RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/89
19 September 2001
(01-4264)
Trade Policy Review Body Original: English
TRADE POLICY REVIEW
CZECH REPUBLIC
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the policy statement by the Government of the Czech Republic is
attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on the Czech Republic.The Czech Republic WT/TPR/G/89
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CONTENTS
Page
I. INTRODUCTION 5
II. ECONOMIC ENVIRONMENT 5III. TRADE POLICY DEVELOPMENTS 1996-2000 7
(1) T
HE WTO A GREEMENTS 7
(i) Trade in goods 7(ii) Changes in the Legal Framework 9(iii) Trade in services 9(iv) Trade-Related Aspects of Intellectual Property Rights 10
(2) R
EGIONAL  TRADE  AGREEMENTS 11
IV. FUTURE TRADE POLICY DIRECTIONS 12
(1) N EW WTO N EGOTIATIONS 12
(2) A CCESSION TO THE  EUROPEAN  UNION 15The Czech Republic WT/TPR/G/89
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I. INTRODUCTION
1. Since the previous trade policy review in 1996, the Czech Republic has continued its process
of economic reform with a view to establishing an effectively functioning market economy that is
capable of responding to the challenges of the globalizing world.
2. With the ongoing process of convergence to the European Union institutional changes have
been increasingly driven by the need to harmonise Czech laws with the acquis communnautaire. Thisfundamental change in the national legislation takes place not only in the economic sphere but also in
other areas of the social activities.
3. In the early period under review, the macroeconomic policy targeted certain major
imbalances. Following the successful stabilisation, the economic policy focused on recovery of the
Czech economy and its growth particularly through the active industrial, agricultural and export-oriented policies and policies promoting favourable legal and economic environment both for
domestic and foreign economic agents. The strategy also aimed at completing the privatisation of the
major banks and several industrial enterprises and at cultivation of the overall institutional
environment that is conducive to structural changes.
4. Notwithstanding economic difficulties, throughout the whole period the Czech Republic has
continued to pursue liberal policies, including thos e focused on the opening of the domestic market to
foreign competition. In this process, an important role has been played by the active involvement of
the Czech Republic in international organisations such as the International Monetary Fund, World
Bank, OECD and, in particular, the World Trade Organisation (“WTO”).
5. The Czech authorities see the WTO as an instrument of improving access to international
markets for the Czech companies. At the same ti me, the Czech membership in the WTO strengthens
the consolidation of economic results achieved in the process of transformation of the economy.Within a wider context, the Czech Republic perceives the WTO as a key international body, which
contributes to creating a stable, predictable and sustainable international economic environment.
II. ECONOMIC ENVIRONMENT
6. During the period 1996 – 2000, the performance of the Czech economy was adversely
effected by the emergence of macroeconomic imbalances, which intensified in the course of 1996. Toprevent a further deterioration of the situation, the government adopted a package of macroeconomic
measures of stabilisation and partially restrictive in nature in 1997. This package also comprised a
trade restrictive measure in the form of import deposit scheme to address the balance of payments
difficulties. The measure had no significant impact on the trade flows and was lifted after four
months, once the other measures taken in the monetary and fiscal areas became effective. The adversemacroeconomic development culminated in 1997–1998 when the process of economic reform was
slowed down, economic performance worsened and GDP stagnated and even declined.
7. The recovery of the economy and positive turnaround came in the second half of 1999 and
gathered momentum in 2000.  The change was stimulated by the new economic programme focused
on strengthening the regulatory framework of the economy, acceleration of the privatisation of thebanking sector, initiation of the so called “revitalisation programme” for the industry and increased
inflow of foreign direct investments.
8. The nominal value of GDP for the period under review (1996 – 2000) increased by 21.5%,
but the real growth did not take place until 2000, when GDP in constant prices increased by 2.9%
compared with the previous year. This positive turnaround was due, in particular, to an increase inWT/TPR/G/89 Trade Policy Review
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gross fixed capital formation, which in turn was supported by a strong growth of foreign direct
investments. Private consumption also increased significantly. Exports of goods and services
expanded in 2000, as compared with the period of 1998 - 1999. The GDP is expected to continue to
grow in 2001 and 2002, the rate of this growth being estimated at 3.5 – 3.8% a year, on average.
