3,000 persons, and to Jews.

Estonia had pursued a policy of neutrality, but the signing of the Molotov-Ribbentrop Nonaggression Pact on August 23, 1939 signaled the end of independence. The agreement provided for the Soviet occupation of Estonia, Latvia, part of Finland, and later, Lithuania, in return for Nazi Germany's assuming control over most of Poland. After extensive diplomatic intrigue, the Estonian Socialist Republic (E.S.R.) was proclaimed on July 21, 1940, 1 month after Estonia was occupied by Soviet troops. The E.S.R. was formally accepted into the Soviet Union on August 6, and the official name of the country became the Estonian Soviet Socialist Republic (E.S.S.R.).

Soviet occupation was accompanied by expropriation of property, Sovietization of cultural life, and Stalinist communism permeating political life. On June 14, 1941, mass deportations took place simultaneously in all three Baltic states. Officially, nothing was said about the arrests, and no one was prosecuted or sentenced.

When Nazi Germany attacked the Soviet Union on June 22, 1941, most Estonians greeted the Germans with relatively open arms and hoped to restore independence. It soon became clear that sovereignty was out of the question. Estonia became a part of "Ostland." Massive repression continued. About 5,500 Estonians died in concentration camps.

In World War II Estonia suffered huge losses. Ports were destroyed, and 45% of industry and 40% of the railways were damaged. Estonia's population decreased by one-fifth (about 200,000 people). Some 10% of the population (more than 80,000 people) fled to the West between 1940 and 1944. More than 30,000 soldiers were killed in battles. In 1944 Russian air raids destroyed Narva, and one-third of the residential area in Tallinn was destroyed. By late September 1944, Soviet forces expelled the last German troops from Estonia, ushering in a second phase of Soviet rule. That year, Moscow also transferred the Estonian Narva and Petseri border districts, which held a large percentage of ethnic Russians, to Russian control. In 1944, there were massive arrests of people who had actively supported the German occupation or been disloyal to Soviet order.

An anti-Soviet guerrilla movement known as "the Forest Brethren" developed in the countryside, reaching its zenith in 1946-48. In March 1949, 20,722 people (2.5% of population) were deported to Siberia. By the beginning of the 1950s, the occupying regime had suppressed the resistance movement.

After the war the Communist Party of the Estonian Soviet Socialist Republic (ECP) became the preeminent organization in the republic. The ethnic Estonian share in the total ECP membership decreased from 90% in 1941 to 48% in 1952.

After Stalin's death, party membership vastly expanded its social base to include more ethnic Estonians. By the mid-1960s, the percentage of ethnic Estonian membership stabilized near 50%. On the eve of perestroika the ECP claimed about 100,000 members; less than half were ethnic Estonians and comprised less than 2% of the country's population.

A positive aspect of the post-Stalin era in Estonia was a reopening in the late 1950s of citizens' contacts with foreign countries. Ties were reactivated with Finland, and in the 1960s, Estonians began watching Finnish television. This electronic "window on the West" afforded Estonians more information on current affairs and more access to Western culture and thought than any other group in the Soviet Union. This heightened media environment was important in preparing Estonians for their vanguard role in extending perestroika during the era of Soviet President Mikhail Gorbachev.

In the late 1970s, Estonian society grew increasingly concerned about the threat of cultural Russification to the Estonian language and national identity. By 1981, Russian was taught in the first grade of Estonian language schools and also was introduced into the Estonian pre-school teaching.

By the beginning of the Gorbachev era, concern over the cultural survival of the Estonian people had reached a critical point. The ECP remained stable in the early perestroika years but waned in the late 1980s. Other political movements, groupings, and parties moved to fill the power vacuum. The first and most important was the Estonian Popular Front, established in April 1988 with its own platform, leadership, and broad constituency. The Greens and the dissident-led Estonian National Independence Party soon followed. By 1989, the political spectrum widened, and new parties were formed and re-formed almost daily.

The republic's Supreme Soviet transformed into an authentic regional lawmaking body. This relatively conservative legislature passed an early declaration of sovereignty (November 1988); a law on economic independence (May 1989) confirmed by the U.S.S.R. Supreme Soviet that November; a language law making Estonian the official language (January 1989); and local and republic election laws stipulating residency requirements for voting and candidacy (August, November 1989).

