Identifier
Created
Classification
Origin
05PRAGUE117
2005-01-25 15:52:00
UNCLASSIFIED
Embassy Prague
Cable title:  

Czech Republic Response to EU Commission

Tags:  ETRD EINV PREL EZ 
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UNCLAS SECTION 01 OF 03 PRAGUE 000117 

SIPDIS

STATE FOR EUR/NCE AND EUR/ERA
STATE PASS USTR FOR LERRION
COMMERCE FOR 4232/ITA/MAC/MROGERS

E.O. 12958: N/A
TAGS: ETRD EINV PREL EZ
SUBJECT: Czech Republic Response to EU Commission
Questionnaire on the Transatlantic Economic Relationship


UNCLAS SECTION 01 OF 03 PRAGUE 000117

SIPDIS

STATE FOR EUR/NCE AND EUR/ERA
STATE PASS USTR FOR LERRION
COMMERCE FOR 4232/ITA/MAC/MROGERS

E.O. 12958: N/A
TAGS: ETRD EINV PREL EZ
SUBJECT: Czech Republic Response to EU Commission
Questionnaire on the Transatlantic Economic Relationship



1. Summary: The European Commission presented all EU member
states with a questionnaire seeking their views on obstacles
or barriers to trade and investment between the U.S. and EU
and appropriate ways to remove them. The Czech MFA shared
with us their responses to the questionnaire, which was
based in part on meetings with Czech stakeholders. The
Czechs maintain that enhancement of the Transatlantic
Economic Partnership is highly desirable and expected to
have a positive impact on implementation of the Lisbon
process, but any steps taken and decisions made should
conform to WTO rules and the Doha Development Agenda (DDA),
to ensure that other countries do not view it as directed
against them. Thus the Czechs leave only a little space for
bilateral steps in areas not yet fully covered by
multilateral agreements.


2. Most significant obstacles to closer
U.S.-EU partnership on U.S. side
- - - - - - - - - - - - - - - - -

The key obstacles as seen by the Czech government are:

a) The visa obligation for some EU states including the
Czech Republic.
b) Higher U.S. tariffs on imports of agricultural products,
chemicals, glass, costume jewelry, and porcelain. Confusion
caused by differences in U.S. and Czech categorization of
Harmonized Tariff System (HTS) at greater than 6-digit
level, which means that Czech firms cannot use the HTS at
that level of specificity.

c) Import quotas, especially for agricultural products, and
complicated import procedures


3. Practical measures to remove the obstacles
- - - - - - - - - - - - - - - - - - - - - - -

a) Removing the visa obligation for all EU member states as
it becomes an increasingly serious factor influencing
competitiveness in the U.S. market (due to their joint
security policy, the same applies to the Canadian visa and
market).

b) Make full use of current negotiations in the Doha
Development Agenda to remove tariff and non-tariff barriers.

c) Apart from the multilateral Doha negotiations, each and
every possibility of bilateral negotiations at various
negotiation levels must be used.

d) EU should promote the Eurozone among the U.S. business

community as a stable region to establish economic ties
with.


4. Additional measures to further
transatlantic economic integration
- - - - - - - - - - - - - - - - -

Minimize exchange rate fluctuations and avoid long-term over-
or under-valuation of currencies.

Encourage cooperation and understanding of the business and
social environments including through internships in start-
up companies.


5. Which new areas of the bilateral
agenda should be addressed?
- - - - - - - - - - - - - - - - - - -

The U.S.-EU bilateral economic agenda has made some progress
(through Financial Markets Regulatory Dialogue, Guidelines
for Regulatory Cooperation and Transparency, Galileo-GPS and
the Mutual Recognition Agreement on Marine Equipment),but
further progress can be made in:

- Harmonization of standards and regulation of mobile
telecommunication services,

- Liberalization of access to the transport services,

- Access for EU companies to U.S. governmental and state
procurements, for environmental goods and services.


6. What measures to promote good
corporate governance and reliable financial
information in the transatlantic market?
- - - - - - - - - - - - - - - - - - - -

- Cooperate in development of multilateral trade rules
(within DDA WTO),

- Harmonize accounting standards on both sides,

- Mutually recognize results of audits.


7. Essential steps to ease transatlantic
direct and indirect investment
- - - - - - - - - - - - - - - - - - - - -

- Reopen bilateral dialogue on liberalization of sectors
with limited access for foreign investors. This dialogue in
OECD stopped after the new OECD member states fulfilled
their commitments for liberalization while U.S., Canada,
Mexico and others maintain a number of rather restrictive
reservations both in general and sectoral groups.

