ESTONIA foreign companies and 140 branch offices of foreign companies. The amount of foreign capital invested in international enterprises reached almost 300 million rubles. There are expectations that the respective turnover in 1991 will reach 200 million rubles. This figure would bring the share of joint ventures in the total output of Estonian economy to 5-7 percent; in 1990 it was 2.5 percent. As a former republic of the Soviet Union it is difficult to determine the amount of Estonian foreign debt within the Soviet external debt. Discussions with the countries of the Commonwealth of Independent States (CIS) on this matter are on-going. 5. Significant Barriers to U.S. Exports The objective of Estonian trade policy is to move towards European and World markets. The current task is to change the former trade structure which has been oriented to the Soviet market and to try to raise the quality and competitiveness of Estonian goods. In 1989, the U.S. was Estonia's third largest importer among developed countries with 4.7 percent of overall Estonian exports. (Finland, with 14 percent, and Germany, with 6.7 percent were first and second, respectively). Estonia has high overall levels of trade, a consequence of the extreme specialization which resulted from the centralized planning process. Due to quality differentials between Estonian and world class products, as well as to transport costs and market familiarity factors, the Soviet Union will remain Estonia's natural market, at least initially. One significant barrier to trade is that Estonia is still part of the old Soviet monetary system and the ruble is not convertible. As such, Estonia's ability to buy hard currency imports is severely curtailed. Other barriers are the absence of adequate telecommunications and banking facilities, uncertainty over tax reforms, lack of Western accounting firms and standards, and shortage of business and office space. Foreigners' rights to hold land are unclear. The Law of Land passed the Supreme Council in October 1991, but leaves open the right of foreigners to purchase land. 6. Export Subsidies Policies In 1991, the Estonian Government decided to liberalize its foreign trade. There are no licenses or quotas on goods exported for hard currency. A government monopoly exists only for "restricted" items (wood, cement, meat and meat products, milk and milk products, fur, potatoes, grain, liquor, tobacco products, mineral water, fish and fish products). ESTONIA 7. Protection of U.S. Intellectual Property As a former republic of the Soviet Union, Estonia was a member of the World Intellectual Property Organization, the Universal Copyright Convention, the Paris Convention for the Protection of Industrial Property, the Madrid Agreement Concerning the International Registration of Marks, the Patent Cooperation Treaty and the Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purpose of Patent Procedure. The right of the inventor can be protected, at the choice of the applicant, either by a certificate or by patent, but only a patent provides the exclusive right for the applicant to use the invention. A certificate of authorship acknowledges the authorship of the inventor and grants the inventor the rights and advantages stipulated by the legislation in force, whereas the exclusive right to use the invention belongs to the state for 15 years. Patents have been highly taxed. Estonian patent experts are currently working on more comprehenive patent legislation. Foreign works have enjoyed copyright protection in Estonia. At present, foreign authors and publishers can negotiate publication contracts with Estonian publishing houses. In November 1990, Estonia formed a governmental working group to study the need for new intellectual property rights legislation. Estonia would like to join the Berne Convention and to become a member of the World Intellectual Property Organization. The working group has completed drafting a law on copyright protection in accordance with the requirements of the Berne Convention. Currently, there are some cases of copyright infringement, but effective enforcement is lacking. The governmental working group is also working on improving Estonian patent and trademark law. New separate legislation will be issued on the protection of software integrated circuits, semiconductor chips, and satellite signals. Soviet labor law and practice were enforced in Estonia until the August coup attempt. Since that time, Estonia has moved to reform its Labor Code to permit the formation of independent trade unions, and in January 1992 it refjoined the International labor organization. Several political strikes took place during 1991 without police interference. The major trade union, formerly the Estonian branch of the sole Soviet labor confederation, is now a purely Estonian organization and is seeking to reform itself under the name of the Central Organization of Estonian Trade Unions (EAKL). it claims about 650,000 members orgainized in 34 unions. A smaller rival Confederation of Free Trade Unions has also been formed recently. ESTONIA b. The Right to Organize and Bargain Collectively