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 2021 the value of total exports increased by 24.0% and imports decreased by 28.2% compared to the previous year. In 2021, exports to EU countries made up to 67.0% of the total volume of Latvian exports and increased by 2.3 billion euro or 26.6.% compared to 2020.
In 2021 both wood articles and machinery and mechanical appliances, electrical equipment comprise the most significant commodity groups in Latvian exports and has constituted 19.2% and 16.3%, respectively, followed by base metals and articles of base metals, vegetable products and prepared foodstuffs.
The most important commodities among Latvian imports were machinery and mechanical appliances making up 20.1% of the total value of imports; transport vehicles - 10.7% and chemical products – 10.7%.
In 2021, Latvia’s biggest trading partners were Lithuania (17.5% of Latvia's total trade turnover), Estonia (9.7%), Germany (9.0%), Russia (8.3%) and Poland (7.1%).