The Slovenian Presidency

In January of this year Slovenia assumed the one-year presidency of this Central European economic partnership for the second time to date. Its first stint as the presiding member was back in 1997. At that time CEFTA had five members - the Czech Republic, Hungary, Poland, Slovakia and Slovenia - but since then Romania, Bulgaria and Croatia have all joined this free trade area. CEFTA therefore connects countries that together represent a market of more than 100 million people.

Slovenia assumed the presidency in a crucial year that was marked by CEFTA's tenth anniversary and the accession of a new member, Croatia. As a matter of chance, Croatia joined the partnership in March of this year, just as it was celebrating its tenth birthday. While the organisation had grown in recent years, five members - the Czech Republic, Hungary, Poland, Slovakia and Slovenia - are about to leave it as they join the European Union on May 1 of 2004. This will be one of the issues discussed at the Brdo pri Kranju conference that will also represent the end of Slovenia's presidency.

The tradition at CEFTA summits is to carry out an assessment of the past year's work and exchange views on the topical issues facing the partnership. The prime ministers of the ten member countries are also expected to examine the development of trade and mutual co-operation, especially in light of the partnership's tenth anniversary. Other aspects of CEFTA's functioning will also be reviewed, with the future being a very important element of discussions. The official part of the programme will take place on Friday, November 7, when a plenary session of the eight delegations - they will also be received by Slovenian President Janez Drnovšek - is due to take place.

A review of the previous summits reveals that the prime ministers positively assessed CEFTA's role in promoting economic development in the member countries and their accession to European organisations. They agreed that the partnership must continue to function even after five of its members leave for the EU. CEFTA must therefore remain open to countries of the region that fulfil the requirements and express an interest in joining this partnership. These were also the main highlights of Slovenia's CEFTA presidency. In the past year, Slovenia organised a meeting of CEFTA agriculture ministers, a session of the subcommittee for trade in agriculture products, a meeting of state secretaries responsible for foreign economic relations and a number of expert meetings in different fields.

Promoting Trade Ties

One of CEFTA's main priorities is promoting trade relations between member states. Since the implementation of the agreement, results have continued to mount. In 2002, trade with the CEFTA member states represented more than 9 percent of all Slovenian trade. If Croatia was included, this figure would stand at 15 percent. Slovenian exports to CEFTA countries - excluding Croatia - increased by 15.2 percent in 2002 and totalled 954 million euros. Meanwhile, exports to Croatia increased by 6.7 percent, with volume equal to that of all other CEFTA members put together. Total exports to CEFTA, including Croatia, therefore amounted to 1,900 million euros.

Imports from CEFTA members, excluding Croatia, totalled 1,100 million euros in 2002, a figure on par with that of a year earlier. Imports from Croatia, meanwhile, dropped a little to stand at 420 million euros. Including Croatia, CEFTA imports amounted to over 1,500 million euros in 2002. Slovenia has seen exports to CEFTA members grow by 5.6 percent in the first half of this year. In the same period, imports from these countries grew by 6.4 percent. Excluding Croatia, Slovenia has persistently seen a deficit in trade with CEFTA member states. This has been greatly reduced over the past two years. The deficit can be attributed in most part to trade of agricultural products, with Slovenia importing 12 times more than it exports in this sector. In trade with industrial products, Slovenia sees the export to import ratio stand at 10:9.7. However, if Croatia's deficit in trade with Slovenia is taken into account in these statistics, Slovenia's balance of trade with CEFTA is shifted into the black.

CEFTA Aims

Although the CEFTA partnership encompasses countries that find themselves at different stages of development, their common goals include the formation of a functioning market economy, the assurance of continued development, the promotion of welfare, as well as the protection of human rights and democracy. The area covered by CEFTA is an increasingly open market, with the level of competition growing daily. Also on the rise is the volume of direct foreign investments flowing into the member states, something that additionally promotes development. CEFTA members also assisted each other in the process of acceding to the European Union, even though this is not specified in the partnership agreement. The basic element of CEFTA is encouraging co-operation among the involved countries and developing mutual relations, particularly in the economic field, thereby opening doors to new opportunities in economic development of the member states.

The Central European Free Trade Agreement was signed in Krakow on December 21 of 1992 and came into force on March 1 of 1993. The agreement on Slovenia's entry into CEFTA was signed on November 25 of 1995 and took effect on January 1 of 1996. In 1998, it was Romania's turn to accede, followed by Bulgaria a year later and Croatia in March of this year. The member states abolished customs for a majority of industrial products with a 1996 additional protocol that was signed in the Slovakian city of Jasna.

The agreement does not envisage full abolishment of customs for agricultural products. Instead, CEFTA classifies products in four groups: A - products completely free of customs, B - products with a reduced customs rate, as well as C and D - agreed upon bilaterally for products for which customs have been either reduced or abolished and which may also be subject to tariff quotas.