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Question 9: Trade policy of Central European countries (Czech Republic, Slovakia, Poland, Hungary, Romania, Bulgaria, Baltic states) integration, interests, strategies, export promotion rules, tools and institutions, export opportunities CZECH REPUBLIC Integration The Czech Republic has been a WTO member since 1 January 1995. As of 1 May 2004 it is a member State of the European Union. All EU member States are WTO members, as is the EU (until 30 November 2009 known officially in the WTO as the European Communities for legal reasons) in its own right. Is a small but very opened and export-oriented economy. Since the EU entry, the Czech republic has a considerable trade expansion with a trade surplus since 2005. Last years there is an increase trade deficit with Russia, China and other Asian countries. The vision of Czech republic for the period 2006-2010 is to establish and drive CZ in the world via trade and investment through: Active and keen trade policy Better services for the exporters Increase of export capacity Key markets (territorial priorities of the Czech republic) Structural funds, soft loans, bileteral development cooperation Image of the CZ abroad, country-of-origin effect The export strategy defines 12 key projects that correspond to 4 goals: I. More opportunities for entrepreneurs Facilitation of the trade conditions - liberalization of trade in goods and services and elimination of trade barriers - protection of unfair trade and profit or making full use of the advantages from internal market. Important is also lobbying for companies interest abroad. These can be considered as the interests of the CZ within EU CCP. Activities in key markets (target countries): countries of particular interest (EU Member States) and territorial priorities (third countries). There is a difference between priority countries and countries of special importance: the countries having considerable potential for the increase of trade co-operation are regarded as priority ones1. The territories where there is currently already an intense commercial and economic co-operation under way, however, the potential for its extension is not as high as in the case of priority countries, are regarded as countries of special importance. For priority countries territorial strategies will be developed For China and India specific strategies have been already drawn up with a view to taking advantage of the opportunities and increasing activities of Czech entrepreneurs in both countries.
Following countries have been selected as priority countries: Argentina, Brazil, Bulgaria, China, Egypt, Chile, Croatia, India, Canada, Mexico, Romani, Russia, Saudi Arabia, the United Arab Emirates, Serbia and Montenegro, Turkey, the Ukraine, the USA and Vietnam.
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SLOVAKIA:
Slovakia has been a member state of the European Union and NATO since 2004. As a member of the United Nations (since 1993), Slovakia was, on October 10, 2005, elected to a two-year term on the UN Security Council from 2006 to 2007. Slovakia is also a member of WTO, OECD, OSCE, and other international organizations. It very opened economy with moderate investment inflow and stock. Actually Slovakia has poor outward investment performance and trade deficit remains even after EU entry. It has a high dependency on EU exports it absorbs 87% of EU exports Goal 1: better export opportunities
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Commercial Interest Reference Rate - is the reference rate laid down by the OECD for its member states as the minimum interest rate for officially supported financing of exports
Export Import Bank of the Slovak Republic - the main types of insurance it offers: Ins. Of short-term and long-term export supplier credit against political & commercial risks Ins. Of export buyers credit against political and commercial risks Ins. Of manufacturing risk Ins. Of investments of Slovak legal entities abroad Ins. Of a confirmed export irrevocable documentary letter of credit Ins. Of export guarantees Main types of financing services that offers Export-Import bank of the Slovak Republic Guarantees payment, nonpayment guarantees Refinancing sellers and buyers credits loan Credits based on letter of credit Factoring and forfeiting Slovak agency for Tourism (SACR) main responsibilities Organizes trade fair and workshops about tourism abroad Carries out market researches Provides consultancy Promotes Slovak Republic as a tourist destination through mass media Foreign offices in 6 countries CZ, PL, HU, NL, AT and RU The Slovak Investment and trade development agency (SARIO) It is an allowance organization of Ministry of economy It provides information from abroad markets and search for export opportunities from Slovak firms
EU structural funds in SK These are the main tool of aid to businesses (to also those business who export) EU budget is 11,6 billions EUR (cca 83%) and state budget co-financing They have the same or similar supported activities as in Czech Republic: transport, environment protection, support for participation in trade fairs abroad, overall business environment, energy efficiency, equipment, innovation, HR, R&D, ICT The maximum intensity of state aid: Bratislava region (0% since 1 January 2009), West Slovakia 40%, Central and Eastern Slovakia 50%. POLAND Basic information GDP per capita 56 % of EU 27 Export 2008: 175,3 bln USD Import 2008: 199,0 bln USD Share of trade in GDP (2007): 42,2 % FDI inflow: 161,4 bln USD FDI outflow: 21,8 bln USD Trade deficit (even after EU accession) High importance of agriculture products in export and economy EU absorb 79 % of export Dependency on oil and gas imports (Russia high trade deficit) Integration Member of WTO since 1st July 1995 Member of EU since 1st May 2004 Export strategy No official export strategy Not supervised by government Export promotion rules (Tools, institution) Promotion agencies Polish information and Foreign Investment agency Export and investment promotion Encouraging foreign firm to invest assistance (preparing investment project) Investment offers Database with Greenfield and brown field investment location Promoting Poland as attractive business partner Creating positive image of country Seminars, conferences, international exhibition Presentation of Polands achievements in technology, science