Although not all non-Estonians supported full independence, they were divided in their goals for the republic. In March 1990 some 18% of Russian speakers supported the idea of a fully independent Estonia, up from 7% the previous autumn, and only a small group of Estonians were opposed to full independence in early 1990. Estonia held free elections for the 105-member Supreme Soviet on March 18, 1990. All residents of Estonia were eligible to participate in the elections, including the approximately 50,000 Soviet troops stationed there. The Popular Front coalition, composed of left and centrist parties and led by former Central Planning Committee official Edgar Savisaar, held a parliamentary majority. In May 1990, the name of the Republic of Estonia was restored, public use of the symbols of the E.S.S.R. (anthem, flag, and coat of arms) were forbidden, and only laws adopted in Estonia were proclaimed valid.

Despite the emergence of the new lawmaking body, an alternative legislature developed in Estonia. In February 1990, a body known as the Congress of Estonia was elected in unofficial and unsanctioned elections. Supporters of the Congress argued that the inter-war republic continued to exist de jure: Since Estonia was forcibly annexed by the U.S.S.R., only citizens of that republic and their descendants could decide Estonia's future.

Through a strict, nonconfrontational policy in pursuing independence, Estonia managed to avoid the violence which Latvia and Lithuania incurred in the bloody January 1991 crackdowns and in the border-customs post guard murders that summer. During the August coup in the U.S.S.R., Estonia was able to maintain constant operation and control of its telecommunications facilities, thereby offering the West a clear view into the latest coup developments and serving as a conduit for swift Western support and recognition of Estonia's redeclaration of independence on August 20, 1991. Following Europe's lead, the United States formally reestablished diplomatic relations with Estonia on September 2, and the U.S.S.R. Supreme Soviet offered recognition on September 6, 1991.

After more than 3 years of negotiations, on August 31, 1994, the armed forces of the Russian Federation withdrew from Estonia. Since regaining independence Estonia has had 11 governments with 7 prime ministers: Edgar Savisaar, Tiit V�hi, Mart Laar, Andres Tarand, Mart Siimann, Siim Kallas, and Juhan Parts.

GOVERNMENT AND POLITICAL CONDITIONS
On June 28, 1992, Estonian voters approved the constitutional assembly's draft constitution and implementation act, which established a parliamentary government with a president as chief of state and with a government headed by a prime minister.

The Riigikogu, a unicameral legislative body, is the highest organ of state authority. It initiates and approves legislation sponsored by the prime minister. The prime minister has full responsibility and control over his cabinet. Parliamentary and presidential elections were held on September 20, 1992. Approximately 68% of the country's 637,000 registered voters cast ballots. An outstanding writer and former Minister of Foreign Affairs, Lennart Meri, won on the first ballot and became President. He chose 32-year-old historian and Christian Democratic Party founder Mart Laar as Prime Minister.

In February 1992, and with amendments in January 1995, the Riigikogu renewed Estonia's liberal 1938 citizenship law, which also provides equal civil protection to resident aliens.

In 1996, Estonia ratified a border agreement with Latvia and completed work with Russia on a technical border agreement. President Meri was re-elected in free and fair indirect elections in August and September 1996. During parliamentary elections in 1999, the seats in Riigikogu were divided as follows: the Center Party received 28, the Pro Patria Union 18, the Reform Party 18, the Moderates 17 seats. Pro Patria Union, the Reform Party, and the Moderates formed a government with Mart Laar as Prime Minister whereas the Center Party with the Coalition Party, People's Union, United People's Party, and members of parliament who were not members of factions formed the opposition in the Riigikogu.

In the fall of 2001 Arnold R��tel became the President of the Republic of Estonia. In January 2002 Prime Minister Laar stepped down, and President Ruutel appointed Siim Kallas the new Prime Minister. The Reform Party and the Center Party formed a new coalition government in power as of January 28, 2002. Parliamentary elections were held on March 2, 2003. A coalition government comprised of the Res Publica, Reform, and the Peoples' Union Parties took office in April 2003. President R��tel appointed Juhan Parts of Res Publica as Prime Minister.