- Specific problem/barrier: the U.S. screens investments
with national security implications. It uses a relatively
broad interpretation of national security, and adverse
decisions cannot be appealed. No compensation for lost
profits as a result of the decision is available


8. Proposals to protect the environment,
consumer interests and health and safety as well
as labor standards while promoting economic integration. --
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Both parties should cooperate bilaterally and within OECD,
UN etc on implementation of the Corporate Social
Responsibility (CSR) principles and instruments, also
promoting them in the developing countries,

- negotiate with U.S. so as to change its position toward
Kyoto Protocol and harmonize legislation on emission limits,

- pursue the sectoral initiative in environmental goods and
services within DDA WTO, in compliance with the Declaration
of the 4th Session of Doha Conference of WTO Ministers,

- U.S. system of consumer protection is more complex than in
EU, and the U.S. system of enforcement of liability for
damage may be viewed by EU entrepreneurs as a trade barrier.

- "Official control" (details not specified) of goods
exported to the U.S. should be avoided.



9. What remedies should be taken to ease
the impact of new border and transport
security measures on trade, investment and travel?
- - - - - - - - - - - - - - - - - - - - - - - - -

Both sides should develop and fully utilize channels to
discuss current or future security measures and regulations
and consult each other on their effectiveness.

They should also:

- determine more contact points on the U.S. side for
notification/reporting of imported goods to U.S.

- allow round-the-clock phone notification/reporting on
imported goods

- allow e-notification/reporting

- distribute U.S. forms for the purpose of
notification/reporting to competent Czech institutions.


10. What steps to take to jointly
improve IPR protection?
- - - - - - - - - - - - - - - - - -

- Improvement of the level of information available to both
parties, enhance mutual communication and cooperation

- Timely detection of problems and use of high-quality and
well-tested procedures for their solution

- Enhancement of consistency of the national legislation
regarding IPR international treaties

- Make joint efforts toward an effective strategy for
combating global piracy and forgery.


11. To remedy problems when tendering
for public contracts in U.S.
- - - - - - - - - - - - - - - - - - -

- make use of bilateral negotiations at various levels to
eliminate negative/potential impacts relating to the Buy
American principle applied by U.S.


12. To further liberalize transatlantic
trade in services including professional
qualifications
- - - - - - - - - - - - - - - - - - - - -

- create institutional conditions for joint assessment of
trade policy

- analyze with maximum openness all trade and other barriers
in mutual trade in service with participation of
entrepreneurs, professional associations, trade union, NGOs
etc.

- identify jointly the nature of the barriers (whether
strategic or tactical) and determine timetable for their
gradual removal

- when negotiating, apply the principle of "do not ask for
more than you yourself are able to offer"


13. Do you think further elimination or reduction of
tariffs between U.S. and EU is important? Specify which
ones or in which sectors
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -

This is a long-term problem. It is first necessary to
eliminate retaliatory measures imposing trade barriers. The
only practical way forward from there is through the Doha
Development Agenda. Because all WTO members benefit from
concessions there, it would be best to pursue sectoral
initiatives in sectors of high technology and to enhance
business cooperation. Other opportunities for
liberalization can be found in non-WTO areas such as
investment and competition rules.


14. Possible impact of strengthening EU-U.S. bilateral
integration on the multilateral system and the interests of
developing countries
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

While further integration would set a positive example,
certain negative effects can't be ruled out. The U.S.-EU
process cannot be a closed system. It must help deepen
multilateral liberalization of the world trade and also
respect justified interests of developing countries. In
this respect further liberalization of agricultural products
will be an extremely sensitive issue.


15. Input by academia
- - - - - - - - - - -

Czech academia represented by the private College of
International and Public Relations contributed its views on
the issues. While most of them reiterate the official
answers, suggesting the school was probably consulted in
working out the official position, they also propose
establishing of a permanent consultative body which would
review legislation and regulation to be sure it is in
conformity with WTO rules and which would have authority to
postpone their implementation until after arbitration. They
suggest a special and accelerated mechanism for U.S.-EU
dispute settlement within the WTO. They put emphasis on
harmonization of accounting and auditing rules, as well as
other norms and procedures. .


16. Comment
- - - - - -

The official Czech position definitely supports further
U.S./EU cooperation and integration as a desirable,
necessary and inevitable development for both bilateral and
global progress. However, they see the ball to be in the
U.S. court in most areas.

CABANISS