Polish National Tourist Organization Organizing trade fairs and workshops Carries out marketing researches Consultancy Promotes Polish culture Taking care about database of cultural events Promotes tourist destination Financing and insuring institution Export credit insurance corporation (KUKE) state own company Insuring: territorial and commercial non marketable Type of insurance: Insurance of short term credits (up to 2 years due date), leasing insurance Insurance of suppliers credit and buyers credit Insurance of pre-export financing Guarantees for banks confirming letters Contract bonds Insurance of market research costs Insurance of Polish direct investments (abroad) Guarantee department within Ministry of finance Export credits (OECD consensus) Tied-aid credits favorable conditions than 2 parts gift and repayable part List of eligible countries according GNI per capita Credits for investments that should are aimed for environmental or health protection, work safety, education or improvement of living condition not for project commercially viable Investment incentives From September 2008 For technologically advanced investments, creating jobs with high productivity Based on bilateral agreement between investor and Ministry of Economy Investment grant (1 -10 % of investment) Investment has to be in one of 14 special economic zone SEZ (Lodz, Krakow, Sopot, Katowice) shareholders of SEZ are usually: Treasury, City, Universities. Condition: Minimum employees (35-500), minimum investment (100 000 EUR), Permission from SEZ, minimal 25 % of entrepreneurs own share, at least 5 years live (workplaces) (in case of SME 3 years), annual admin fee to SEZ Forms: corporate tax exemption, free assistance in dealing with formalities, exemption for property tax Sectors: R&D, biotechnology, automotive, aviation, electronic. Export opportunities
ROMANIA - www.traderom.ro Basic information GDP per head in PPP in 2006(comparing to EU27) = 39 % Export in billions USD 49,4 bil. USD Import in billions USD 76,2 bil. USD Share of trade in GDP 24,3 % FDI inward stock (2008) 72,6 bil. USD FDI outward stock (2008) 0,9 bil. USD
BULGARIA www.sme.goverment.bg Basic information GDP per head in PPP in 2006(comparing to EU27) = 37% Export in billions USD 22,7 bil. USD Import in billions USD 35,6 bil. USD Share of trade in GDP 46,6 % FDI inward stock (2008) 42,9 bil. USD FDI outward stock (2008) 1,3 bil. USD Growing trade deficit only rare bilateral surpluses (Belgium, Malta), fast growing deficit with China. Integration Member of WTO 1st December 1996 Member of EU from 1st January 2007 Strategies Vision 2013 export policy for years 2008 2013 3 groups of measures 1. Selective support for perspective and export-oriented branches 2. Improvement of business climate 3. Export promotion tools they should expand import of machines for factories (for while) support of future export Export promotion rules Supervising institution Ministry of Economy and Energy Promotion agencies The Bulgarian Small and Medium Enterprises Promotion Agency Providing information and consulting services Participate on fair trades and exhibitions Transfer of experience Invest Bulgaria Attracting foreign investors Promoting Bulgarian culture and heritage Bulgarian State Agency for Tourism Promoting Bulgaria like tourist destination Financing and insuring institution Bulgarian Development Bank Export credits, loans for foreign investors Aim of loans is to import raw materials and produce goods for export Bulgarian Export Insurance Agency
Investment incentives Tax exception for 5 years just in disfavored regions, emloyees are 80 % residents, production sectors Free trade zones 6 - Convenient currency exchange - Possibilities to transfer profit overseas without restriction Export opportunities EU members (62 % of export): Italy, Germany, Belgium, Romania Others: Turkey (11,4 %), Serbia, Russia BALTIC COUNTRIES: LITHUAINA: Basic information GDP per head 56 % of EU Export in year 2008: 23,7 bln USD Import in year 2008: 29,3 bln USD Share of trade in GDP: 46,1 % FDI inward (2008): 12,9 bln USD FDI outward (2008): 1,7 bln USD Export strategy Approved in November 2009. Strategy for years 2009 -2013 Very large scope of territorial priorities Scandinavia, Baltic states, Germany, UK, France, Poland, Benelux, Russia, Arab states, Balkan, Italy, USA, China, India, Latin America Investment incentives Free zones more than 1 mil. EUR invest. -> corporate tax exemption for 6 year Job creation grants, requalification grants R&D tax credits and tax relief for fixed assets Tools and institutions Promotion agency Lithuanian Development agency Trade and investment promotion Tourist promotion Lithuanian Tourism Development Agency Tourism marketing activities development Promotion of tourism co-operation and standardization Organization of Lithuanian group stand at international tourism fairs Financing - INVEGA (Investment and Business Guarantees) Credit and guarantees for SMEs