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19 October 2001
Czech Republic: October 2001

The Trade Policy Review Body of the World Trade Organization (WTO) concluded its second review of the Czech Republic on 17 and 19 October 2001. The text of the Chairperson's concluding remarks is attached as a summary of the salient points which emerged during the discussion.

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Summary of Secretariat report
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The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.

The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including its domestic laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairperson's summing-up together with these two reports will be published in due course at the complete trade policy review of the Czech Republic and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992 and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992, 1996 and 2000), Brunei Darussalam (2001), Burkina Faso (1998), Cameroon (1995 and 2001), Canada (1990, 1992, 1994, 1996, 1998 and 2000), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995 and 2001), Côte d’Ivoire (1995), Cyprus (1997), the Czech Republic (1996 and 2001), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2000), Fiji (1997), Finland (1992), Gabon (2001), Ghana (1992 and 2001), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995,1998 and 2000), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho (1998), Macao (1994 and 2001), Madagascar (2001), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), Mozambique (2001), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), OECS (2001), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993 and 1999), Poland (1993 and 2000), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka (1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991, 1996 and 2000 (jointly with Liechtenstein)), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996, 1999 and 2001), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).


This Review, the second of the Czech Republic's trade policies and practices, has been a real success. Through an open and informative discussion with the Czech delegation, we have all been able to get a better understanding of the trade and trade-related policies and practices in place, and a fuller appreciation of their impact on the multilateral trading system. We have had a very productive dialogue on recent economic reform in the Czech Republic, and the role that trade liberalization played in them. The Czech economy was viewed by most Members as now being a functioning market economy. Members were able to obtain useful information about recent and planned changes in trade measures, in particular with regard to the ongoing negotiations for accession to the European Union.

Members congratulated the Czech Government for its continued support of, and active rôle in, the WTO. The Czech Republic has undertaken important commitments in the multilateral system, and has expanded on them since the previous Review of its trade policies in 1996. Members appreciated the Czech Republic's overall commitment to liberal trade and investment policies. Many Members also welcomed the Czech support for launching an expanded negotiating agenda at the 4th Ministerial Conference.

All delegations welcomed the Czech economic recovery, assisted by structural change encompassing domestic reform and trade and investment liberalization. Some Members noted that the fiscal situation was fragile and that a further deterioration could pose a threat to macroeconomic stability. Members appreciated the efforts made by the Czech Republic in adapting its institutional and economic environment to the requirements of a modern market-oriented economy. Members acknowledged the impressive results of the Czech transition process, including the ongoing privatization of state-owned enterprises, which has played a significant rôle in attracting foreign investment. Members noted the importance that the authorities placed on investment promotion, and on related plans to move forward on restructuring and privatization.

Many Members noted that preparations for EU accession provided a strong anchor to the reform process. In this sense, they commented favourably on the Czech's priority target of accession to the EU which would create the opportunity for further reform as the Czech Republic increasingly harmonized its policies with EU requirements. Some Members raised concern as to the real impact on trade opportunities for non-EU countries, in particular for agricultural goods, resulting from accession. The relatively large number of preferential trade agreements to which the Czech Republic is party was noted as was the fact that this resulted in a small share of its trade being conducted on an MFN basis. Members appreciated the close Czech economic and trade relations with the Slovak Republic, while recognizing that this did not imply common external positions in all areas. Members also took note of the Czech determination that its regional trade objectives be consistent with its participation in, and ambitions for, the multilateral trading system.

Members appreciated that the Czech tariff regime was transparent and predictable, and that average rates were relatively low. Nevertheless, some Members noted that Czech preferential rates were well below MFN levels. Members invited the Czech Republic to reduce the gap between preferential and MFN tariffs. They also commented on the wide tariff disparities, including tariff peaks, tariff escalation, and the use of concessions and exemptions. The advantages of simplifying the tariff structure by reducing the high number of different MFN and preferential rates was highlighted. Members welcomed the fact that only relatively few non-tariff barriers existed.

On sectoral policies, Members focused mainly on agriculture and services. Some noted that the average tariff on agriculture was relatively high compared with that on non-agricultural goods. Clarification was sought on the existing system of assistance to the agriculture sector. A number of Members asked about the envisaged evolution of agricultural policies, in particular given the prospects for accession to the EU. Members welcomed the fact that competition in the banking sector had increased in recent years, and referred to measures to improve the efficiency of the banking sector. They sought information on plans for further privatization in the telecommunication sector.

Members also sought additional details in a number of specific areas, including:

  • customs procedures;

  • non-automatic import licensing;

  • technical regulations and standards, and conformity testing procedures;

  • contingency measures;

  • government procurement;

  • export policy and assistance;

  • free trade zones;

  • protection of intellectual property rights, and enforcement;

  • investment regime and incentives;

  • the overall system of state aid, including specific aid to economically-depressed regions;

  • public enterprise restructuring and further privatization plans;

  • bankruptcy legislation and practice;

  • commercial courts system, and transparency of the legal framework; and

  • technical assistance experience in the context of transition economies.

The Czech delegation gave written and oral replies to questions posed, and undertook to send more detailed replies to some of them. The replies helped clarify and bring a better understanding of the Czech trade and trade policy measures currently in force.

In conclusion, I think we can all congratulate the Czech Republic for its continuing efforts to liberalize its economy and its further integration into the multilateral system, something which is already well underway. Members were very appreciative of the Czech Republic's successful economic transformation, and for the success in overcoming the 1997-99 recession. Current policies have resulted in a transparent, predictable, and open trade regime, which has proven to be an important factor behind the increase in trade and investment, and has sustained GDP growth. Members encouraged the Czech Republic to continue down this path. Members also encouraged the Czech Republic to preserve its active interest in the multilateral trading system and to consolidate in the multilateral framework its regional liberalization measures. This would benefit not only the Czech long-term economic interest but also the overall multilateral trading system. The Czech Republic, being a relatively small country dependent on export markets, has much to gain from a full participation in the multilateral trading system.