9. Gross fixed capital formation increased by 5.9% compared with the previous year. The
growth of labour productivity was robust, by 3.9%. The rate of inflation remained low (at the level of3.9%); despite some important inflationary pressures having mainly their origins in higher oil prices.
The rise in the unemployment rate was successfully held during 2000 and subsequently reduced to
about 8.1% in May 2001. However,  regional differences in unemployment rates have intensified and
the proportion of long-term unemployment keeps increasing. Gross foreign debt has dropped by 2.3%
following the period of its growth. The debt reac hed the level of USD 21.5 billion and approached the
reasonable level of 40% of GDP.
10. The structure of GDP has continued to change. The share of services in GDP  increased over
the period of 1996 – 2000 while that of manufacturing and agriculture fell. This growth pattern is
therefore similar to the pattern of sectoral struct ural changes in the advanced economies. The share of
services sector in GDP is currently 56.2%. The share of industrial production has stabilised at about32%, whereas the shares of agriculture and  construction  are declining at a rate of 0.2 to 0.5%
annually (in 2000, agricultural share was 3.4% and the share of construction industry accounted for
6.5%).
11. The economic reforms have resulted in large-scale structural changes. The privatisation
process was fully resumed and has now reached its final stage. The majority of industrial processing
capacities has already been privatised. Privatisation is now under way in the banking sector and also
in the energy and telecommunications sectors, and in the chemical and metallurgical industries. Theprocess of price deregulation will be completed in the near future; at present the Government only
regulates housing rents, the rates for telecommunication and postal services, and the tariffs in
passenger railway transport and the prices of electricity and gas.
12. The positive economic developments and the new economic policy measures have
encouraged foreign investors whose confidence in the Czech economy has increased substantially.
The investment incentives, introduced in 1998 also rendered the Czech Republic more attractive to
foreign investors. All those factors  have  translated  into massive upsurge  of  inward  FDI, which
started  in  the  late 1990s and continues until the present time.
13. Whereas in the period 1996 – 2000 foreign direct investments totalled USD 15.8 billion,  in
1999 alone they amounted to USD 6.2 billion and in 2000 to USD 4.5 billion. Most of foreign directinvestments came from Germany, the Netherlands,  Austria, the USA, Switzerland, Belgium and
France. The investments have flowed in particul ar to the manufacturing, banking and insurance
sectors, as well as the trade sector.
14. Total merchandise trade increased by 24.6% over the period of 1996–2000 (in USD terms);
exports increased by 33.8% and imports grew by 17.2%. The trade deficit was gradually reduced fromaround USD 5.8 billion in 1996 to USD 1.9 billion in 1999.  However, this positive downward trend
was reversed in 2000, mainly due to the growing prices of imported oil and gas, rapid growth of
imports of machinery and equipment accompanying th e inflow of foreign direct investments, and due
to depreciation of the Czech crown against USD. As a result, the trade deficit increased to
USD 3.2 billion in 2000. The deterioration in the trade balance continued in the first half of 2001.The Czech Republic WT/TPR/G/89
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15. The total exports of the Czech Republic reached the level of USD 29 billion in 2000 and total
imports USD 32.3 billion. Trade with developed market economies represents a major part of total
foreign trade. Small and medium-sized enterprises (up to 250 employees) contribute to about 38% of
total exports and to about a half of the imports.
16. Merchandise exports from the Czech Republic were primarily directed to advanced countries
and exhibited a robust growth (49.4% during the period between 1996 and 2000,.i.e by almost a half).In 2000, exports to the advanced countries accounted for about 75% of total exports. Over the same
period of 1996 - 2000, imports from these countries only increased by 17.9% to approach 72% of total
Czech imports in 2000.  The growth of trade with developing countries was uneven and relatively
slow. By  2000, this large group of countries accounted for only 4.2% of total trade of the Czech
Republic.
