Central European Countries Cite Obstacles to Economic Integration

Western trade barriers hinder transition from a communist system to a market democracy, they say

IN Central Europe's search for stability, most of the attention is focused on defense issues and potential membership in the North Atlantic Treaty Organization (NATO). But some Central European leaders suggest that regional security depends more on economic progress than military protection.

``We cannot discuss stability in this region without discussing development in this region,'' Czech Foreign Minister Josef Zieleniec told the Monitor in an interview. When it comes to economic cooperation, many officials of the Visegrad states - comprised of the Czech Republic, Slovakia, Hungary, and Poland - are critical of the West, especially the European Union (EU), for not doing enough to foster regional economic development.

During the twilight of the cold war, former United States President Ronald Reagan made an impassioned plea for Communist leaders to tear down the Berlin Wall, the most glaring symbol of European division. The wall fell in late 1989, but, many Central European officials say, major obstacles to continental integration remain. They cite Western trade barriers as one of the biggest hindrances to Central Europe's successful transition from the communist system to a market democracy.

Despite Visegrad complaints, EU nations - which are struggling to overcome a stubborn recession - have remained highly protective of their markets. The response of the Visegrad states to EU protectionism varies.

Officials in the Czech Republic, with its relatively strong economy, are more muted in their criticism. ``We don't want special programs or aid,'' Mr. Zieleniec says. ``For us it's important to have the feeling that doors are open, and that we have our fate in our own hands.''

Slovakia - perhaps the Visegrad state experiencing the most difficulty in retooling its economy - is more outspoken on EU trade practices. ``We realize full economic integration is not possible in the near future,'' Slovak Foreign Minister Jozef Moravcik told journalists in Bonn last month. ``But it is particularly important for us to expand cooperation and gain access to various markets that are now severely restricted, especially in areas where we can compete.''

One such area is steel, says Miroslav Somol, the Czech Republic's deputy minister of trade and industry. According to Mr. Somol, the Czech Republic and the EU implemented a deal in March 1992 that lifted restrictions on steel trade. But several months later, after Czech producers started making inroads into Western markets, EU officials reestablished trade barriers.

``Once we reach a certain success in our exports, we are stopped, or at least limited,'' Mr. Somol says, adding that ``we [the Czech Republic] fully appreciate the position of the EU.''

The position he refers to is one of high unemployment, complicated by the pressing need to restructure several key industrial sectors to regain competitiveness. The EU steel industry, for one, requires a drastic overhaul.

Among the 12 EU member states, the number of unemployed is predicted to hover between 17 million and 20 million until at least mid-1995. Some forecasts, for example, say German unemployment totals could rise from about 3.7 million currently to about 4 million later this year.

EU diplomats say that given the recession, providing greater market access to Visegrad nations is not possible at this time for domestic Western European political reasons.

Visegrad leaders were encouraged by President Clinton's European tour last week, which included stops in Brussels and Prague. The US president sought to strengthen not only the West's defense relationship with Visegrad states, via the Partnership for Peace plan, but also to pick up the trade pace. ``I urged them [EU leaders] to relax their trade barriers,'' Mr. Clinton told business leaders in Prague. ``I agree you [Central Europeans] should have equal chances, and we'll try to give it to you.''

Some Czech officials and business people feel that only full membership in the EU will eliminate the trade barrier issue. But they add that they do not expect Visegrad countries to join the EU anytime soon.

In December 1991, what were then the three Visegrad states - Czechoslovakia, Hungary, and Poland - signed association agreements with the EU that committed the signatories to free trade within 10 years and allowed for eventual membership in the organization.

All Visegrad states say they are interested in joining the EU, as well as NATO, but the timetable for membership seems to be receding into the 21st century.

Somol, citing the current membership negotiations between the EU and Austria, Finland, Norway, and Sweden, says Visegrad entry will be even more complicated. EU officials recently said unresolved trade issues may make it impossible to meet a March 1 deadline for reaching membership agreements with Austria and the Nordic states.

The Czech Republic could be economically qualified for full EU membership in as little as two years, Somol says. ``But there are other issues connected with EU membership, for example, the legal system,'' he says.

Ensuring stability in Central Europe could be a race against time, some political observers say. The West's hesitation in promoting prosperity could result in a revival of traditional political, economic, and ethnic disputes that have plagued the region for centuries. Some shortcuts may be needed to keep Visegrad democratization on course, the experts add. ``The European response has been disappointing,'' says one Western political expert, speaking on condition of anonymity.

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