Commission Report (2002): Czech Republic

Recent developments under the Europe Agreement including bilateral trade

Trade between the EC and the Czech Republic has continued to increase. In 2001 EC exports to the Czech Republic amounted to EUR 27.3 billion (61.8% of total Czech imports) and EC imports from the Czech Republic amounted to EUR 25 billion (68.9% of Czech exports). The main categories of Community exports to the Czech Republic in 2001 were machinery and electrical goods, transport equipment and base metals. The main Czech exports to the Community were machinery and electrical goods, transport equipment, base metals and textiles.

Under the agreement resulting from the first round of trade negotiations in the agriculture sector (adopted on an autonomous basis pending the conclusion of an Additional Protocol to the Europe Agreement), approximately 96% of EC agricultural imports from the Czech Republic and 75% of EC agricultural exports to the Czech Republic are duty-free or benefit from preferential rates (average trade figures 1998 -- 2000).

Negotiations on a further round of liberalisation, covering more sensitive sectors, began at the end of 2001 and were concluded in June 2002.The resulting agreement, scheduled to take effect in January 2003, enhances the existing agricultural trade preferences between the parties and promotes the full and partial lifting of import duties either within tariff quotas or for unlimited quantities in sectors such as cereals, dairy products, beef and sheep meat. This further agreement also includes a commitment by the parties to remove export refunds for certain sectors.

In March 1996 the Council mandated the Commission to open negotiations on the reciprocal recognition, protection and control of wine names and spirits designations, including trade arrangements, with the Czech Republic. The negotiations resumed in January 2001, after an interruption in 1997 due to legal obstacles on the Czech side, and are still underway.

Negotiations are also ongoing in the field of processed agricultural products.

Procedures are underway for implementation of the protocol agreed with the Czech Republic on liberalisation of trade in fish and fisheries products.

The Government respected its commitment in January 2002 to withdraw the Decree adopted in November 1999, which had increased customs duties on imports of road tractors for semi-trailers originating in EC countries. As of January 2002, the Czech Republic removed the last import duties on industrial products originating in the EC.

The Protocol to the Europe Agreement on European Conformity Assessment (PECA) which has been in force since July 2001 has been functioning as envisaged in facilitating trade by extending recognition in the area of conformity assessment and the acceptance of industrial figures.

The Czech Republic decided to unilaterally introduce a temporary suspension of 12 tariff lines in the civil aircraft sector as of January 2001. Despite objections raised by the EU, this measure has been maintained in 2002.

One new anti-dumping investigations is underway, on imports of welded tubes and pipes (iron and non-alloy steel); provsional measures were imposed in March 2002. Definitive anti-dumping duties on imports of tube and pipe fittings (iron and steel) were imposed in August 2002. In June 2002, the Czech Republic made a request for the prolongation of the period during which public aid may be granted for restructuring purposes to the steel sector under Protocol 2 of the Europe Agreement.

In March 2002, in response to protectionist measures taken by the US, which greatly restricted access to their market and created the risk of considerable trade diversion, the EU initiated provisional safeguard measures, with erga omnes effect, on imports of certain steel products. The measures were partly confirmed in September 2002.

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