Czechoslovakia International Organizations Content •I. Czechoslovakia •The First Republic of Czechoslovakia •Protectorate of Bohemia and Moravia •Czechoslovakia after WWII •Czechoslovak Socialist Republic • •II. International organizations • •A. GATT, B. WTO, C. OECD •D. EFTA, E. ASEAN, F. APEC •G. CEFTA, H. NAFTA, I. MERCOSUR •J. Paris Club, K. London Club •L. G7, M. OSN, N. League of Nations •O. other organizations • • • • Two groupes of themes: The First Republic of Czechoslovakia • > A. The First Republic of Czechoslovakia •Foundation: •28.10.1918 •from Austro-Hungarian empire: •21% of the theritory •25% of the population •60% of the industry •27% of the agriculture Problems after WWI •after-war problems – war economy ¨need of new infrastructure – to replace Wien ¨need of an unificated legal system ¨ò production during the WWI ¨disruption of economic relations ¤destruction of the previous tariff union ¤problems with IM (natural resources) and EX (light industry) ¨to protect boundaries + to create single tariff union with own currency ¤X inflation ¨differences among the 3 parts – decreasing level of development from W to E ¨tense social atmosphere Economic policy •monetary reform - A. Rašín •deflationary policy ð stable (ñ) currency •1919 - 1921 replacement of the war economy ð return to market economy •nostrification (1919) •obligation of enterprises operating in Czechoslovakia to move company headquarters to the country •social policy •laws in favour of the labour force (to improve their situation) •unemployment benefits provided by the state •land reform •effort to ò differences among the parts •foreign trade policy •strong protection after the consitution ð later ò repeated ñtariffs ð since1924 ò protection • Economic development •integration into WEð cycles BUT slight delay •ð 1st crisis peaked in 1922 •role of the Rašín´s deflationary policy •since 1924 considerable econ. growth ð Czechoslovakia as leading economy in the region •1929 crown anchored to gold •peak in 1929 Economic development after 1929 •Great Depression later than elsewhere •long-term impact – up to 1936 •+ very deep •dependency on EX •long adherence to the gold standard •ð Czechoslovakia one of the most affected economies •government´s reaction ñ state interventions: •support of EX •evaluation of the crown •protectionary measures (mainly agriculture ð tariff war with Hungary) •forced cartelization (in certain sectors) • ñ military expenditures •short-term recovery followed by an other crisis in 1937 •in 1937 economic performance lower than before the crisis •regarding both GDP and foreign trade • Evaluation •before the Great Depression – improving position and econ. growth •Great Depression – serious problems •GDP p.c. - Czechoslovakia 14th in Europe •developed industry (production of weapons) •dependency on EX •high quality of education system •political stability •considerable inflow of foreign INV Protectorate of Bohemia nad Moravia • > B. Protectorate of Bohemia and Moravia •30.9. 1938 Munich Dictate •15.3. 1939 Protectorate of Bohemia and Moravia •since spring1939 shift to war econonmy •inclusion into the Large-area economy (Grossraumwirtschaft) •after the assassination of Heydrich (1942) •dissolution of the Czech government •tightening of the German control •ñ military production Economic policy •centrally planned economy •in most cases private firms BUT with limited ownership rights •since 1939 •fix prices + direct determination of wages •general obligation to work •rationing •ð black market •during the war ò quality and quantity •direct control over agriculture and foreign trade Economic results •exploitation of the czech economy •considerable capital transfers to Germany •aryanization of the Jewish property •confiscation of land •forced labour in Germany •ñ share in the economy of the Third Reich •ñ prices •ñ unemployment BUT ò labour productivity •ò