Latvia possesses a unique geographical location on the shore of the Baltic Sea and at the centre of the Baltic countries. For centuries, this has placed Latvia squarely at a crossroads of international commerce. Since the 14th century, Latvia has been a major commercial hub between west and east, and was at the centre of the Hanseatic League, the world’s first Free Trade Area.
Foreign trade in Latvia has consistently increased since the regaining of independence, particularly after Latvia’s accession to the EU. According to the data provided by the Central Statistical Bureau of Latvia, in 2020 the value of total exports increased by 2.6% and imports decreased by 4.7% compared to the previous year. In 2020, exports to EU countries made up to 65.6% of the total volume of Latvian exports and increased by 90.6 million euro or 1.0% compared to 2019.
In 2020 both machinery and mechanical appliances, electrical equipment and wood articles comprise the most significant commodity groups in Latvian exports and has constituted 18.9% and 16.5%, respectively, followed by prepared foodstuffs, vegetable products and base metals and articles of base metals.
The most important commodities among Latvian imports were machinery and mechanical appliances making up 22.5% of the total value of imports; chemical products – 10.7% and prepared foodstuffs – 9.6%.
In 2020, Latvia’s biggest trading partners were Lithuania (17.2% of Latvia's total trade turnover), Estonia (10%), Germany (8.9%), Russia (7.2%) and Poland (7.1%).