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Slovakia: CEFTA not 'losing its breath' says Czech PM

Jasna, Slovakia, 17 September 1996 (RFE/RL) -- The Central European Free Trade Agreement (CEFTA) zone continues to grow and could represent more than 150 million cosumers next year. It clearly seems to be overcoming its recent difficulties.

Czech Prime Minister Vaclav Klaus said at a weekend summit of CEFTA leaders in the Slovak resort Jasna that CEFTA is not "losing its breath." But he did admit that "it's easier to make large strides at the beginning. Once you get to the more sensitive stages, it becomes more difficult. But that is not losing a breath. It is simply a logical development."

CEFTA was signed four years ago (December 1992) in the Polish city of Krakow as a trade agreement between the Czech Republic, Hungary, Poland and Slovakia. Slovenia joined the organization last September.

Its has aimed at the gradual establishment of a free trade zone between the associate countries and the elimination of barriers to mutual trade. In Jasna this commitment was reaffirmed. And they pledged to eliminate "most" trade obstacles by January of next year. But tariffs in some sensitive areas, such as agriculture and the automobile industries, are to be phased out only by the year 2001.

Slovenia, which will assume the group's rotating presidency next year, says that with expanding consumer base, "CEFTA is now on a global level." Slovenia's deputy Prime Minister, Janko Dezelak, told RFE/RL that as trade barriers between the member countries continue to drop, commerce will increase. "Intra-CEFTA trade could reach 25 percent" by the year 2000, he said.

The organization is also attracting interest in neighboring countries. Lithuania's deputy Foreign Minister, Algimanas Rimkunas, told RFE/RL that "quite recently our government has expressed, officially, the wish to join CEFTA." He said membership in the organization would help Lithuania's trade opportunities and force local companies to become more competitive in a bid to enter new markets.

Russian Prime Minister Viktor Chernomyrdin said Russia is following the the development of CEFTA with interest and would like to open a dialogue with the group to improve trade with CEFTA countries.

Ukraine and Latvia expressed an interest in developing a co-operation agreement as well. And Romania is making a bid for membership in CEFTA. In an open letter to the CEFTA summit, Romanian Prime Minister Nicolae Vacaroiu described his country as one "with an important economic and human potential" which is "interested and capable to link itself at the circuits and requests of the world and European markets."

Romania hopes to join the organization next year. It has already fulfilled most of the requirements. This included conclusion of free trade agreements with most of CEFTA's current members, being a party to the World Trade Organization and having an association agreement with the European Union.

The European Union is one of the reason why the interest in CEFTA membership is so strong. Slovenia's Dezelak said a number of the countries see CEFTA as a "stepping stone" to the EU. He said CEFTA membership is teaching countries whose economies are in the transition stage on how to harmonize their policies with the EU.

But Klaus and Slovak Prime Minister Vladimir Meciar say member countries should also consider the benefits they have reached through the free trade among themselves, and not just view it as a stepping stone to some other body.

"The expansion of our markets is continuing and there is great potential for even more expansion," Meciar said at a post-summit news conference." Klaus concurred, saying "we all feel the positive impacts on our economies that CEFTA has created. And there is no other choice but to continue."

Further development of CEFTA is likely to affect cooperation in capital markets as well. Polish Prime Minister Wlodzimierz Cimoszewicz told RFE/RL his country has proposed to arrange a conference for representatives of commercial banks in the member countries. "Poland is ready to organize such a conference because we believe those banks have a very important role to play to support the trade between our contries," he said. No date for the conference has been set yet.