Political dialogue between Latvia and Estonia is constant and active at all levels. Both countries are linked by excellent co-operation, common interests in the Baltic Sea Region and a close partnership within EU and NATO. Successful practical co-operation has been established between the parliaments of the countries, sectoral ministries, local authorities and non-governmental organizations.

History of Diplomatic Relations

Diplomatic relations between Latvia and Estonia were renewed on 6 September 1991.

Ambassadors of the Republic of Estonia to Latvia:

• Leili Utno, as of 29 June 1992
• Toomas Tiivel, as of 22 February 1994
• Juhan Haravee, as of 14 April 1998
• Toomas Lukk, as of 27 August 2002
• Jaak Jõerüüt, as of 10 October 2006

Ambassadors of the Republic of Latvia to Estonia:

• Aldis Bērziņš (Chargè d'affaires)
• Anna Žīgure, as of 3 January 1992 (residing in Helsinki)
• Andris Piebalgs, as of 31 August 1995
• Gints Jegermanis, as of 19 February1998
• Edgars Skuja, as of 14 January 2002
• Rihards Mucins, as of 27 October 2005
• Kārlis Eichenbaums, as of 28 August 2008

Economic relations

Estonia is one of Latvia's most significant economic partners, and mutual trade turnover is growing year by year. in the first half of 2008, Estonia was Latvia's second largest export partner (362,6 million EUR) and the fourth largest import partner (335.5 million EUR).

The principal export goods from Latvia to Estonia are base metals and articles of base metals, machinery and mechanical appliances, electrical equipment. Latvia imports from Estonia mainly vehicles (31% of all import goods), and also products of chemical and allied industries.

Trade

(according to data of the Central Statistical Bureau of the Republic of Latvia)

1^st half of 2008:

For the first half of 2008, Latvia had a positive trade balance with Estonia: +27,041,179 EUR. In 2007, Latvia had a negative trade balance with Estonia at -68,740,524 EUR.

• Exports:

1. Lithuania – 468,760,197 EUR or 16.24 % of total exports from Latvia

2. Estonia – 362,588,017 EUR or 12,56 %

3. Russia –312,967,084 EUR or 10,84 %

4. Germany – 250,705,977 EUR or 8,68 %

5. Sweden – 209,495,056 EUR or 7,26 %

• Imports:

1. Lithuania – 744,722,788 EUR or 25,80 % of total imports to Latvia

2. Germany – 636 044 174 EUR or 22,03 %

3. Russia – 525,418,285 EUR or 18,20 %

4. Estonia – 335,546,838 EUR or 11,62 %

5. Poland – 312,417,009 EUR or 10,82%

Principal exports to Estonia by type of commodity in 2007,  million  EUR 

Type of commodity	Million EUR	% of total exports
Total	362.59	100 %
Base metals and articles of base metals: - Flat-rolled products of iron or non-alloy steel – 36%	50.39	13.9
Machinery and mechanical appliances; electrical equipment: - Monitors and projectors, television sets, video monitors, video projectors – 25%	47.93	13.2
Vehicles: - Motor cars and other motor vehicles designed principally for the transport of persons – 60%	45.25	12.5
Wood and articles of wood: - Wood in the rough – 36% - Fuel wood, wood in chips or particles, sawdust, etc. – 24%	41.64	11.5
Products of chemical and allied industries: - Medicaments in measured doses (or in packages for retail sales) – 26% - Prepared binders, carbides, additives for cements – 15% - mineral or chemical fertilisers – 10%	37.58	10.4
Prepared foodstuffs: - Prepared or preserved fish – 27% - Water, incl. mineral water – 11% - Bread, pastry, biscuits and other baker's wares – 7.7%	29.91	8.2
Textiles and textile articles	24.21	6.7
Plastics and articles thereof; rubber and articles thereof	14.89	4.1

Principal imports from Estonia by type of commodity in 2007,  million EUR 

Type of commodity	Million EUR	% of total exports
Total	335,55	100 %
Vehicles - Motor cars and other motor vehicles designed principally for the transport of persons – 77%	68,28	20,3
Products of chemical and allied industries: - Ammonia, anhydrous or in aqueous solution - 44%	41,89	12,5
Base metals and articles of base metals: - Ferrous waste and scrap; ingots – 19% - Flat-rolled products of iron and non-alloy steel – 23%	38,30	11,4
Machinery and mechanical appliances, electrical equipment: - Automatic data processing equipment and units thereof – 13% - Insulated wire and cable and other conductors-8%	34,96	10,4
Prepared foodstuffs: - Waters, incl. mineral waters- 17%	30,67	9,1
Live animals and animal products	20,93	6,2
Mineral products	18,43	5,5