Principal Government Officials
President--Arnold R��tel
Riigikogu Chairman--Ene Ergma (Res Publica)
Prime Minister--Juhan Parts (Res Publica)
Foreign Affairs--Kristiina Ojuland (Reform Party)
Interior--Margus Leivo (People's Union)
Social Affairs--Marko Pomerants (Res Publica)
Education--Toivo Maimets (Res Publica)
Transport and Communications and Economy--Meelis Atonen (Reform Party)
Justice--Ken-Marti Vaher (Res Publica)
Defense--Margus Hanson (Reform Party)
Environment--Villu Reiljan (People's Union)
Agriculture--Ester Tuiksoo (People's Union)
Finance--Taavi Veskim�gi (Res Publica)
Culture--Urmas Paet (Reform Party)
Population Minister--Paul-Erik Rummo (Reform Party)
Minister of Regional Affairs--Jaan �unapuu (People's Party)
State Chancellor--Heiki Loot

Estonia maintains an embassy in the United States at 1730 M Street, Suite 503, NW, Washington DC 20036; tel: [1] (202) 588-0101; fax: [1] (202) 588-0108. It operates a consulate at 630 Fifth Ave., Suite 2415, New York, NY 10020 (tel: 212-247-7634).

ECONOMY
For centuries until 1920, Estonian agriculture consisted of native peasants working large feudal-type estates held by ethnic German landlords. In the decades prior to 1918 independence, centralized czarist rule had contributed a rather large industrial sector dominated by the world's largest cotton mill, a ruined postwar economy, and an inflated ruble currency. In years 1920 to 1930, Estonia entirely transformed its economy, despite considerable hardship, dislocation, and unemployment. Compensating the German landowners for their holdings, the government confiscated the estates and divided them into small farms which subsequently formed the basis of Estonian prosperity.

By 1929, a stable currency, the kroon (or crown), was established. Trade focused on the local market and the West, particularly Germany and the United Kingdom. Only 3% of all commerce was with the U.S.S.R.

The U.S.S.R.'s forcible annexation of Estonia in 1940 and the ensuing Nazi and Soviet destruction during World War II crippled the Estonian economy. Postwar Sovietization of life continued with the integration of Estonia's economy and industry into the U.S.S.R.'s centrally planned structure. More than 56% of Estonian farms were collectivized in the month of April 1949 alone. Moscow expanded on those Estonian industries which had locally available raw materials, such as oil-shale mining and phosphorites. As a laboratory for economic experiments, especially in industrial management techniques, Estonia enjoyed more success and greater prosperity than other regions under Soviet rule.

Since re-establishing independence in 1991, Estonia has styled itself as the gateway between East and West and aggressively pursued economic reform and integration with the West. Estonia's market reforms put it among the economic leaders in the former Council for Mutual Economic Assistance (COMECON) area. A balanced budget, flat-rate income tax, free trade regime, fully convertible currency, competitive commercial banking sector, and hospitable environment for foreign investment are hallmarks of Estonia's free-market-based economy. Estonia also has made excellent progress in regard to structural adjustment.

The privatization of state-owned firms is virtually complete, with only the port and the main power plants remaining in government hands. The constitution requires a balanced budget, and the protection afforded by Estonia's intellectual property laws is on a par with that of Europe's. In early 1992 both liquidity problems and structural weakness stemming from the communist era precipitated a banking crisis. As a result, effective bankruptcy legislation was enacted, and privately owned, well-managed banks emerged as market leaders. Today, near-ideal conditions for the banking sector exist. Foreigners are not restricted from buying bank shares or acquiring majority holdings.

Tallinn's fully electronic Stock Exchange opened in early 1996 and was bought out by Finland's Helsinki Stock Exchange in 2001. It is estimated that the unregistered economy provides almost 12% of annual gross domestic product (GDP).

Estonia is nearly energy independent, supplying more than 90% of its electricity needs with locally mined oil shale. Alternative energy sources such as wood, peat, and biomass make up about 9% of primary energy production. Estonia imports needed petroleum products from western Europe and Russia. Oil shale energy, telecommunications, textiles, chemical products, banking, services, food and fishing, timber, shipbuilding, electronics, and transportation are key sectors of the economy. The ice-free port of Muuga, near Tallinn, is a modern facility featuring good transshipment capability, a high-capacity grain elevator, chill/frozen storage, and brand-new oil tanker off-loading capabilities. The railroad, privatized by an international consortium in 2000, serves as a conduit between the West, Russia, and other points to the east.

Estonia still faces challenges. Agricultural privatization has caused severe problems for farmers needing collateral to be eligible for loans. The income differential between Tallinn and the rest of the country is widening. Standards of living have eroded for the large portion of the population on fixed pensions. The formerly industrial northeast section of Estonia is undergoing a severe economic depression as a result of plant closings.

