Economy and Trade
I) Economy
Austria became a member of the European Union (EU) in January 1995, since then access to the European markets has been improved. Integration into the common market is now complete. Austria is one of the richest and most stable members of the EU.
Austria’s highly developed advanced industrialised sector is now partnered with a significant service sector, which already generates 65 per cent of GDP. The secondary sector produces a third of GDP, whilst only 2 per cent of GDP is generated by primary activities. Machinery, steel, chemicals and automobiles (especially engines and transmissions), food & beverages, mechanical & structural engineering, and electrical & electronic goods are the most important industrial products. The country’s electronics technology is renowned around the world, particularly thanks to custom designed electronic goods.
Austrian industry consists mostly of small and medium-sized enterprises. Roughly 85 per cent of all companies have fewer than 100 employees. Another 12 per cent employ up to 500 people, 1.6 per cent up to 1,000, and only 1 per cent have 1,000 or more people on the payroll.
Tourism plays a very important role in the Austrian economy. There are countless large beautiful lakes, 47% of the country is covered with forest and some 26% is meadow or grazing land. In 2003 the number of international arrivals in Austria reached 19.1 million (representing over 86 million overnight stays and 3/4 of total overnight stays). Many of these visitors came from Germany, the Netherlands, Italy, Switzerland and the United Kingdom. Strict environmental regulations (rigorous pollution control, ban on atomic energy) have ensured that Austria remains exceptionally clean and environmentally intact.
The major industrial areas of Austria are as follows: Upper Austria (Oberösterreich): iron, steel, chemicals, mechanical engineering, automotive engineering; Salzburg: electrical equipment & paper industry, nation-wide wholesale and freight-forwarding services, tourism; Vorarlberg: textiles, clothing; Carinthia (Kärnten): wood, paper, tourism; Styria (Steiermark): iron, steel, processing industries, automotive engineering; Tirol: tourism, glass.
II) Trade
As a predominantly industrial nation with a small domestic market, Austria is dependent to a high degree on its exports. As a result, foreign trade is oriented towards its neighbours. Austria’s most important trading partner is Germany, followed by Italy, the United States, France and Switzerland. Austria’s proximity to and its historical connections with Central and Eastern European countries account for the relatively high proportion of exports to these areas. The bilateral economic relationship between Canada and Austria is sound and there are no significant trade, technology or investment policy issues that inhibit business development. Over the last years, trade has shifted to finished and semi-finished products: machinery and auto parts now represent over 60 % of all bilateral trade.
In general, Austria runs a sizeable trade surplus with Canada. In 2006, Austria's exports to Canada reached 892 mio. €, while imports from Canada amounted to 374 mio. €. Austria's trade surplus soared to over half a billion Euro.
Even though only a limited number of Austrian companies have operations in North America, NAFTA (North American Free Trade Agreement) has improved the attraction of Canada as an investment market. Similarly, Austria's membership in the EU has bolstered its strategic position in Europe. With its skilled workforce and its experience in the emerging markets of Central and Eastern Europe, Austria is attracting Canadian businesses for strategic partnerships and investment.
All in all, there are about 30 Canadian affiliates located in Austria. The leading Canadian investor Magna International owns six production sites in Austria. Other investors include Bombardier, Agra and Northern Telecom. On the other hand, Austrian companies, among them AMAG (Austria Metal AG), Engel Maschinenbau, RHI, Doppelmayr and Frequentis, to name just a few, have set up around 80 production sites in Canada.
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