Patryk Toporowski 1
4. Geographic distribution of export
The share of European countries in Polish export was rising far before Poland’s EU membership, in the nineties, while during the first years of the EU membership the increase was moderated (Toporowski 2017).
During the financial crisis, Europe (with the prevalence of EU’s market), notably Germany, remained the main recipient of Polish goods (see Figure 3). Yet due to the aggravating financial and economic crisis in the euro area the share of Europe in the total Polish export dropped to 82.6% in 2013. Later this share started to pick up slightly, as a consequence of the gradual improvement of the economic situation in the Euro area. One continent clearly became a more important market for Polish products during the crisis: North America (from 2.1% share in 2008 to 3.4% in 2017). This is the effect of the improvement of economic situation of the U.S.
consumers. Africa, though being a small market, also became an increasingly important destination: while in 2008 only 0.9% of exports were directed to Africa, in 2013 (when the “Go Africa” program was launched) this share amounted to 1.3%, and in 2017 it was already 1.4%.
Asia’s share remained stable during the crisis, however within the continent there was a substantial geographical shift in Polish exports. Poland’s foreign sales to Russia dropped from 5.3% in 2013 to 2.9% in 2015, and then slightly increased to 3.1% in 2017, due to sanctions against Russia. Other Asian markets gained much more importance having a 4.7% share in 2008 to 6.4% in 2014, but then it decreased to 5.7% in 2017.
When considering the most “prospective” markets mentioned in the strategies, there was a change in the list resulting from the new economic and geopolitical conditions. Countries such as Turkey, Kazakhstan or Brazil were erased from the list, while new countries appeared, resulting in the following: Algeria, India, Iran, Mexico and Viet Nam plus the markets being included in the programs (with some of them being already defined by the government as the prospective markets): Go China, Go India, Go Iran, Go Africa, Go ASEAN and Go Arctic.
Figure 3. Geographic composition of Polish exports, by continents and selected countries, 2008-2017
Source: UN Comtrade database (via WITS), accessed 08.07.2018
In overall, the share of the priority (“prospective”) markets was rising since the new government was founded in 2015, similarly as from 2008 (see: Table 1). Among the ones with growing share of export is China – the third biggest destination – (from 0.76% in 2008 via 0.99% in 2011 – when the Go China program was launched – to 1.04% in 2017) and there are good prospects to accelerate growth in the share of exports. Both countries perceive each other as an attractive business partner in trade and investment. In 2016 these relations were even strengthened by an official visit of the President of China, Xi Jinping in Poland to make a new partnership and encourage Polish and Chinese firms to do business together (Ministry of Foreign Affairs of the People’s Republic of China 2016).
Regarding India, its share in Polish exports has risen from 0.18% in 2008 to 0.24% in 2013, and then it dropped. In 2015, when the Go India program was launched its share amounted to 0.24%. Since then, the share in Poland’s export to India increased to 0.33% in 2017, which may be an effect of the Go India program. Also, Mexico’s share considerably and steadily increased, from 0.15% in 2008 to 0.34% in 2015. Yet, a drop occurred in 2016, while in 2017 this share grew again to 0.31%. A similar growing pattern occurred in the case of the export to Vietnam.
Yet, some of the priority markets did not attract the Polish exporters, although it had been expected by the authorities. The reasons for it are twofold. First, some of them were not attractive due to a growing economic or political uncertainty. Second, the authorities’ activities towards supporting export to the priority market were either insufficient, imperfectly targeted or late. The implementation of the strategy, regarding the particular markets, was impeded either by lack of capital or by lack of adequate human resources to use them i.e. in trade offices.
On top of that, the firms are reluctant to use government-based services.
80%
82%
84%
86%
88%
90%
92%
94%
96%
98%
100%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Europe Asia (excl Russia) South America North America Africa Australia and Oceania Russia
Though Algeria was classified as a priority market, its share in Poland’s export did not correspond to the promotion strategy. The Algerian market share fluctuated around 0.16-0.17% of Polish export during the crisis (except for 0.32% in 2014). Similarly, the Iranian market share did not increase significantly since the financial crisis. However, since 2015 it grew from 0.03% to 0.06% in 2017.