Under Soviet law, Estonian workers did not enjoy the right to bargain collectively. Under the old system, the union was essentially an arm of the communist Party, with the function of distributing fringe benefits such as housing and vacation trips. Both the employers and the unions were organs of the State and Party system. Although Estonian workers now have the right to bargain collectively, the private sector is only beginning to emerge, and collective bargaining is still virtually nonexistent. The EAKL still looks to the Government to resolve labor issues. Early in 1991, before Estonia declared its independence, the Estonian Government consulted with the EAKL before establishing a new minimum wage. C. Prohibition of Forced or Compulsory Labor Compulsory labor was common in Soviet-administered Estonian prisons prior to August. Estonia has moved quickly to improve conditions since August. d. Minimum Age for Employment of Children According to labor law prevailing in Estonia, the statutory minimum age for employment is 16. Minimum age and compulsory education laws are enforced by state authorities through inspections. Labor conditions in Estonia are similar to but usually better than those in the Soviet Union. Under Estonian law, the maximum permitted work week is 41 hours. the average workweek is 40 hours for most white-collar workers and 41 hours for most blue-collar workers. According to union sources, the minimum wage rate agreed to in early 1991 between the EAKL and the Government was overtaken by inflation by the end of the year. The law establishes minimum standards of occupational health and safety, which have been widely ignored. Extent of U.S. Investment in Goods Producing Sectors There is no sector by sector data available on U.S. investment in Estonia. FINLAND Key Economic Indicators (Billions of Finnmarks (FIM) Unless Otherwise Noted) 1/ M1 has been recalculated by the Bank of Finland to include currency in circulation, Finnmark check and postal checking account deposits, transactions account deposits as well as FINLAND foreign exchange account deposits held by the public. 2/ 3-month Helibor rate. Helibor (Helsinki interbank offered rate) is Finland's commercial banking reference rate. Finland's economy has moved sharply into recession in 1991, with a projected GNP decline of at least five percent. The recession is the result of an overheated economy, excessive debt, declining productivity, overspending on the part of the government, businesses and consumers, economic difficulties in Finland's European export markets, and the collapse of Fenno-Soviet trade. The latter had accounted for as much as 25 percent of Finnish trade and is now below five percent of total trade. The recession has accelerated discussion about how to improve lagging Finnish competitiveness, including measures to promote foreign investment, privatization, wage restraint, decreased support to agriculture, and liberalization of Finland's largely closed service sector. Some structural change will be mandated in any event when the European Economic Area (EEA) agreement between the European Community (EC) and the European Free Trade Association comes into force. Eventual membership in the EC, an increasing possibility, would bring further changes. The current Finnish government, composed of the Center Party and the National Coalition (conservative) Party as well as two smaller parties, has not generally turned to major countercyclical spending to combat the recession. Widely expected to devalue the finnmark upon taking office in spring 1991, the government instead pegged the currency to the European Currency Unit (ECU) in June 1991. The intention was to impose monetary and fiscal discipline and force structural changes in the economy by bringing costs down through internal measures, and not by trying to restore competitiveness through devaluation. A concurrent aim was to keep labor costs down through wage restraint negotiated at the national level. The policy was not popular in all quarters, however, particularly among some of Finland's export industries and within some labor unions. In November 1991, following a massive outflow of foreign currency and sharply increased interest rates, the government agreed to a finnmark devaluation of 14 percent against the ECU. The government has not abandoned its aim of maintaining wage restraint and restoring competitiveness through economic restructuring. Finland's economy is a mixed one, with approximately 20 percent of manufacturing capacity, and four of the 10 largest companies, in government hands. Some 10 percent of banking services and 30 percent of the service sector are government-owned as well. A government committee has studied the question of privatization, but no final decisions have yet been made. The state petroleum company Neste may be the first fully state-owned company to be privatized, at least partially, under this scenario. Employment and regional development considerations may slow down the privatization of state-owned companies in the industrial sector, however. government has generally eschewed industrial targeting or The |