agricultural production •-> human and material losses Czechoslovakia after WWII • > C. Czechoslovakia after WWII - situation •leftward shift in politics è communists •Kosice government programme - April 1945 •elections in 1946 – victory of the Communist Party (in Czech lands) •expulsion of the Germans •under the control of the USSR (economically and politically) •Marshall Plan First EP measures •A. property confiscation of traitors •B. nationalization •key industry – Presidential Decrees in October 1945 •also economic reasons •C. land reform (1st round) •D. monetary reform (1945) •E. two-year plan (1947-8) •objective - economic reconstruction Political development •coup d'état of 1948 („Victorious February“) è very harsh regime •releasing •after 1953 - V Stalin and Gottwald •after 1956 denunciation of cult of personality EP measures – 1st five-year plan (1949 - 53) •A. centrally planned economy+ planning •B. full nationalization •in Czechoslovakia - liquidation of the self-employed (even small) •C. land reformð collectivization •D. reorietation of foreign trade •retreat of Czechoslovakia from demanding western markets •ò domestic competition • LR supply of food and natural resources from USSR •E. Political situation ð heavy industry + arms productionð ignoring other sectors Good/Service and its quality Unit Price (KČS in current prices) 1953 1960 1963 1965 1968 1970 1973 1975 1978 1980 1982 1984 1987 1988 rye-wheat bread kg 2,8 2,6 2,6 2,6 2,6 2,6 2,6 4,4 4,4 4,4 4,4 4,4 4,4 4,4 rice (I. class) kg 28,0 5,0 5,0 5,0 5,0 5,0 5,0 5,0 5,0 5,0 10,0 10,0 10,0 10,0 potatoes (I. class) kg 0,6 0,6 0,7 0,7 0,7 0,7 0,7 0,8 1,4 1,6 1,6 1,6 1,6 1,6 butter (I. class) kg 44,0 38,0 38,0 38,0 40,0 40,0 40,0 40,0 40,0 40,0 40,0 40,0 40,0 40,0 oil kg 34,0 25,4 25,4 25,4 25,4 25,4 25,4 25,4 25,4 25,4 25,4 25,4 25,4 25,4 sugar cubes kg 14,0 9,0 9,0 9,0 8,0 8,0 8,0 8,0 8,0 8,0 8,0 8,0 8,0 8,0 white vine l 26,0 19,0 19,0 17,0 17,0 17,0 17,0 17,0 17,0 24,0 28,0 24,0 28,0 28,0 flavoured ethanol "rum" (40 %) l 68,0 80,0 80,0 65,0 65,0 65,0 65,0 65,0 65,0 83,0 100,0 100,0 100,0 100,0 pit coal 100 kg 22,4 22,4 22,4 22,4 26,2 26,3 26,2 18,6 25,9 25,9 25,9 25,9 25,9 25,9 men's socks pair 8,8 4,5 4,5 4,5 4,7 7,0 6,8 6,7 11,7 12,8 13,7 14,4 14,0 14,0 rent (2 rooms, without heating) monthly 75,0 75,0 75,0 106,0 106,0 106,0 106,0 106,0 121,0 121,0 121,0 121,0 121,0 121,0 electricity kWh 0,8 0,7 0,7 0,7 0,7 0,7 0,7 0,7 0,7 1,1 1,1 1,1 1,1 1,1 cutting hair service 2,0 2,0 2,0 2,5 3,1 5,1 5,0 5,0 5,0 5,0 5,0 7,0 7,0 7,0 •Retail prices of selected goods and services Territorial structure of foreign trade in 1948–1960 [%] Year RTE CPE 1948 60.3 39.7 1950 44.4 55.6 1960 28.2 71.8 Indicator 1948 1950 1955 1960 1970 National income 60 78.9 92 98.5 99.96 Elementary means of production 70 96.5 97.4 99 Gross industrial production 70 96.1 99.5 100 100 Gross agricultural production 17 47 90.5 95.1 Retail turnover 31 91.7 99.8 99.98 100 Selected indicators – economy and trade Selected economic indicators for the socialist sector (including private farming), 1948-1970 (%) Results •inflation ð monetary reform 1.6. 1953 • huge depreciation of the deposits ð disturbances in Plzeň • BUT at the same time end of the rationing •1950 - 1955 considerable econ ñ BUT extensive •similarly •1954 a 1955 one-year consolidation plans •1956 – 1960 2nd five-year plan •ð end of the 1950s – 1st attempt to make a reform •Rozsypal Reform Net material product, 1951-1990 (%) D. Czechoslovak Socialist Republic •1960 new constitution ð • Czechoslovak Socialist Republic •3rd five-year plan (1960 - 1965) •unrealistic goals •stagnation •ð reaction: •reforms from the late 1950s abandoned •five-year plans substituted by operative one-year plans Economic reform ¨in mid-1960s political melting ð also economic reform ¨Ota Šik •ð 4th five-year plan (1966 - 1970) ¤attempt to ñ involvement of economic subjects ¤partial