The EU Factor in Trade Policies of Central European Countries */

The paper examines the development of foreign trade institutions and policies in Central European countries that were invited to negotiate accession to the EU. The dismantling of state trading has dramatically liberalized conditions in market access. Yet, with the exception of Estonia and to a lesser extent the Czech Republic, they have followed the policy of bilateral rather than multilateral foreign trade liberalization. Although the fall in tariff rates on preferential imports has prompted search for NTBs, their trade regimes have remained open. It is surprising considering a strong protectionist sentiment in economic administration. It appears that regional disciplines (the EU factor) combined with the legacy of low tariffs under GATT commitments have been responsible for this outcome. Tensions between domestic protectionist impulses and EU (as well as other WTO members’) interest in improving conditions in access to CE-5 markets have shaped their foreign trade policy. Key terms: foreign trade policy, transition economies, tariffs, non-tariff barriers, regional integration, European Association Agreements Correspondence: Bartlomiej Kaminski, 3880 University Ave. NW, Washington, DC 20016, USA e-mail: [email protected] */ The author gratefully acknowledges very helpful comments from Pedro Alba, Zdenek Drabek, Ardo Hansson, Costas Michalopoulos, Philip Schuler and David Tarr. The views expressed in this paper are those of the author and do not necessarily represent the views of the World Bank or its members.