Table 1. Poland’s export to the prospective markets plus China, share in %, 2008-2017
PROSPECTIVE MARKETS 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
ALGERIA 0.15 0.16 0.15 0.19 0.18 0.17 0.32 0.17 0.15 0.16
CHINA 0.76 1.09 1.04 0.99 0.97 1.04 1.05 1.04 0.97 1.04
INDIA 0.18 0.25 0.21 0.28 0.37 0.24 0.26 0.24 0.34 0.33
IRAN 0.07 0.11 0.08 0.05 0.03 0.02 0.02 0.03 0.05 0.06
MEXICO 0.15 0.12 0.17 0.23 0.32 0.26 0.23 0.34 0.27 0.31
VIETNAM 0.07 0.08 0.07 0.07 0.09 0.07 0.08 0.12 0.12 0.13
TOTAL PROSPECTIVE MARKETS 1.38 1.81 1.71 1.80 1.96 1.80 1.96 1.92 1.90 2.03
Source: UN Comtrade database (via WITS), accessed 08.07.2018
Though, since 2008 the share of countries within the Go ASEAN program was generally rising (see Table 2), later, since the new government has been elected in 2015, the share started falling. While the share of exports has risen in the case of most of these countries during the entire research period, since 2015 Poland’s exports grew only to Thailand’s, Brunei’s and Cambodia’s markets.
Table 2. Poland’s export to the Go ASEAN countries, share in %, 2008-2017
GO ASEAN 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
BRUNEI 0.000 0.001 0.000 0.000 0.000 0.003 0.000 0.000 0.001 0.001
CAMBODIA 0.000 0.005 0.005 0.003 0.002 0.001 0.002 0.005 0.004 0.013
INDONESIA 0.03 0.06 0.04 0.06 0.07 0.07 0.07 0.05 0.06 0.05
LAOS 0.002 0.001 0.000 0.001 0.000 0.000 0.000 0.000 0.001 0.002
MALAYSIA 0.11 0.14 0.13 0.09 0.11 0.15 0.09 0.09 0.08 0.06
MYANMAR 0.000 0.000 0.001 0.001 0.001 0.002 0.010 0.015 0.018 0.004
PHILIPPINES 0.01 0.01 0.01 0.02 0.03 0.03 0.05 0.03 0.03 0.03
SINGAPORE 0.08 0.12 0.27 0.31 0.27 0.36 0.39 0.45 0.32 0.11
THAILAND 0.06 0.07 0.10 0.09 0.09 0.09 0.09 0.07 0.10 0.12
GO ASEAN COUNTRIES
(INCLUDING VIET NAM)
0.37 0.49 0.63 0.65 0.66 0.78 0.78 0.83 0.73 0.52
Source: UN Comtrade database (via WITS), accessed 08.07.2018
Similarly to the GO ASEAN countries, the share of exports to states within the Go Africa program rose in 2008-2017, but since 2015 it started declining (see Table 3). The case of both groups indirectly point to the relevance of the economic condition of Poland’s main trading partner bloc - the EU, and more specifically, the Euro Area. The declining share of these two groups occurs at the same time of a gradual recovery in the EU and as this recovery progresses, these shares become smaller (see: year 2017 in Table 2 and Table 3). Among the Go Africa countries, export share to Mozambique, Senegal and Tanzania increased from 2015, while between 2008 and2015 an increase took place in most of the countries within the program.
Table 3. Poland’s export to the Go Africa countries, share in %, 2008-2017
GO AFRICA 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
NIGERIA 0.04 0.08 0.05 0.05 0.05 0.04 0.07 0.06 0.04 0.05
KENYA 0.01 0.02 0.02 0.01 0.02 0.02 0.03 0.04 0.03 0.03
ANGOLA 0.01 0.02 0.01 0.01 0.01 0.02 0.02 0.01 0.01 0.01
MOZAMBIQUE 0.02 0.01 0.01 0.01 0.00 0.01 0.00 0.01 0.02 0.02
SOUTH AFRICA
REPUBLIC 0.19 0.26 0.29 0.28 0.28 0.30 0.32 0.30 0.28 0.29
EGYPT 0.13 0.21 0.15 0.10 0.11 0.14 0.13 0.20 0.19 0.12
ETHIOPIA (EXCL.