implementation of market mechanism ¨BUT August 1968 ocupation – „allied armies“ ð administrative methods of management ¨so-called „Lessons from emergency development“ - stabilization program + normalization 5th five-year plan (1970-75) •up to mid-1970s strong econ. ñ •econ. ñ > than in western countries •BUT problems with: • shift from extensive to intensive ñ • fulfilment of scientific and technical objectives •also due to COCOM •isolation ð crisis not so rapid in Czechoslovakia • BUT ñ import prices > export prices ð worsening TofT ð balance of trade deficit 6th and 7th five-year plans •6th five-year plan (1976-1980) ¨ò economic performance ¤ò rise of national income ¤ ð other attempt for reform - failure ¨structure of GDP in 1980 ¤ I = 63% - S = 30% - A= 7% • •7th five-year plan (1981 - 1985) ¨stagnation – average GDP growth 1,7% ¨ long-term deterioration of TofT ¨mainly with USSR Social product of Czechoslovakia (annual change, %) > GDP/person ČSR a Austria 1950-1989 > Changes •mid-1980s – easing in USSR •ð changes (unwillingly) also in the Czechoslovak Socialist Republic •1986 - 87 – program of reforms •the main part should be realised after 1990 •1989 ... Evaluation ¨political collaps also due to economic reasons: ¤ò rise of GDP nexhaustion of extensive growth – ecology ncentrally planned economy nno private initiative and competition nnon-functioning price mechanism nimpossible to compete with market mechanism in a •long run •emphasis on (heavy) industry X services •insufficient integration to WE + orientation to Eastern markets Lagging behind the developed countries Territorial structure of foreign trade Country / Group of countries 1970 1980 1988 CPE 53,5 53,3 64 COMECON 46,2 47 57,8 USSR 23,3 25,8 32,3 Developed market economies 34,7 35,8 29,1 Developing countries 11,8 10,9 6,9 Total 100 100 100 Content •I. Czechoslovakia •The First Republic of Czechoslovakia •Protectorate of Bohemia and Moravia •Czechoslovakia after WWII •Czechoslovak Socialist Republic • •II. International organizations •A. GATT, B. WTO, C. OECD •D. EFTA, E. ASEAN, F. APEC •G. CEFTA, H. NAFTA, I. MERCOSUR •J. Paris Club, K. London Club •L. G7, M. OSN, N. League of Nations •O. other organizations • • • • Two groupes of themes: GATT and WTO • > A. GATT •Lessons from inter-war development Interanational trade -> GATT intention to create the International Trade Organization BUT ... GATT – 50 years „temporary substitute“ In general •GATT = General Agreement on Tariffs and Trade ð NOT an organization! = no membership •conference in Geneva (1947) • agreement came into force 1.1.1948 • 23 countries = „contracting parties“ • 80% of the world trade •objectives: •liberalization of the world trade •against discrimination in the international trade Principles •no discrimination •same tariff ò for all contracting parties •exceptions •tariff unions, FTA, … •measures in the case of problems with BofP •X non-tariff obstacles (quotas) •protection only through tariffs •exceptions – agriculture, BofP •solving problems among contracting parties Development •in jumps – b/c conferences •negotiation rounds since the 5th conference • • •Overview of the GATT conferences and negotiation rounds Year Venue Subject Number of participants 1947 Geneva tariffs 23 1949 Annecy (France) tariffs 13 1951 Torquay (Great .Britain) tariffs 38 1956 Geneva tariffs 26 1960-61 Dillon Round (Geneva) tariffs 26 1964-67 Kennedy Round (Geneva) tariffs and antidumping measures 62 1973-79 Tokyo Round (Geneva) tariffs, non-tariff measures a general agreements 102 1986-93 Uruguay Round (Geneva) tariffs, non-tariff measures, rules, services, rights to intellectual property, settlement of disputes, agriculture, foundation of the WTO 123 1st – 5th conferences •1st conference successful •in Annecy and in Torquay only limited progress •problems: • unwillingness to decrease protection • only the least needed products • countries with relatively law tariff had little to offer in exchange • one of the reasons in favour of EEC (1958) •suggestions to deal with the situation BUT conference in Geneva and Dillon round as before è limited results had little to offer in exchange.