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Transcript of CEFTA
Free Trade Agreement - Free trade agreement formed among countries in Central Europe.
- Originally signed in 1992 in Krakow , Poland and signed again in Bucharest, Romania in 2006.
- The original intent was to prompt CEFTA countries to trade with one another and to incorporate with other Western European markets.
- CEFTA serves as a springboard for countries to join the EU. What was CEFTA (1992)? -Signed in 1992 in Krakow by the original members of the Visegrad Group
-Members of Central Europe attempting to integrate into Western European affairs and institutions in order to become more involved politically, economically, and legally.
-Ended up being a primer for entry into the European Union for member states
->According to the Slovenian Prime Minister, "Cefta proved to be a good waiting room" for membership into the EU. ('CEFTA, the EU Waiting Room article) What is the Visegrad Group? -Signed February 15th, 1991 by The Czechoslovak Republic, The Republic of Hungary, and The Republic of Poland in Visegrad, Hungary.
-Goal was to increase friendly ties and "mutual cooperation" among the three nations
-Motivations for forming the V4:
"the desire to eliminate the remnants of the communist bloc in Central Europe;
the desire to overcome historic animosities between Central European countries;
the belief that through joint efforts it will be easier to achieve the set goals, i.e. to successfully accomplish social transformation and join in the European integration process; and
the proximity of ideas of the then ruling political elites."
(From the official Visegrad Group website) Who was involved? -The original members of the Visgrad Group (Visegrad Declaration of 1991) signed CEFTA in 1992:
The Czech Republic
The Republic of Hungary
The Republic of Poland
The Slovak Republic
-Slovenia joined in 1996, Romania in 1997, Bulgaria in 1999, Croatia in 2003, and Macedonia in 2006 What was CEFTA (2006)? -CEFTA decided that they should extend to other states when Poland, Hungary, Slovakia, Czech Republic, and Slovenia left CEFTA to join the EU.
-In 2006 Macedonia, Albania, Bosnia, Herzegovina, Moldova, Montenegro, Serbia, and Kosovo all signed into CEFTA
-The agreement with the new states went into effect on July 26, 2007 A. to promote through the expansion of trade the harmonious development of the economic relations between the parties and thus to foster in the parties the advance of economic activity, the improvement of living and employment conditions, and increased productivity and financial stability.
B. To provide fair conditions of competition for trade between the Parties
C. To contribute in this way, by the removal of barriers to trade, to the harmonious development and expansion of world trade.
(From the Original CEFTA Agreement) Objectives of CEFTA 1992 Why was CEFTA formed? Original intent was to prompt CEFTA countries to trade with one another, and to incorporate with other Western European markets.
CEFTA was used as a starting point for countries to later join the EU (just like the Baltic Free Trade Agreement [BAFTA])
In 2013, Croatia will join the EU and most likely leave CEFTA, as other nations before it.
Many say the departures of countries from CEFTA after joining the EU may cause CEFTA to follow the fate of the BAFTA (all states left the agreement, BAFTA no longer exists)
Most likely, CEFTA will open its doors to other Eastern European countries that need preparation for the EU. Why is the EU important? CEFTA Trade Portal Objectives of the 2006 Agreement -Created to help aid the implementation of the agreement
-Provides information such as regulations for customs, licensing, technical requirements, and border control
-For more information you can go to the CEFTA trade portal at CeftaTradePortal.com What is a "free trade agreement"? -A free trade agreement creates a "free trade zone" in which tariffs and import quotas are eliminated among the participating nations
-Helps to boost the economy by stimulating trade across borders Steps to joining the EU: According to the European Commission, there are three steps a country must go through before becoming a part of the EU:
1. Country becomes a candidate for membership
2. Formal membership negotiations
3. Joining of the European Union Amendments to CEFTA (1992) -After WWII, provided a foundation for peace and stability in Europe.
-Provides external and internal safety and security.
-Provides economic growth for its members, and a singular market.
-The EU is the world's leading trading power, so it plays a big role in negotiations at the international level. -Amended in Brno in 1995 and Bled in 2004
-Amendment in Brno allowed for any European nation to accede into CEFTA with the consent of all parties in CEFTA and terms and conditions of accession will be determined by the parties in CEFTA and the potential CEFTA member -Peace among the nations
some countries for example Ireland, Spain , and Portugal have made great strides trying to catch up to their European neighbors
Also after the fall of the Berlin Wall, Poland, and Czech Republic they saw a strong growth in real GDP
Free trade and removal of non-tariff barriers
it has cut the consumer cost and increased the trading within the EU by 30% since 1992 Membership Criteria Benefits of Joining the EU World Trade Organization membership
Signing of the EU's Association Agreement
Consent from the current CEFTA members through finished negotiations on bilateral Free Trade Agreements. What is included in CEFTA? -both agricultural and industrial products
-Rules of origin, internal taxation, state monopolies, payments, protection of intellectual property, balance of rules of competition, state aid, customs matters, etc.
-1992 treaty declared reductions or lifting of customs in their territory and complete elimination of international customs by 2001 -Environmental treaties have been made
-Capital and free movement of labor have made more of a flexible economy
-EU is one of the strongest economies. It counts for 20% of world GDP
-Enables people to travel freely across states
-1.5 million students have completed their studies in another member state with the help of the Erasmus Program. The study abroad process is considered to be a positive experience by 84%.
-Countries in the EU have some of the highest HDI positions Benefits of Joining the EU -CEFTA replaced 32 bilateral free trade agreements with one agreement
They wanted to promote investments and foreign direct investment
Expand trades in goods and services
Eliminate barriers to further cross-border movement of goods
Provide fair conditions of competition affecting foreign investment
Provide protection of intellectual property rights
Provide effective procedures for the implementation of this agreement