ERITREA) 0.00 0.00 0.00 0.00 0.01 0.01 0.02 0.03 0.03 0.01
GHANA 0.01 0.02 0.02 0.02 0.02 0.02 0.01 0.02 0.02 0.02
MOROCCO 0.20 0.11 0.09 0.11 0.13 0.14 0.20 0.16 0.16 0.12
RWANDA 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00
SENEGAL 0.00 0.01 0.01 0.01 0.02 0.02 0.02 0.02 0.03 0.04
TANZANIA 0.00 0.02 0.01 0.01 0.02 0.01 0.01 0.01 0.02 0.04
COTE D'IVOIRE 0.01 0.01 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01
TOTAL GO AFRICA COUNTRIES (INCL. ALGERIA)
0.78 0.91 0.82 0.81 0.86 0.91 1.15 1.05 0.99 0.92
Source: UN Comtrade database (via WITS), accessed 08.07.2018
Some of the Go Arctic partners belong to the EU, some of them do not. Additionally, within the group there is Russia, which the EU imposed an embargo on. Because of this fact, the overall share of these countries in Poland’s export decreased since 2014 and started slightly regaining positions in 2016 (see Table 4). Still, the case of the Go Arctic partners also reflects the trend already visible in the above-mentioned other partner groups (the markets with improved economic conditions tend to gain importance in Poland’s export). All EU – Arctic countries lost shares in Poland’s export at the beginning of the crisis, and then the relative size of export started augmenting or in the case of Sweden, stabilised. Greenland, having an EU’s OCT status (Overseas Countries and Territories), represents only a negligible share in Poland’s export, yet it has increased to a particularly high level since 2015. The small share of the Faroe Islands, which is outside the EU, but a part of Denmark, has also been increasing since 2015. Yet, because of the small amount of trade, it’s difficult to assess, whether these increases
represented a new trend and whether they were influenced by the implementation of the government’s program.
Outside the EU, the share of Iceland, the U.S. and Russia in export has been increasing since 2015. Notably, the growth of the share in export to the U.S. market remains stable. The rise also occurs in spite of the failure to sign the Transatlantic Trade and Investment Partnership between the EU and the U.S., which points to the improved economic environment of this market.
Canada’s share in the Polish export, albeit small, grew sustainably during the crisis from 0.39%
in 2008 to 0.71% in 2016. In 2014, when Canada was put on the list of prospective markets its share amounted to 0.6%. The Polish government has a positive attitude towards the Comprehensive Economic and Trade Agreement negotiated between the EU and Canada. Yet, in 2017 this share has decreased to 0.59%.
Table 4. Poland’s export to the Go Arctic partners, share in %, 2008-2017
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Canada 0.39 0.47 0.59 0.42 0.52 0.49 0.60 0.64 0.71 0.59
Denmark 1.90 1.83 1.84 1.82 1.67 1.68 1.56 1.60 1.70 1.78
Faeroe Islands 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.02 0.02
Finland 0.86 0.81 0.72 0.75 0.75 0.77 0.85 0.75 0.80 0.78
Greenland 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.02
Iceland 0.08 0.03 0.02 0.02 0.03 0.03 0.04 0.04 0.08 0.08
Norway 1.69 1.90 1.49 2.03 1.75 2.01 1.75 1.41 1.26 1.20
Sweden 3.18 2.66 2.97 2.85 2.63 2.72 2.85 2.73 2.88 2.73
Russia 5.28 3.73 4.22 4.54 5.52 5.31 4.39 2.94 2.95 3.14
United States 1.46 1.85 1.83 1.96 2.01 2.38 2.26 2.30 2.45 2.77
Total Go Arctic
partners 14.85 13.28 13.69 14.40 14.88 15.38 14.30 12.40 12.85 13.11
Source: UN Comtrade database (via WITS), accessed 08.07.2018
This data illustrate the changing economic and political environments in the priority markets and a high dependence of the Polish producers on global and regional trends. Generally, the markets with ameliorating economic conditions tend to have their share in the rise of Poland’s export. On the contrary, those markets that experienced negative economic and even more negative political developments, tend to decrease their share in exports. This suggests that even a big country like Poland (being around the 20th economy in the world) is dependent on the economic circumstances of their trading partners. And as some target groups are recovering (USA, EU), their share in Poland’s export is recovering as well at the cost of other markets, including the promoted ones.
The recovery of Europe’s share in Poland’s export, despite the government strategy, also points to little effectiveness or a significant delay of the effects of the governmental export support program, that assumed an increasing geographical export diversification. There was no
significant shift of money from the non-priority trade offices to the priority ones, which disabled them to sufficiently increase support of Polish business abroad. The other problem was the fact, that non-priority trade offices in the EU were easier to establish and to develop due to the abundance of skilled human capital, as opposed to the trade offices in the priority markets or specific “Go” markets.