The customs union between the Czech and Slovak Republics has been a point of attention of the politicians, professionals, journalists, and general public. Although being a part of more than standard relationships, doubt was often cast upon it. This was also a reason for addressing the most competent man to discuss this topic - Rudolf Besik, general director of the Permanent Office of the Secretary to the Customs Union Council.

Did the World Trade Organisation express any reservations at the time of the customs union establishment between the Czech and Slovak Republics?

No, in contrary, this was the world first customs union with no transition period. It was formed on the foundations of the former unitary state with unified customs rates, and the willingness of both parties was the only momentum needed. The customs union notification in Geneva (at the time at former GATT, presently WTO headquarters) was passed with no reservations.

Recently some politicians doubted the Czech/Slovak customs union advantage. What is the present status in declaring the relevance of this institution?

Last year, following the Czech Republic Parliamentary elections and later the Slovak Republic National Council elections the attitude shifted significantly in valuing the customs union advantage. A similar move in the attitude was also noticed towards the Visegrad Four Group, established to co-ordinate a joint process of Poland, Hungary, Czech and Slovak Republics, and towards the CEFTA countries. The Slovak/Czech Republics customs union relationships are to be considered indirectly also to be the Slovak/EU relationships.

Speaking of EU - the EU devotes substantial subsidies to farming...

The farming and food products are a sensitive issue in most countries, since their over- or under-supply has direct social impact. The difference compared to the EU countries is also in collecting the customs duties right at the point of entry to the EU boarder country to be turned over to the common funds. These funds are distributed also as farming subsidies. Yet since the EU attempts to structurally change the financial allocations, the EU farmers joined to massif protest actions against a threat of lower subsidies.

In addition to the existing differences between the Czech and Slovak farming in our customs union both countries address their revenue policy independently and the farmers are subsidised according to the actual circumstances. This is why our farmers claim that the foreign products enjoy much higher level of subsidies than the domestic ones.

Certain friction areas appear to emerge even within the customs union for farming and food products.

This is why elimination of the disputed items was resolved by the inter-departmental agreements on co-operation between the Czech and Slovak Ministries of Agriculture based on customs union. Another tool of assistance is the Agricultural Policy Co-ordination Board to identify the best solutions to current problems.

What is the main mission of the Agricultural Policy Co-ordination Board?

The Agricultural Policy Co-ordination Board is to search for optimal ways while maintaining mutual advantage, which should be understood as avoidance of preferential treatment of either party. One of the solutions is to place the over-production at the third markets.

The third market solution does not work for every commodity. Then how to deal with the protectionism measures?

Regretfully, in the past we paid more attention to the restrictive rather than export supporting measures. Each country struggles to protect its market, especially in the transition period. Yet the central bodies should create such business conditions that allow development. Under the market economy conditions it is unacceptable to close oneself off from the external competition. In protecting the market it is more important to look for optimal business solutions within the WTO. The act on excessive imports and anti-dumping act represent tools that could be modified to our internal conditions. In other words certain level of market protection is crucial. The question is, however, to which extent have the competent officials a command of the tools that could be meaningfully used. Slovakia imposed an import surcharge, which helped to some extent. Presently we consider again certain regulating provisions for the export and import streams to avoid a vast trade balance loss.

Slovak Trade FORUM