Flow of trade between Latvia and Estonia from 2001 to 2008 Q2, in EUR

Flow of trade between Latvia and Estonia from 2001 to 2008 Q2, in EUR

Investment (data of the Bank of Latvia, Lursoft database)

Estonian investment in Latvia

Accrued foreign direct investment^[1] (positions) in Latvia as at end 1st quarter of 2008:

1. Estonia – LVL 811.7million or 15.3 % of total foreign investment in Latvia

2. Sweden – LVL 755.5m or 14.3 %

3. Denmark – LVL 468.4m or 8.8 %

4. Germany – LVL  445.7m or 8.4 %

5. Finland – LVL 336.9m or 6.3 %

As of 25 August 2008, 1460 Estonian-Latvian joint ventures were listed with the Register of Enterprises of the Republic of Latvia (2nd place), and the accrued Estonian investment in equity capital of Latvian companies (from 1991) amounts to 288.5 million LVL (1st place). It must be added that traditionally the major part of Scandinavian investments (Swedish, in particular,) 'enter' Latvia through Estonia, thus artificially increasing the amount of Estonian investment in Latvia.

33 Estonian companies have invested over 0.5 million LVL in the basic capital of Latvian companies.

Principal Estonia's investors in Latvia (>2 million LVL) from 1 January 1991 to 25 August 2008:

1. Hansapank As (100% A/S "Hansabanka") – 186.05

2. AS Gild Financial Advisory Services (100% SIA "Andrejosta RE", 100% SIA "Kurzemes investīcijas") – 8.2

3. AS Merko Ehitus (100% SIA "Merks") – 8.10

4. AS Alexela oil (100% SIA "Alexela Oil Latvia") – 6.79

5. A Le Coq Group (96.06% A/S "Cēsu alus") – 6.38

6. Skinest Projekt As (49.00% A/S "Daugavpils lokomotīvju remonta rūpnīca") – 4.06

7. Stora Enso Timber As (100% AS "Stora Enso Timber") – 3.22

8. Olympic Entertainment Group OU (100% SIA "Olympic Casino Latvia", 100% SIA "Ahti") - 3.07

9. AS Lohmus Haavel & Viisemann (3.8% AS "Latvijas naftas tranzīts") - 2.83

10. Osauhing Top Connect (100% SIA "Radio Telecommunication Network") - 2.78

11. Aeroc International As (100% SIA "Aeroc", 50% SIA "Vest Mark") – 2.44

12. Spacecom AS (25,27% Daugavpils lokomotīvju remonta rūpnīca", 100% SIA "Hoover") - 2.10

13. AS Tartu Veski (100% SIA "Invest DD") - 2.05

Latvia's investments in Estonia

As of the end of the 1^st quarter 2008, direct accrued investments from Latvia in Estonia amounted to 17.2 million LVL (7^th place). Investments have been made in financial services (6.5 million or 38%), in the processing industry (3.6 million or 21%), and in wholesale and retail sales (3.0 million or 17%).

Education

Co-operation between Latvia and Estonia in the area of education takes place on basis of trilateral co-operation agreements among the Baltic states, as well as within educational programmes and projects between the Baltic states and Nordic countries, Baltic Sea countries, the Council of Europe and the European Union. Each year meetings by Ministers of Education of the Baltic states and specialists of the Ministries are held to discuss the most important issues in the drafting and implementing of education policies in each country, as well as current EU educational policy issues.

Estonian and Latvian universities are engaged in wide-ranging co-operation. The University of Latvia, the Riga Stradins University and Valmiera University College have signed bilateral co-operation agreements with the University of Tartu. The Latvian Academy of Culture has concluded a co-operation agreement with the Academy of Music and Culture of Estonia within the framework of the Socrates/Erasmus Programme.

Estonian students regularly make use of Estonian government scholarships for full-time studies at the University of Latvia. About a tenth of the students of the Riga Stockholm School of Economics come from Estonia.

Regular exchanges of students and instructors and joint research activities take place between tertiary education institutions; various conferences and events are organized. The Academy of Sciences of Latvia and the Academy of Sciences of Estonia have signed an agreement on the exchange of researchers for 75 days per year.

Since 1989, the Riga Estonian Secondary School has been open in Riga.

Culture

Active co-operation has developed between Latvian and Estonian museums, theatres, orchestras, libraries and archives. On 29 May 2007, the Daile theatre visited Tallinn with a guest performance of a play Zemes nodoklis (Land tax) by Mara Zalite; on 16 October, personal exhibitions of Ilmars Blumbergs and Elita Deičmane were opened in Tallinn; on 15 November, an exhibition prepared jointly by the Bank of Latvia and the National Historic Museum of Latvia and entitled Money in Latvia: History and Contemporaneity was opened at the Eesti Pank Museum of the Bank of Estonia; on 18 November, the vocal group Cosmos visited Tallinn.

