Pre-accession concerns over Poland’s opening to increased competition and a market flooded with goods imported from the European Union have proved groundless. On the contrary, in the first year of EU membership, Polish companies have been conquering foreign markets.

“Polish enterprises are coping well on the single EU market, the best proof of which are growing exports and good balance-sheet results,” said Secretary of State at the Ministry of the Economy and Labor Małgorzata Ostrowska at the May conference Enterprise—One Year After Accession to the European Union. According to the Central Statistical Office (GUS), the total value of export goods increased in 2004 by 37.7 percent in dollar terms and 26 percent in euro terms. This shows that the trend towards fast growth in exports not only continued in 2004 but even accelerated considerably.

The total value of imports increased last year by 29.3 percent in dollar terms and 18.3 percent in euro terms. This rate of growth was also faster compared to 2003. The absolute increase in exports was higher than in imports, which brought the trade deficit down by over 1.3 billion euros to 11.4 billion euros.

Nearly 80 percent of Polish exports was sold on the enlarged EU market and around 68 percent of the country’s imports originated from that market. The deficit in Poland’s trade with the single EU market declined by 2.2 billion euros, from 3.3 billion euros in 2003 to 1.1 billion euros last year.

“More importantly, this rapid increase in exports continues despite the strengthening of the zloty in real terms. This reflects well on the competitiveness of Polish companies,” said Deputy Minister of the Economy Mirosław Zieliński. Despite concerns voiced by entrepreneurs in connection with the appreciation of the zloty at the beginning of the year, exporters are coping very well. In the first quarter of 2005, exports reached 16.3 billion euros, which represented a total annual increase of as much as 23.5 percent.

■ Polish hits
Polish companies have not suffered as a result of a strong zloty or problems experienced by European economies. Germany has been Poland’s main trading partner for years, with nearly one-third of Polish exports sent to that market. Italy ranks second. Despite the fact that the two countries are contending with economic problems, Polish exporters have not reported a lack of demand from them.

The weakening of Europe’s economy does not have to cause problems to Polish exporters. On the contrary, in times of economic slowdown, consumers look for cheaper substitutes for products and services. Cheaper does not mean poorer quality because Polish companies compete not only in price but also quality, which is increasingly high.

The opening of borders and the total removal of customs barriers provided easier access to the markets of EU member states for Polish producers and trade companies and reduced commercial and transport costs. According to Ministry of the Economy experts, the continued fast rate of growth in exports demonstrates that last year’s high export activity was triggered not so much by EU accession itself but a long-lasting process in which Polish products intended for export were becoming increasingly modern.

The lifting of the last trade barriers, which coincided with EU accession, merely provided an additional stimulus to export growth. The stimulus was especially visible in agri-food products, including fruits and vegetables, beef, poultry and dairy products.

The Polish exports which sell best on the EU market are agri-food products (an average monthly rise of $153 million compared to January-April 2004), mineral products, particularly coal and coke (an increase of $110 million) and metallurgical products (up by $96 million).

A rise in the average monthly value of exports was noted in Poland’s trade with 17 out of 24 countries of the enlarged EU. Poland recorded a surplus in trade with 15 countries of the enlarged EU, particularly with the UK (over 900 million euros), Germany (around 650 million euros), Lithuania (635 million euros) and Denmark (over 260 million euros). The highest deficits were noted in Poland’s trade with Italy (nearly 2 billion euros), France (almost 1.2 billion euros) and Finland (over half a billion euro).

■ Returning to the East
Considerable growth in exports has been noted with countries which entered the EU together with Poland. This may be attributed to their adoption of EU rules in mutual relations, replacing bilateral and multilateral agreements previously in force. Poland’s accession to the EU and the subsequent adoption on May 2004 of EU trade policy principles in relation to third countries produced measurable benefits in terms of the value of Polish exports to non-EU markets. In 2004, Polish exports to those markets reached over 12.5 billion euros, which represented an increase of over 36 percent on the previous year.

Polish exports are also expanding on eastern markets. In 2004, Polish exporters sold $3 billion worth of goods on the Russian market. This represented an almost 90-percent increase compared to the previous year and a rise by some $700 million compared to 1997, a record year for Polish exports. A few years ago many analysts argued that Poland should return to eastern markets as soon as possible because after EU accession such efforts may be too late. Meanwhile, a turning point in Poland’s trade with the East took place in the first year of EU membership.

Economists expected that exports would weaken slightly this year, replaced by investments as the driving force of the economy. Such projections were also made before 2004 and also proved incorrect. The fact that exports grow much faster than imports, and this despite a very high reference level for the previous year, indicates that exports will continue to drive the economy at least in the first half of 2005.

The Ministry of the Economy also expects the favorable situation of Polish trade to continue. “We are moving towards a positive balance of trade with EU countries. We can see no threat of Poland being flooded with goods from the EU,” Zieliński said.