During recent years the Estonian economy has continued to grow. Estonian GDP grew by 6.5% in 2001 and by 6.0% in 2002. Inflation declined modestly to 4.2% in 2001; for 2002 the inflation rate was 2.7%. The unemployment rate in 2002 was 10.6%. Estonia joined the World Trade Organization in 1999. Estonia concluded European Union (EU) accession negotiations in December 2002 and signed the EU Accession Treaty in April 2003. In a September 2003 referendum, Estonian citizens voted to amend their constitution and join the European Union. Estonia formally joined the EU on May 1, 2004, one of 10 states, mostly from eastern Europe, to join the Union on that date. While the effects of EU membership will not be measurable in the short term, membership will likely have a positive influence on Estonia's gross domestic product, exports of goods and services, and the inflow of foreign investment.

Foreign Trade
Estonia's liberal foreign trade regime, which contains few tariff or nontariff barriers, is nearly unique in Europe. Estonia also boasts a national currency which is freely convertible at a fixed exchange rate, and conservative fiscal and monetary policies.

Estonia's business attitude toward the United States is positive, and business relations between the United States and Estonia are increasing significantly. The primary competition for American companies in the Estonian marketplace are European suppliers, especially Finnish and Swedish companies.

Total U.S. exports to Estonia in 2002 were $164 million, forming 3% of total Estonian imports. In 2002 the principal imports from the United States were meat and edible meat offal, poultry, boilers, and other electrical machinery and transmission/recording apparatus for radio/TV. The May 2004 round of EU expansion is likely to yield, over time, positive benefits for U.S. business. However, Estonia's membership is disadvantageous for certain U.S. exports to Estonia. For example, since January 2000 Estonia has imposed import tariffs on certain agricultural products from third countries, including the United States, in accordance with EU rules and regulations.

Estonia, being a small country of 1.4 million people, relies on its greatest natural asset--its location at the crossroads of East and West. Estonia lies just south of Finland and across the Baltic Sea from Sweden, both EU members. To the east are the huge potential markets of northwest Russia. Having been a member of the former Soviet Union, Estonians know how to do business in Russia and in other former Soviet countries. Estonia's modern transportation and communication links provide a safe and reliable bridge for trade with former Soviet Union and Nordic countries. According to the RIPE Network Coordination Centre (www.ripe.net), Estonia has the highest Internet-connected hosts/population ratio in central and eastern Europe and also is ahead of most other EU countries. Latest surveys indicate that 41% of the Estonian population regard themselves as Internet users.

Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank's CD-ROM or via the Internet. Please contact STAT-USA at 1-800-STAT-USA for more information. Country Commercial Guides can be accessed via the World Wide Web at the U.S. Department of Commerce's site. They also can be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information/assistance and country-specific commercial information should contact the U.S. Department of Commerce, Trade Information Center by phone at 1-800-USA-TRAD(E) or by fax at 1-202-482-4473.

DEFENSE
Estonia achieved its main security and defense policy objective by accepting a formal invitation at Prague in November 2002 to join the North Atlantic Treaty Organization (NATO) Alliance. Accession to NATO has been included in all coalition agreements of all Estonian governments since the 1991 restoration of independence, including the present government. The same objective also is stated in the National Security Concept of the Republic of Estonia, approved by the Parliament in March 2001. Estonia officially became a member of the North Atlantic Treaty Organization on March 29, 2004 after depositing its instruments of treaty ratification in Washington, DC.

The 2003 state budget allocated 2% of GDP for defense expenditures. The United States is among the countries with which Estonia has very intensive cooperation in the defense and security field.