On 8 April 2008, an exhibition by Sarmite Drudze, a Latvian textile artist, was opened in the Winter Garden of the Estonian National Opera house Estonia. On 15 August, an exhibition Latvian Modernist Niklavs Strunke was opened at the Adamson-Eric Museum in Tallinn, with the participation of cultural, public and political figures of Estonia, foreign diplomats, and Latvians residing Estonia.

Home Affairs and Justice

The State Police of Latvia has developed close co-operation with its Estonian counterpart, taking part both in the Task Force on Organised Crime in the Baltic Sea Region and in other operational undertakings. The State Security Police actively co-operates with its counterpart in Estonia. Within the framework of their partnership, regular meetings are held between senior officials and experts of security authorities. A constructive, professional co-operation has developed between border guard authorities, fire and rescue services, court administrations, naturalisation boards, state land services and other institutions.

Defence

Co-operation between Latvia and Estonia in the area of defence takes place mainly within joint military projects of the Baltic states. Co-operation between the air forces continues within the framework of the common air space surveillance system BALTNET, but co-operation between naval forces – within the naval squadron BALTRON. The Baltic Defence College in Tartu, BALTDEFCOL, is operating successfully. On 11 June 2008, President Valdis Zatlers of Latvia visited the college. Currently six Latvian instructors are working at BALTDEFCOL and eighteen Latvians are among its students.

Transport and communications

Latvia and Estonia actively participate in the planning and implementation of bilateral and trilateral transport projects of the Baltic states.

In order to jointly address and co-ordinate issues related to international road transportation, regular meetings take place for representatives of the Ministries of Transport, road transport administrations and international road transport associations.

Latvia and Estonia are traversed by the Via Baltica transit corridor. Both countries have a well-developed railway network, and are both participating in the implementation and development of the Rail Baltica project.

On 25 April 2008, by the extension of the railway route Riga – Lugazi, passenger rail traffic was resumed as far as the town of Valga in Estonia.

On 1 March 2007, an Estonian company Hansabuss launched a bus line Tallinn-Riga, which provides services to its passengers on special business class buses. The new business class bus service is the first line of this type in the Baltic states. In August 2006, Hansabuss opened a city tour route Riga City Tour.

The airline airBaltic operates regular flights between Riga and Tallinn. In May 2007, the company launched flights between Liepaja and Kuressaare.

On 7 April 2006, a ferry of the Estonian company Tallink opened a line between Riga and Stockholm. Since 26 April 2007, Vana Tallinn, another Tallink ferry, has been providing daily transportation between both cities.

VAS Latvijas Pasts has developed close co-operation with the Eesti Post within the framework of the Baltic Postal Union and the Nordic Postal Union. 

Cross-border co-operation

Cross-border co-operation between Latvia and Estonia is very active. Various projects have been implemented with financial support from the EU, mainly in the areas of education, culture, promotion of tourism, environment protection and health care. High on the agenda are issues of economic development and the enhancement of the quality of the workforce, as well as areas related to information and communications.

Particularly close co-operation has developed between the towns of Valka and Valga. The two towns hold various joint cultural, educational, sports and tourism events on a regular basis.

Joint plans for both cities for the development of education, culture and sports have been adopted and approved. Valka and Valga co-operate within an INTERREG IIIC project "City Twins". On 8 June 2007, a new Valka-Valga co-operation agreement was signed during the Valka-Valga town festival.

On 28 February 2008, the launching event of the Estonia-Latvia cross-border co-operation programme for 2007-2013 took place in Valga. The programme offers opportunities to receive funding both for public and private sector projects that provide solutions to the regions' problems, by implementing activities at cross-border level.

Starting from 1 September 2007, Valga schools offer the opportunity for learning Latvian. In accordance with the new Valka-Valga joint education development plan, Valga's future project is to build a new vocational school, which will enrol both Latvian and Estonian young people and will be located near the border with Latvia. The Latvian side will contribute to the project by providing teaching staff.

A future project in the field of education for Valka is the establishment of an international study centre, which will be based on the Valka branch of the University of Latvia. Its aim is to provide internationally competitive quality education to students of the Baltic Sea region.

Reciprocal visits by senior officials since 2005

Legal framework

Database on bilateral agreements concluded with Estonia

Links on Estonia

Electronic encyclopaedia of Estonia: http://www.estonica.org

President: http://www.president.ee

Parliament: http://www.riigikogu.ee

Government: http://www.valitsus.ee

Foreign Ministry: http://www.vm.ee

[1] Direct investment= investment in equity capital of companies + other capital transactions, incl. reinvested profits and parent company loans to subsidiaries