Free trade gains traction

Leading figures in the government have thrown their support behind a proposed free-trade agreement between the European Union and the United States, but the local agriculture sector has declared its opposition to any deal.

The EU and the United States will soon begin formal talks on the idea, paving the way for the biggest trade deal in history, although it is not expected to be in place for at least two years.

European Commission President José Manuel Barroso made the announcement Feb. 13 following U.S. President Barack Obama's State of the Union address, with Washington promising "everything is on the table" in the talks.

Currently, trade between the world's two biggest economies is worth around 455 billion euros ($613 billion) a year, and the EU estimates a "comprehensive and ambitious agreement" would boost its annual GDP growth 0.5 percent.

"The Czech Republic is a longtime advocate of free trade. I believe trade is a key source of growth for our export-oriented economy, and in this context there is still a large untapped potential across the Atlantic," said Industry and Trade Minister Martin Kuba in response to the announcement. "Our main aim will be to get an agreement allowing Czech companies a new approach to the U.S. market and with regard to other contractual relationships, and connectedness to other markets with which the United States and the EU have negotiated a free-trade agreement," Kuba added.

Foreign Affairs Minister Karel Schwarzenberg declared the EU's deci­sion to enter talks with the United States was "one of the best pieces of news in years" and was a victory for the Czech Republic, because it had been one of the main sup­porters of the concept.

Like Kuba, he said the export-oriented Czech economy could only profit from a trans-Atlantic free-trade zone.

Ludmila Štěrbová, the vice dean of the Faculty of International Relations at Prague's University of Economics, said the main Czech interest lies in the abolition of nontariff barriers and simplification of regulatory issues.

"The Czech Republic is also very much interested in the liberalization of trade with services, in gaining access to the U.S. governmental procurement and in investment liberalization," she told The Prague Post. But Štěrbová warned it was also important that any agreement ensure protection of traditional Czech geographical trade marks, such as the world-famous Budweiser beer.

Agriculture is likely to be a significant challenge in the negotiations, with the European farming industry already heavily subsidized through the Common Agricultural Policy. The European head of agriculture has already expressed reservations about the impact a free-trade deal might have on the sector, and the sentiment is echoed locally.

"The Czech Agrarian Chamber shares [the] concerns of the EU Commissioner for Agriculture and Fisheries, Dacian Cioloş. We do not support [a] free-trade deal," said chamber President Jan Veleba.

The United States is currently the Czech Republic's 13th-biggest trading partner, representing around 2 percent of the country's whole foreign trade.

Andrew Greene can be reached at
agreene@praguepost.com