Jurassic Park Marketing
... free-trade region, and thus removing mutual barriers among their member states. The agreement set out a strategy for the gradual liberalization of mutual trade with all the tariff and non-tariff barriers in industrial goods and eventually scrapped by January 1, 2001 (it gave the countries in transition a special privilege of slower liberalization similar to that of developing countries). Perhaps the main reason why CEFTA's countries cannot decide whether their club is for expanding their regional trade or entry into the European Union is that the members trade far more with the EU than they do with each other. However, the potential trade creating effects are overshadowed by the still existing high tariffs in the region. Poland, for instance, encourages its farmers to buy domestic tractors by imposing a 26% import tariff on Czech-built tractors. Hungary guards its pharmaceutical industry with an 8% import tax. The Czechs, Polish, and Slovaks do their best to keep Hungarian sunflower oil out of their markets with a range of tariffs ranging from 19% and 45%. Slovakia maintains a 10% tax on everything, which comes to the country. Therefore, unless the CEFTA countries move faster to remove import duties, they may give the EU an excuse to delay their bids for membership of that tariff-free zone. It may seem at the first glance that CEFTA countries are not doing too well when it comes to fulfilling the objectives of their agreement. Nevertheless, we must note that the situation could be much worse if there were ...