17. As to the commodity pattern, the most rapid growth was recorded in the category of
machinery and transport equipment, which combined, accounted for 44.5% of total exports. The same
category of goods also exhibited a strong growth of imports, currently representing 40.1% of total
imports.  Growth was also recorded in imports of oil, gas and other fuels, which presently account for
9.6%of total imports. The continuing growth of exports of high-technology products and productswith high value added can be considered to be a positive feature.
III. TRADE POLICY DEVELOPMENTS 1996-2000
18. Trade and trade policies have always played one of the key roles in the development of the
Czech economy and society as a whole. The importance of trade is reflected in the openness of the
economy, its profile and the high share of exports and imports of merchandise and services in GDP.
19. During the period since the last review, the Gove rnment has continued to liberalise its trade
policy through steps taken at multilateral and regional levels as well as through autonomous measures.The access into the Czech market has been furthe r improved following the country’s full and timely
implementation of obligations resulting from the WTO Agreements and Understandings and
respective preferential agreements.  In certain areas the Czech Republic has gone beyond what is
contained in the country’s schedule of concessions and commitments. The process of liberalisation
and deregulation has never been perceived for its own. Instead, the process has been seen by theGovernment as an effective tool to support the necessary structural changes, strengthen the
performance of the economy, improve its competitiveness and increase the standards of living.
20. The portfolio of trade policy instruments has continued to expand. All the WTO Agreements
to which the Czech Republic is a signatory have been incorporated into the domestic legal system.
This entailed not only obligations but also rights, including those enabling the Government to resort to
trade remedy measures to cope with the cases of serious injury or threat thereof to domestic industries
that occur due to unfair commercial practices at the company or government levels or because of
increased imports.
(1) T
HE WTO AGREEMENTS
(i) Trade in goods
21. The Czech Republic completed the process of tariff reductions according to the timetable
agreed in the course of the Uruguay Round of Multilateral Trade Negotiations.  In accordance with its
Schedule of Concessions and Commitments, the country continues to reduce the tariff rates on textiles
and clothing imports. The same goes for chemical and pharmaceutical products in respect of whichWT/TPR/G/89 Trade Policy Review
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the Czech Republic joined sectoral initiatives leading to harmonisation or total elimination of duty
rates.
22. The average MFN rate for all imports under the MFN treatment amounts to 4.5% in 2001
compared with 5.9% before 1995. The corresponding figure for all imports is about 1.1% and is lower
due to free trade conditions under preferential agreements.
23. The average MFN rate for imports of agricultural products has declined from 13.1% in 1994
to the current level of 9.3%. The level of import duties is one of the lowest among the WTO
Members. The average MFN tariff incidence for imports of non-agricultural products has been
reduced from 4.9% in 1994 to current level of 3.8%. Most current rates of customs duties are at zero
level or range from 0 to 5%. There are no non-agricultural tariff rates in excess of 40%. Tariff rates
ranging from 15 to 40% are levied on less than 1% of items and tariff rates higher than 20% areexceptional.
24. The simplicity and transparency of the Czech Customs Tariff are enhanced by the exclusive
use of ad valorem customs duties. The Czech Republic has bound its entire tariff schedule, which
represents an important element of predictability and stability for economic operators. No export
tariffs are applied.
25. The Czech Republic has become a signatory to the Information Technology Agreement and is
meeting its commitments to abolish import tariffs for products in question by 1 January 2002 at the
latest. It has also joined the initiative to extend the list of pharmaceutical products subject to total
elimination of tariffs.
26. According to the provisions of the Agreement on Textiles and Clothing, imports of these
goods are being gradually integrated into the rules of the General Agreement on Tariffs and Trade
1994 (hereinafter referred to as “GATT 1994”). Foll owing the third stage, the share of textiles and
clothing imports that will have been integrat ed into GATT 1994 disciplines will account for 51.57%
by January 1, 2002.
27. The commitments concerning the reduction of domestic support and export subsidies for
agricultural products have been completely met. The permitted levels of assistance as contained in the
country’s Schedule of Concessions and Commitments have not been fully reached, primarily forbudgetary reasons. The Czech Republic has also completely implemented its commitments resulting
from the Agreement on the Application of Sanitary and Phytosanitary Measures.