FOREIGN RELATIONS
Estonia is a party to 181 international organizations, including Bank for International Settlements (BIS), Council of the Baltic Sea States (CBSS), Customs Cooperation Council (CCC), Council of Europe (CE), Euro-Atlantic Partnership Council (EAPC), European Bank for Reconstruction and Development (EBRD), Economic Commission for Europe (ECE), European Union (EU), Food and Agriculture Organization (FAO), International Atomic Energy Agency (IAEA), International Bank for Reconstruction and Development (IBRD, or World Bank), International Civil Aviation Organization (ICAO), International Confederation of Free Trade Unions (ICFTU), International Red Cross and Red Crescent Movement (ICRM), International Finance Corporation (IFC), International Federation of Red Cross and Red Crescent Societies (IFRCS), International Hydrographic Organization (IHO), International Labor Organization (ILO), International Monetary Fund (IMF), International Maritime Organization (IMO), International Criminal Police Organization (Interpol), International Olympic Committee (IOC), International Organization for Migration (IOM, observer), International Organization for Standardization (ISO, correspondent), International Telecommunication Union (ITU), Organization for the Prohibition of Chemical Weapons (OPCW), Organization for Security and Cooperation in Europe (OSCE), Partnership for Peace (PFP), United Nations (UN), United Nations Conference on Trade and Development (UNCTAD), United Nations Educational, Scientific, and Cultural Organization (UNESCO), United Nations Mission in Bosnia and Herzegovina (UNMIBH), United Nations Interim Administration Mission in Kosovo (UNMIK), United Nations Truce Supervision Organization (UNTSO), Universal Postal Union (UPU), Western European Union (WEU, associate partner), World Health Organization (WHO), World Intellectual Property Organization (WIPO), World Meteorological Organization (WMO), World Trade Organization (WTO).

U.S.-ESTONIA RELATIONS
The relationship between Estonia and the United States of America has been constant and strong since Estonia first became independent. Because of its global political and economic influence, the United States is one of Estonia's most important partners.

The United States recognized the Republic of Estonia on July 28, 1922. The first Estonian diplomatic mission in the United States was opened in the same year. It continued its activities throughout the period of illegal occupation by the Soviet Union from 1940 to 1991. U.S. authorities recognized Estonia's diplomatic mission as a legal representative of the Republic of Estonia. Indeed, the recognition of the legal continuity of the Republic of Estonia has been the cornerstone of Estonian-U.S. relations.

The U.S. reopened its Embassy in Tallinn on September 4, 1991, soon after the restoration of Estonia's de facto independence on August 20, 1991. Relations between the two countries have since developed at a rapid pace.

The U.S. Ambassador to Estonia is Joseph M. DeThomas, who took the oath of office on November 9, 2001. Mr. J�ri Luik has been Estonia's Ambassador to United States since September 2003. Estonia also is represented in the United States by a Consulate General in New York and three Honorary Consuls: Jaak Treiman in Los Angeles, Mart Kask in Seattle, and Scott E. Schul in Maine.

U.S.-Baltic Charter
The Presidents of the United States, Estonia, Latvia, and Lithuania signed the U.S.-Baltic Charter in Washington on January 16, 1998. The main goals of this charter are to support Estonia's, Latvia's, and Lithuania's full integration into European and transatlantic structures, and to establish the general principles and aims for cooperation. The charter underlines the importance of political, defense, security, and economic cooperation. It is a statement of the United States' real, profound, and enduring interest in the security and independence of the Baltic states.

The U.S. commitment toward the Baltic and Nordic states has been reaffirmed with the articulation of the Enhanced Partnership in Northern Europe (e-PINE) in October 2003. E-PINE recognizes the progress made in the region over the preceding decade as well as the challenges that remain, both in the region and with states beyond the borders of an expanding EU and NATO. E-PINE seeks to build on past success and existing habits of multilateral cooperation in the region. Through e-PINE, the United States is engaging all eight Nordic and Baltic states on a shared agenda that focuses on three areas: political security; healthy societies and healthy neighbors; and vibrant economies. To carry out this coordination, e-PINE includes a forum for "8 plus 1" cooperation as well as contacts among the states at the working level.

E-PINE represents the evolution of the previous guiding U.S. policy, the Northern Europe Initiative (NEI). NEI, launched in 1997, promoted regional cooperation in northern Europe as a way of further integrating the Baltic states and northwest Russia and of strengthening our relations with the Nordic countries. NEI programs addressed key problems in Estonia and its neighbors--including HIV/AIDS, environmental pollution, corruption, and social integration--and built cross-border linkages to contribute to stability and security.

Principal U.S. Officials
Ambassador--Joseph DeThomas
Deputy Chief of Mission--Mark Pekala
Head of Political/Economic Section--Stuart Dwyer
Management Officer--Thatcher Scharpf
Legal Attach�--James Nixon
Consular Officer--Paul Mayer
Public Affairs Officer--Thomas Hodges
Defense Attach�--Commander Eric Olson (USN)
Chief of Office of Defense Cooperation--LTC Kenneth Pope

The U.S. Embassy in Estonia is located at Kentmanni 20, Tallinn [tel. (372) 66 88 100].

For the most current version of this Note, see Background Notes A-Z.

[This is a mobile copy of Estonia (05/04)]