By IPS Correspondents
BRATISLAVA, Sep 30 1996 (IPS)

Leaders of five Central European countries in transition are coming to terms with the fact that there is little prospect for a dramatic improvement in regional trade liberalisation.

During recent meetings they stressed that though a lot had been done in the last four years to create a full-fledged free trade zone for 70 million people, now that the going is tough the political will to get going is just not there.

Slovak Prime Minister Vladimir Meciar said: “Our exporters and producers still see more advantage in exporting to the EU (European Union) countries than to the Hungarian or Polish Republics”.

After concluding the annual meeting of the Central European Free Trade Agreement (CEFTA) many agreed that the body could probably best play the role of “launching pad” for those seeking full membership in the EU. In other words, that CEFTA was losing focus of its primary function as facilitating intraregional trade.

“The Prime Ministers … have expressed … their feeling that all Central European Free Trade Agreement countries have reached substantial progress in liberalisation of trade in industrial products,” reads the text of the joint declaration of the CEFTA summit given to IPS.

The summit of the five nation CEFTA was held at the Lower Tatra mountain resort of Jasna in Slovakia Sep 13-14.

Not long after the summit, the version of the document published by Narodna Obroda daily of Bratislava said “all chances to liberalise the trade with industrial goods among the CEFTA countries have already been exhausted”.

In other words, further reduction of tariff and non-tariff barriers, as called for in the group’s statutes, will not be as easy as before.

Nevertheless, there is some hope that “further possibilities of liberalisation” will be found in the future. The problem is that the process is at a point where liberalisation cannot be achieved without causing some pain to one country or another.

(The International Monetary Fund’s (IMF) annual World Economic Outlook, released last week, said there was a sharp rebound in activity in the transition economies of eastern Europe and the former Soviet Union, although this upturn will be vulnerable to setbacks in the process of stabilisation and reform.)

The Jasna meeting had few concrete results. Two additional protocols were adopted, one on rules of determining the origin of goods, the other finalising a new system of numeric codes of goods. Tellingly, both protocols harmonise CEFTA procedures with those of the EU.

CEFTA was originally created by the Czech Republic, Hungary, Poland and Slovakia in December 1992. Agreement on accession of Slovenia was signed three years later, and still is awaiting ratification by all member countries.

According to the basic treaty, a transitory period until Jan. 1, 2001 was set to remove all barriers to industrial goods. The transitional period was gradually shortened so that free trade zone for ‘non-sensitive’ items is to be completed by Jan. 1, 1997. Customs tariffs for about 90 percent of industrial products have been abolished or substantially reduced.

Left out are agricultural products for which the transitional period may run well into the next century. Here, liberalisation measures were started as late as the beginning of this year, so far concerning mostly ‘exotic’ or ‘uninteresting’ commodities.

The Czech Republic is kee to bring down this class of tariffs while the rest, first of all Hungary – at least according to a recent pronouncement of the Czech Prime Minister Vaclav Klaus – are rather reluctant.

Much discussed at the Jasna meeting were farm trade concessions dispensed to Slovenia. Ljubljana’s representatives argue that as a newcomer it was not present when lists of the ‘sensitive items’ were elaborated, and now it maintains that its specific claims should be taken into account.

The joint declaration insists on Slovenia to “bring the number of exceptions to a minimum”, and to be ready to cancel them altogether by January 1, 1999.

The summit decreed that “all necessary negotiations with any acceding country should be concluded before signing of the Accession Agreement”, to avoid similar snags in the future.

This was meant first of all for Romania, the next candidate for CEFTA membership. Czech trade and industries minister Vladimir Dlouhy advised participants to be “more robust” on the question of CEFTA enlargement, pointing out that Romania’s economic parameters are in many respects different from those of the other Central European nations.

Anyway, hope was expressed that the “Romanian side would be able to meet all necessary conditions in order to become a Party to the CEFTA in the year 1997”. The Prime Minister of Romania, Nicolae Vacaroiu, was a guest at the meeting along with his Bulgarian and Lithuanian colleagues, as well as senior officials of Ukraine and Latvia.

Czech Prime Minister Klaus showed his displeasure with the slow pace of removal of all types of barriers since the 1995 CEFTA summit in Brno, in the Czech Republic, where measures concerning ‘sensitive items’ were agreed.

As far as Slovakia is concerned, its trade with the CEFTA countries was more or less stagnating in the first half of this year, as compared to substantial increases in 1994 and 1995, with Slovakian exports having even decreased by some five percent.

But Meciar may have another reason to complain. His attempt to use the Slovak chairmanship to get a nod for creation of a CEFTA secretariat in Bratislava failed.

Wary of creating any new structures, the heads of governments agreed only to increase the involvement of the heads of commercial departments accredited to the chairman country. Beyond Slovakia there is apparently little interest in the group’s institutionalisation, let alone promoting the regional status of Bratislava.

For the next year, the chair of the group will rotate to Slovenia. No breakthrough in the regional liberalisation process may be expected during this time though.

“Documents, legislature and mutual relations have to conform to the European usage. In this way is CEFTA a training field for the EU,” Jozef Sucha, the spokesperson of the Slovakian ministry of economy told journalists after the Jasna meeting.

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