28. The import licensing regime, which is only applied to some products, is aimed at monitoring
trade flows and ensuring life, health and secu rity protection. Non-automatic import licensing
procedures are applied with the purpose of import restrictions and relate to a very small number ofproducts. Some export restrictions are maintained in accordance with the Agreement on Textiles and
Clothing or due to shortages of certain agricultural products in the domestic market.
29. The Czech Republic provides favourable market access to 135 developing countries under its
Generalised System of Preferences. The goods originating in and imported from 48 least-developed
countries enjoy duty-free and quota-free access to the Czech market. Simple rules of origin areapplied to goods from these countries. Depending on the sensitivity of individual items, reduced rates
of customs duties (reduction by 50% or 100%) are applied for a large number of products from other
87 developing countries and other states, with the same rules of origin as those applied to imports
from least-developed countries.The Czech Republic WT/TPR/G/89
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(ii) Changes in the Legal Framework
30. The Czech Republic has incorporated into its legislation all relevant provisions of the WTO
Agreements, including those dealing with protection of domestic industries against increased imports,
subsidised imports or dumping.
31. Act No. 152/1997 Coll., On Protection against the Import of a Dumping Product, has been in
force from July 10, 1997. The anti-dumping duty has so far been applied only once under this Act. Nonew antidumping investigation was conducted at the time of elaborating this report.
32. Act No. 62/2000 Coll ., On Some Measures in the Export or Import of Products and the
Licensing Procedures entered into force on July 1, 2000. This Act makes it possible to adopt measures
when increased imports cause or threaten to cause a serious injury to domestic industries. The final
safeguard measure was adopted in one case, on sugar imports. In the two remaining cases (sugarsubstitutes and shoes) the investigations have not yet been completed. In the case of sugar substitutes,
their imports are presently subject to the preliminar y measure in the form of an increased import duty.
33. Act No. 63/2000 Coll., On Protection against Subsidised Imports and altering Act No. 2/1969
Coll., on Establishing Ministries and Other Centra l Authorities of State Administration of the Czech
Republic, as subsequently amended, and Act No. 13/1993 Coll., the Customs Act as subsequentlyamended, has been in force since April 1, 2000. No restrictive measure has been adopted under this
Act.
34. The Schedule of Concessions and Commitments negotiated in the framework of the Uruguay
Round of Multilateral Trade Negotiations defines agricultural products and groups of agricultural
products on which a special safeguard can be applied. Following the recent legislative action by the
Government it is possible to apply a special safeguard measure based on the volume of imports.
35. Import Licensing Procedures are regulated under the Act No. 62/2000, Coll. that is fully
consistent with the appropriate provisions of  the Agreement on Import Licensing Procedures.
Following the Act 62/2000, the Government has adopted a decree, which defines a list of products
that can only be imported or exported against a license.
36. The Czech Republic has never been a part of any dispute under the provisions of the
Understanding on Rules and Procedures Governing the Settlement of Disputes.  The two cases, whichconcerned the Czech Republic, were terminated in the stage of bilateral consultations.
(iii) Trade in services
37. The services sector is an important segment of the Czech economy and its role has been
further increasing. The services share in GDP amounts to 56.2% and the sector contributes to about a
half of total employment. The Czech Republic market share in the global trade in services isapproximately 0.5%.
38. The access to the Czech market in services has been highly liberalised in accordance with the
Schedule of Specific Commitments of the Czech Republic annexed to the General Agreement on
Trade in Services (hereinafter referred to as “G ATS”). The commitments cover all important services
sectors. The access to the Czech market in the sectors inscribed in the national schedule is bound tothe extent set out therein. Two sectors of services, health, health related and social services and
recreational, cultural and sporting services have not been covered. MFN exemptions have been
applied only to audio-visual services and some transport services.WT/TPR/G/89 Trade Policy Review
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39. Several modes of supply have not been bound. This is the case of either newly set up services
or sectors in which the relevant regulations have not yet been established. The unbound status is of
precautionary nature and does not necessarily imply the existence of excessive access restrictions to
the Czech market.
