Denmark Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Trade with EU countries (excluding Great Britain) is of fundamental importance for Danish foreign trade, as EU countries account for approximately two-thirds of Danish exports and imports in the long term. Denmark’s biggest trade partners logically include neighboring Germany, with which Denmark is the only country with a land border, and Sweden. Within Europe (outside the EU), Norway and Great Britain are among the most important trading partners. In relation to the rest of the EU, Denmark has maintained a positive balance for a long time, mainly due to the high volume of exports in the field of agricultural commodities, food production, pharmaceuticals, plastics and consumer goods.

  • Allcountrylist: Overview of major industries in Denmark, including mining, construction, transportation, tourism, and foreign trade.
2017 2018 2019 2020 2021
Imports from the EU (million EUR) 48,563.3 50,429.3 52,210.8 49 114.7 ON
Export to the EU (million EUR) 54 122.10 57,677.90 58,304.60 58,983.90 ON
Balance with the EU (million EUR) 5,468.9 7,248.6 6,093.9 9,869.2 ON

Source: European Commission

Trade relations with the Czech Republic

The Czech Republic has a long-term active trade balance with Denmark, with the amount of the balance corresponding to roughly a third of Danish exports to the Czech Republic. Denmark is the 19th most important partner for the Czech Republic in relation to exports and the 25th in relation to imports. A large part of mutual trade consists of re-exports, e.g. in medicines and pharmaceutical products and in toys (LEGO). In addition to pharmaceuticals and pharmacological products, the core of Czech exports to Denmark is road motor vehicles and office machines for automatic data processing. Denmark’s exports to the Czech Republic consist of agricultural products, food products, chemical products and mechanical and electronic equipment in addition to medicines and pharmaceuticals and toys.

2017 2018 2019 2020 2021
Import from the Czech Republic (billion CZK) 21.1 40.2 46 48.1 ON
Export to the Czech Republic (billion CZK) 41 25.9 27.4 28.8 ON
Balance with the Czech Republic (billion CZK) 20 -14.4 -18.7 -19.3 ON

Source: CZSO

Trade relations with countries outside the EU

Denmark’s export-oriented economy maintains a positive trade balance in relation to non-EU countries for a long time, reaching roughly 2/5 of Danish exports. The reason is primarily the focus of exports on goods with a high added value.

2017 2018 2019 2020 2021
Export to countries outside the EU (million EUR) 38,570.2 42,484.00 47,046.20 45,900.40 50,114.90
Import from non-EU countries (million EUR) 24,890.5 29,536.4 24,846.7 23,942.1 ON
Balance with non-EU countries (million EUR) 13,679.7 13,287.9 17 105.6 18,981.2 ON

Source: EIU, Eurostat

Foreign direct investment

At the turn of the millennium, Denmark was still at the head of European destinations for foreign direct investment, which grew by 21% year-on-year. This trend is already in the past, Denmark is paying for the declining global interest in FDI in EU countries, the stagnation after the global financial crisis and the slowdown of the world economy as a result of the corona crisis. Currently, less foreign investment flows to Denmark than to other EU member states of comparable size or to the Nordic countries. Their volume is nevertheless not negligible, foreign-owned companies employ approximately 320,000 people, which corresponds to 21% of all jobs in the Danish private sector. The vast majority of foreign direct investments are realized in the form of “green field” investments (87%), the rest mainly through mergers and acquisitions, focused primarily on successful start-ups.

Czech companies are practically not present in Denmark in the field of foreign direct investment.

FTAs and treaties

Treaties with the EU

Denmark is a member country of the European Union with exceptions in the areas of EU citizenship, common currency, defence, justice and home affairs (Edinburgh Agreement, Danish Protocol to the Treaty of Lisbon).

Contracts with the Czech Republic

By letter of the Minister of Foreign Affairs of the Czech Republic dated 21 March 1994, or the Danish side’s reply of 5/2/1994 confirmed the succession to fifteen bilateral treaties and agreements. The following contractual documents are currently in force:

  • Temporary regulation of trade relations between the Czechoslovak Republic and the Kingdom of Denmark (exchange of notes, Prague 18.4.1925)
  • Arbitration Agreement between Czechoslovakia and Denmark (Prague 30.11.1926) l Agreement between the Czechoslovak Republic and the Kingdom of Denmark on the extension of the most-favoured-nation clause to Greenland (exchange of notes, Copenhagen 26.8.1929)
  • Agreement on cultural and artistic relations between the Czechoslovak Republic and the Kingdom of Denmark (Copenhagen, 12 May 1937)
  • Agreement between Czechoslovakia and the Kingdom of Denmark on the settlement of certain claims (Prague, 23/12/1958)
  • Agreement between the Government of the Czechoslovakia and the Government of the Kingdom of Denmark on International Road Transport (Prague 21.1.1969)
  • Agreement between the Czechoslovak Republic and the Kingdom of Denmark on economic, industrial and technical cooperation (Copenhagen 9 November 1970)
  • Agreement between the Government of the Czechoslovak Republic and the Government of the Kingdom of Denmark on the avoidance of double taxation in the field of income and property taxes (Prague 5/5/1982)
  • Long-term program for the development of economic, industrial and technical cooperation between the Czechoslovak Republic and the Kingdom of Denmark (Copenhagen 16.10.1984)
  • Agreement between the government of Czechoslovakia and the government of Denmark on the abolition of the visa requirement (exchange of notes, Copenhagen 5 June 1990)
  • Agreement on cooperation in the field of energy (Prague 19.2.1991)
  • Agreement on cooperation in the field of the environment (Dobříš 23.6.1991)
  • Protocol to the Treaty between the Government of the Czechoslovak Republic and the Government of the Kingdom of Denmark on the Prevention of Double Taxation in the Field of Income and Property Taxes (Prague 11 September 1992) – note Greenland and the Faroe Islands are not a party to the treaty!
  • Agreement on air transport between the government of the Czech Republic and the government of the Kingdom of Denmark (Stockholm, 4 June 1998)

Developmental cooperation

Denmark is one of the largest providers of development aid in the world. The main goal of Danish development aid is to reduce poverty in developing countries. It means the support of economic growth, as well as the development of education and health services, improvement of hygienic conditions. Emphasis is also placed on assessing the impact on the environment, the position of women in society and the strengthening of democracy and human rights. Africa is a priority continent in terms of Danish development cooperation. The coordinator of development cooperation and assistance is the DANIDA agency, which belongs to the structure of the Ministry of Foreign Affairs.

Denmark is one of the five OECD countries that is the only one that meets the UN requirement to provide development aid above the level of 0.7% of GNI. Although the percentage of Danish development aid is decreasing (0.72 GNI in 2018, 0.71 in 2019 and 0.70 in 2020), the absolute value of aid increases as Denmark’s gross national income increases.

Prospective fields of study (MOP)

Denmark intends to use the coronavirus crisis and the associated restart of the economy to accelerate the country’s transition to a sustainable “green” economy. Among the strategic and at the same time prospective branches with export potential for Czech companies, the energy sector (renewable energy sources, energy storage capacities) and the automotive industry (electric cars, electric buses) can continue to be ranked. In relation to the health care system, the Danish government already adopted a decision in 2020 to streamline the system of domestic strategic production of protective equipment, initiate the creation of their strategic stocks and thus reduce dependence on supplies from third countries. In this regard, the segment of protective equipment as finished products, as well as innovative technologies and materials for their production, appear to be promising areas for Czech exports.

Transport industry and infrastructure

The massive development of electromobility in Denmark is closely linked to the growing need to build a properly dimensioned network of charging stations. This applies to both fast-charging stations on highways and stations with lower charging speeds in parking lots. Above all, in cities, there is room for creative solutions that adapt the existing infrastructure to a new function (charging from public lighting poles, etc.).

Energy industry

With the ongoing transition of the Danish energy sector from fossil to renewable energy sources comes the need for energy storage solutions. This results from the high share of wind energy, where stable production cannot be guaranteed due to the weather, and with the steeply increasing share of renewable sources, it will become more and more urgent. Denmark will demand not only storage, but also technologies enabling the use of current energy surpluses to produce other clean sources (hydrogen).

Agricultural and food industry

As a country with a significant share of agricultural and food production, Denmark is dealing with the issue of reducing greenhouse gas emissions in this sector. At the same time, it is looking for ways to effectively capture, store and potentially use methane and other greenhouse gases to produce biofuels, recyclable plastics or agricultural fertilizers. There is still a demand for systems that enable fuel savings in agricultural machinery and efficient application of fertilizers (machines with satellite navigation, drones).

Healthcare and pharmaceutical industry

One of the lessons learned from the coronavirus pandemic is the critical dependence on third countries for vaccine production. Denmark is seriously considering building such production capacities (in collaboration with Israel and Austria), creating a significant potential opportunity for manufacturers of individual vaccine components. A similar opportunity also exists in relation to protective equipment and devices.

Defense industry

In connection with the deteriorating security environment in Europe and its neighborhood and the increasing geopolitical importance of the Arctic, Denmark will strengthen its defense capabilities in this region. The Ministry of Defense plans to acquire radar equipment in the Faroe Islands to cover the area between Norway and Iceland. In addition, the ministry is considering the acquisition of unmanned aerial vehicles for deployment in Greenland.

Denmark Trade