Andorra’s largest industrial branch is cigarette and cigar manufacturing. Most of the tobacco products are sold cheaply, thanks to low taxes, to visitors in the country.
Andorra also manufactures textiles and leather goods, many of which are handicraft products for the tourism industry. They also produce wood products and finished foods made from imported raw materials.
Andorra’s foreign trade is dominated by imports of consumer goods, including expensive capital goods, which are sold cheaply to tourists thanks to low taxes.
The customs union between Andorra and the EU since 1991 means duty free for goods outside the agricultural sector. For several agricultural products there are agreements on limited, duty-free quotas. The country’s largest trading partners are Spain and France.
Since 1997, the country has been the so-called observer in the World Trade Organization WTO.
FACTS – FOREIGN TRADE
1 million US dollars
Commodity trade’s share of GDP
49 percent (2014)
Largest trading partner
Andorra’s mountainous geography limits the possibility of good communications. The main route runs between France and Spain, through the capital Andorra la Vella and the major valleys. Another road goes along the valley from the capital to the northwest. Several road tunnels exist, including a three kilometer long tunnel between Andorra and France. In 2012, a road tunnel was opened between Anyós and Encamp, linking the two most important valleys in the country, the north and the east, and reducing travel time from half an hour – three quarters to five minutes.
There are no railways. Andorra lacks its own airport but uses the international airport in Spanish La Seu d’Urgell. It is located one mile from the border with Andorra and was inaugurated in 2010 following a renovation that was jointly funded by Andorra, Spain and Catalonia. The airport had then been closed for commercial traffic since 1984. Only in January 2015 was it fully opened for commercial traffic, in June also for charter flights.
Tourism is the foremost industry and accounts for a significant portion of Andorra’s gross domestic product (GDP). Andorra attracts many day visitors on shopping trips from France and Spain, but is also an important winter sports center.
In 2014, the country received just over seven million tourists. Most come from Spain and France and only make short visits to trade duty free goods. More than two million stayed over at least one night.
Andorra has several ski resorts and is primarily a major winter sports center, but the mountains also attract summer tourists.
However, tourist flows declined steadily during the first decade of the 21st century, which was partly due to increased competition from cheaper ski resorts in Central Europe. From 2008 onwards, the international financial crisis also impacted, and even more so, the subsequent economic crisis in Spain. Andorra, however, has chosen to try to step out of the crisis and has increased investment in the tourism sector. The country has installed modern lifts and snow cannons. Andorra has also begun to market itself as a venue for international conferences.
FACTS – TOURISM
Number of foreign visitors per year
2 831 000 (2016)