40. Market access limitations concerning national treatment reflect existing commitments and
only involve few sectors, like for example the acquisition of real estate and land by foreign entities,the provision of architectural, urban, landscape planning and engineering services, some air-transport
services, legal services, some banking and investments services.
41. Upon the conclusion of the Uruguay Round the Czech Republic actively participated in the
subsequent negotiations on further liberalisation of trade in telecommunications and financial services
and attached valuable scheduled commitments in these sectors. The Czech Republic is a signatory tothe Fourth Protocol to the GATS on Basic Telecommunication Services and to the Fifth
 Protocol on
Financial Services.
42. Telecommunication services belong to the most  important sectors of the economy. The Czech
Republic has undertaken and implemented commitments covering the whole range of selected sectors
and in compliance with the pro-competitive regulatory framework attached to the national schedule.At present, there are no limitations either on market access or on national treatment in any sector of
basic telecommunication services. The Act No. 151/2000, Coll. on Telecommunications further
liberalised the provision of public telephone services. Since  January 1, 2001 all exclusive or special
rights in the area of public international, long-distance and local telephone services in the Czech
Republic have been eliminated.
43. Financial services represent another important sector. As regards the insurance services, the
monopoly rights concerning compulsory motor third party liability insurance have been eliminated.The provision of this type of service is now open to competition on a non-discriminatory basis. There
are no limitations on market access and national treatment for cross – border supply and commercial
presence other than the establishment, registration and authorisation in the Czech Republic.
44. In the case of banking and other financial services, the market access is open on a non-
discriminatory basis with the exemptions for cross-border trade and consumption abroad including theacceptance of deposits, certain securities and negotiable instruments. Deposit services, trading with
foreign currencies and non-cash operations can only be undertaken by banks established in the Czech
Republic or to branches of foreign banks, which have obtained the appropriate licence. Banks can
only be established as joint stock companies. The purchase of shares of existing banks is subject to
prior approval of the Czech National Bank. Certain services such as publicly traded securities, theestablishment and activities of securities dealers or stockbrokers are subject to prior authorisation.
45. During the period 1996 – 2000 the Czech Republic has fully implemented its legal
commitments on market access and national treatment which covered nearly all sectors of services.
(iv) Trade-Related Aspects of Intellectual Property Rights
46. The Czech Republic attaches great importance to the issue of protection and enforcement of
intellectual property rights. The domestic legislation is fully in compliance with the provisions of the
Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as
“TRIPS Agreement”). The Czech Republic has not invoked the right to delay the implementation of
the TRIPS Agreement provisions. Its comprehensive legislation was reviewed in the Council for
TRIPS in 1996 and 1997.The Czech Republic WT/TPR/G/89
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47. The authorities have recently taken further steps to improve protection of intellectual property
rights by adopting several new laws and amendments to the existing ones. The objective of these
changes was to ensure the similar level of IPR protection to that existing in the EU Member States.
This process has resulted in a higher level of protection and enhanced level of enforcement of IPR´s
above the standards of the TRIPS Agreement.
48. The enhanced level of IPRs protection based on the adopted legislative measures concerns the
following categories: copyright and related rights, patents (inclusive biotechnological inventions,
pharmaceutical inventions and new plant variety protection), industrial designs and utility models,
trademarks, topographies of integrated circuits and protection of undisclosed information. All legal
changes have been notified to the WTO.
49. The higher level of enforcement of intellectual property rights is guaranteed by the Law on
Measures Concerning Entry, Export and Re-export of Goods Infringing Certain Intellectual Property
Rights and by the amendments of the Civil Proc eedings Code, the Law on Business Licenses, the Law
on the Czech Trade Inspection, the Law on the Czech Agricultural and Food Inspection and the Law
on Consumer Protection. Proposals to enhance the level of penalties for infringement of the IPRs in
the framework of the Penal Code and the Penal Proceedings Code are currently under review. TheCzech legislation enables to apply sanctions for infringement of intellectual property rights in the
form of fines, imprisonment and seizure and destruction of pirated copyright or counterfeit trademark
goods.
