From the Soviet Union to the European Union: Estonian Trade Policy, 1991–2000

This paper examines the political economy of Estonian trade policy in the 1990s. Estonia is a unique case in the world economy, in that the country rapidly implemented unilateral free trade after regaining independence and sustained it right through the 1990s. We analyse the circumstances, interests, ideas and institutions that have shaped Estonian trade policy during the past decade. Our stress is on institutions, particularly the national decision‐making setting for trade policy. Through this prism we try to understand how a free trade regime was implemented and sustained, and what this experience suggests for the feasibility of tree trade elsewhere. We also look at the increasingly ‘multi‐track’ nature of Estonian trade policy through bilateral free trade agreements, WTO accession and, especially, the movement towards EU accession. Although the other trade policy tracks to some extent provide a lockin for unilateral reforms, we argue that EU accession is undermining the simple, classical liberal trade policy regime that existed during the 1990s.