50. The high level of protection and enforcement of IPRs are also ensured by non-legislative
measures issued as part of the Governmental Concept of Fight the Crime in the Area of IPRs.  In
order to co-ordinate all IPR´s-related activities of state administration, the Inter-Ministerial
Commission was established and the Co-operation Agreement among the bodies of stateadministration in the executive field was conclude d. Furthermore, an information system that links
together all governmental institutions, non-governme ntal bodies and private subjects involved in the
fight against infringement of IPRs was established. Conditions and rules for regular control of use of
exclusively legal software within the state administration have been set. Training and seminars are
organised to improve the qualification of the staff and introduce the best practices in combating IPRscrimes.
51. The Czech Republic is a party to all important international agreements in the field of
intellectual property rights. It has signed the Patent Law Treaty. It is going to accede to the WIPO
Copyright Treaty and the WIPO Performances and Phonogram Treaty.
(2) R
EGIONAL TRADE AGREEMENTS
52. Most of the Czech Republic’s regional preferential arrangements were agreed already in the
period of 1991-1996. Their purpose was to support, through regional trade co-operation, the
transformation of the economy to a free market system and to strengthen the development of trade and
economic relations with countries concerned.
53. More specifically, the objective of establishing the customs union between the Czech
Republic and the Slovak Republic was to contribute to a smooth separation of the former
Czechoslovakia and to further enhance mutual trade and economic relations that had existed. What
also played an important part was the need for maintenance of the continuity of its relations and
commitments to third countries.
54. The Europe Agreement establishing the Association between the Czech Republic, on the one
part, and the European Communities and its Member States, on the other part, is a specific type ofWT/TPR/G/89 Trade Policy Review
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arrangement.  It is more comprehensive than standard trade agreements. In addition to the provisions
aiming at the establishment of a free trade zone in accordance with Article XXIV of GATT 1994, the
Europe Agreement also includes provisions concerning payments, capital movements, liberalisation in
services, competition, approximation of laws as well as the co-operation in the areas of the economy,
cultural, finance and other.
55. The Czech Republic has also a free trade agreement with member states of the European Free
Trade Association. It also signed the Central Eu ropean Free Trade Agreement (with Poland, Hungary,
Slovakia, Slovenia, Romania and Bulgaria) as well as free trade agreements with Estonia, Latvia,
Lithuania, Israel and Turkey.
56. At present, the Czech Republic is negotiating a free trade agreement with the Republic of
Croatia. The new agreement is expected to become operational on January 1, 2002. As part of theprocess of accession to the European Union, the government is considering the possibilities of
concluding other preferential agreements based on Article XXIV of GATT 1994  with the countries
having similar arrangements with the European Union.
57. The transition periods agreed for gradual implementation of the provisions of the regional
agreements have expired and the agreements are now  fully operational. Trade in industrial goods has
been fully liberalised. The only exception is the export of some industrial goods to Poland, where the
remaining restrictions will be eliminated by Ja nuary 1, 2002. Trade in agricultural commodities is
fully liberalised within the customs union with Slovakia; a partial or total liberalisation of mutual
trade has also been achieved with other partners. The highest level of liberalisation of trade in
agricultural commodities has been achieved with th e Contracting Parties to the Central European Free
Trade Agreement.
58. All the preferential agreements implemented by the Czech Republic are of regional character
within the meaning of Article XXIV. The implementation of these agreements confirms the objective
of not only maintaining but also gradually deve loping mutual trade. The mutual trade volumes
reached the multiples of the previous levels. Trade with the preferential partners has been growing to
attain the level of more than 80% of total trade of the Czech Republic.
59. The Czech government is committed to the stab ilisation and enhancement of the multilateral
trading system, including to the negotiations on the rules by which the system is governed. The
implementation of the regional trade agreements, wh ich are in conformity with the WTO rules, has
demonstrated that such agreements are effective and  complementary instruments to the multilateral
trading system.
IV. FUTURE TRADE POLICY DIRECTIONS
(1) N
EW WTO N EGOTIATIONS
60. The turn of the millennium is characterised by a rapid development of the world economy, its
globalisation and changing conditions of international trade. All of these factors lead to great
pressures on the WTO to adapt to the new developments, preserve its relevance and play a key role in
positive channelling of globalisation and ensuring more even distribution of benefits resultingtherefrom.
61. The Czech Republic believes that the best response to these challenges is to launch a new and
comprehensive round of multilateral trade negotiations. It is only through such negotiations that the
interests and needs of all WTO Members can be taken into account, while striving for a commonly
beneficial result, based on the balance of the rights and obligations. A new Round is also aThe Czech Republic WT/TPR/G/89
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prerequisite for a more effective involvement of the developing countries and the countries in
transition in the multilateral trading system.  Moreover, a Round is needed to demonstrate the ability
of the WTO and its Members to address concerns of the general public regarding the functioning of
the multilateral trading system and in order to secure the public support for further trade liberalisation.
Last but not least, a new round is the best contribution to the ongoing debate on the relationship
between multilateralism and regionalism.
62. For all of these reasons the Czech authorities will spare no efforts to promote such a
consensus that will enable to launch a new Round by  the time of the forthcoming Fourth Ministerial
Conference in Doha (9 – 13 November 2001).
63. The scope of a New Round has to go beyond the mandated negotiations on agriculture,
services and intellectual property rights. Negotiations in these areas can only produce expected resultsif they are set in a wider framework, allowing trade-offs among various sectors.  The market access
element of the Round should be complemented by negotiations on non-agricultural products, which
represent one of the core agenda of the then GATT and today’s WTO. In addition to measures
focused on the improved market access, negotiations  should be directed towards strengthening and
clarifying the existing rules as well as developing  new rules and disciplines to respond to the ever-changing features of international trade. The Czech Republic envisages that in all stages of the
negotiations a key role will be played by issues related to economic development and that the process
of undertaking new obligations will be supported by increased technical assistance to developing
countries.
64. Turning now to various negotiating topics, the Cz ech Republic is ready to take part in the
process of further reductions in support and protection in agriculture, provided that an appropriate
balance between the trade and non-trade concerns resulting from the Agreement on Agriculture ispreserved. At the same time, the Government expects that negotiations will take account of specific
conditions of countries like the Czech Republic, which underwent a radical and painful process of
transformation of their agricultural sectors and have achieved a high level of market opening, and will
therefore seek appropriate flexibility in the course  of negotiations on modalities for further reduction
commitments.
65. In negotiations aimed at achieving progressively higher levels of liberalisation in trade in
services, the Czech Republic supports the view that no service sector and no method of service
delivery should be a priori excluded. Appropriate procedures should be adopted to allow recognition
of unilateral liberalisation measures. The Czech Republic applies a whole range of such measures and
is ready – in negotiations on market access – to schedule their bindings, depending on the partners’approaches and in exchange for their concessions.
66. The Czech Republic continues to hold the view th at issues relating to additional protection for
geographical indications are part of the mandated negotiations and that these negotiations also cover
an extension of the additional protection to products other than wines and spirits.  It is essential that
ministers in Doha mandate the WTO to complete negotiations related to geographical indications atthe same time as that applicable to other negotiating topics.
67. Liberalisation of trade in non-agricultural products should constitute, in addition to mandated
negotiations, another important pillar of the agenda aimed at improved market access. The
negotiations should comprise all products or groups of products without prioritising which of them
would proceed more rapidly. Concrete procedures for establishing new commitments should result
from negotiations after Doha.WT/TPR/G/89 Trade Policy Review
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68. In addition to market access, the Round should lead to developing new rules in areas of
investment, competition, transparency in government procurement and trade facilitation. Since the
beginning of the discussions on such issues in the WTO in 1996, considerable progress has been
made, justifying to launch negotiations at present. The Czech Republic strongly supports such a
launch.
69. In the areas of investment and competition, the Czech Republic’s support for negotiations is
motivated by its specific experience as a country, which has completely restructured its system of
ownership rights and deregulated its former centrally planned economy. Foreign direct investments,
on which WTO negotiations should focus, have played a key role in the process of economic
transformation, and their importance for further development of the economy is continuously
growing. This explains why the Czech Republic is committed to creating a stable contractualframework which will provide a transparent, predictable and legally certain environment for foreign
investors and concurrently will not undermine the regulatory powers of governments to pursue their
legitimate economic objectives. An appropriate, a GATS-like bottom-up negotiating approach should
be developed and applied to enable individual WTO Members to control the pace of liberalisation and
thus to take into account the Members particular economic conditions.
70. In the area of competition, negotiations should aim at a framework agreement based on the
principles of non-discrimination (national treatment and most-favoured nation approach) and
transparency, while fully respecting the development objectives. It should focus on prevention of anti-
competitive practices, having international dimension and hampering market access, and should
promote co-operation among national competition authorities. Existing diversity in national
approaches does not require harmonisation of domestic competition frameworks. It rather underlines
the importance of flexibility and progressivity as integral elements of a new WTO agreement.
71. The Czech Republic further considers it useful that an agreement be negotiated to ensure
transparency in government procurement procedures applied by Members, including the range of
applicability of such an agreement depending on types of trade, administrative levels of management
and other factors.
72. Negotiations should also be launched to establish a set of rules aimed at simplification and
facilitation of trade procedures. Such rules must be based on the non-discrimination principle in
respect of the administrative procedures and should lead to the substantial alleviation of customs
procedures, adoption of electronic data transmi ssions and overall improvement of transparency.
73. The Czech Republic is also ready to take part in negotiations carried out with a view to
strengthening and clarifying the already existing rules – for example, in the area of anti-dumping. It isinterested in updating the Understanding on Rules and Procedures Governing the Settlement of
Disputes that will take account of experience gain ed to date from implementing the dispute settlement
system.  Electronic commerce is another area in which the Czech Republic is ready to co-operate with
other Members with a view to creating the most favourable framework promoting electronic
transmissions.
74. Last but not least, the Czech Republic will support any effort enabling to inscribe the
interface between trade and environment on the agenda of the Round. Further liberalisation of rules
based international trade and protection of environment have to be tackled in a mutually supportive
manner,  without serving the purpose of green protectionism.The Czech Republic WT/TPR/G/89
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(2) A CCESSION TO THE EUROPEAN UNION
75. The Czech Republic believes that its support to the new, broad based Round of trade
negotiations and multilateral trading system is fully consistent with the country’s highest political,
economic and social priority, which is the accession to the European Union. Both processes are
mutually linked with each other and enable the Czech Republic to find its proper place within the
European context and in the global market environment.
76. Negotiations on the terms of accession to the European Union are currently in a final stage. At
the end of the Swedish Presidency (end of June 2001), the Czech Republic has preliminarily closed 19
of the total of 30 chapters of the future Treaty Concerning the Accession of the Czech Republic to the
EU. These include the chapters on the customs union, economic and monetary union, external
relations, free movement of goods, free movement of services, free movement of capital, theindustrial policy, small and medium-sized enterprises, company law, environment and others. The
Government is committed to complete all accession negotiations during 2002 and will be able to
undertake its obligations pertaining to full membership as from January 1, 2003.
77. The negotiations between the Czech Republic and the European Union have been recently
intensified in order to accelerate and improve the accession process. In the trade policy area, a veryclose co-operation has, for example, been achieved in the process of integrating textile and clothing
under the GATT 1994 rules, negotiating the adjustments to the Harmonised System of Goods
Classification, in the area of technical barriers to trade, as well as in harmonising national legislation
concerning market access and its protections, and other areas.  The Czech Republic also intends to
become a signatory to the plurilateral agreements on trade in civil aircraft and on government
procurement by the time of its accession to the European Union.
78. Trade policy and practices applied within its framework are already harmonised to a
considerably extent with the EU legislation. Any future steps related to the adoption and
implementation of the common trade policy at the time of the accession will be conducted in full
compliance with the WTO principles and rules.
79. The Czech Republic does not envisage that its EU membership will adversely effect its
relations with third countries. On the contrary, it believes that the accession to the European Union
will offer new opportunities for trade and investment not only throughout the European continent but
also with other WTO Members. These gains can be further enhanced and the synergy between both
processes strengthened within the context of the New Round of multilateral trade negotiations.
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