[1] Kennedy and Tokyo rounds had little to offer in exchange.[1] •Kennedy (6th) round (1964 –7) •breakthrough – Kennedy´s proposal to abandon the system of individual commodities tariff reduction and reduce tariffs in a blanket manner •success in industry X min. progress in agriculture •Antidumping Codex •application in 5 years (1972) • •Tokyo (7th) round 1973 - 79 •industrial production successful BUT é tariffs in agriculture (CAP) •non-tariff obstacles included BUT with only limited progress •application in 8 years Uruguay (8th) round •the last round (1986 - 1993) •difficult, long and uncertain negotiations •„Nothing is agreed until everything is agreed“ •results - závěrečný akt: • creation of WTO • New General Agreement on Tariffs and Trade • + agreements on: •agriculture •implementation of anti-dumping tariffs •trade with services •copyrights •dispute settling Evaluation •50 years of GATT - successful •tariff reduction •introduction of rules (e.g. Antidumping Codex) enormous é world trade BUT longer and more difficult negotiations WTO = permanent negotiations B. World Trade Organization •foundation – 1.1.1995 •initiators EU and Canada •headquarter in Geneva •member states – 90% of the world trade •China •list of all members and observers: •https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htmobservers •the biggest success •liberalization of the telecom market •dispute settling •the latest round of negotiations about liberalization – Doha (Qatar) 2001 •also liberalization of agriculture Differences between GATT and WTO •GATT only temporary solution •GATT set of rules X WTO permanent institution •GATT only trade with goods X WTO also services and intellectual property rights •GATT multilateral agreement BUT only contracting parties involved X WTO principle of single undertaking •membership = acceptance of all obligations from The agreement establishingWTO •faster system of dispute settlement FACTS ABOUT OTHER IO • > C. OECD – The Organisation for Economic Co-operation and Development •successor of OEEC •oficial foundation – 30.9. 1961 •headquarter in Paris •membership – the most developed countries in the world •the Czech Republic since 1995 •35 member states (the last ones Chile, Estonia, Israel and Slovenia in 2010) •publications •prognoses (general and sectoral) •support of liberalisation of international movement of goods, services and capital + X money laundering •ð no rights to impose decisions D. EFTA - European Free Trade Association •foundation in 1958 –alternative trade bloc to EEC •founding countries – DK, SE, NO, PT, AT, GB •1966 FTA •1977 FTA with EC •1992 EEA (European Economic Area) • free movement of non-agricultural goods, services, capital and labour •nowadays: Island, Lichtenstein, Norway, Switzerland E. ASEAN - Association of Southeast Asian Nations •headquarter in Jakarta (Indonesia) •main objectives: •acceleration of economic development •economic, social and cultural cooperation •FTA up to 2002 •founding countries - Philippines, Indonesia, Malaysia, Singapore, Thailand •1984 Brunei •1997 Myanmar, Vietnam and Laos •1998 Cambodia •ð big differences among the countries F. APEC - Asia-Pacific Economic Cooperation •foundation in 1989 •21 member states: among others Australia, Chile, China, Japan, USA, Russia + Asian Tigers and ASEAN member countries •enormous economic power •objective: •to create FTA G. CEFTA - Central European Free Trade Agreement •established in XII/1992 è in force since 1.3.1993 •founding countries: CR, SR, HU, PL •the main objective: •elimination of tariffs and quantitative barriers •for industrial products up to 2001 or 2002 •in agriculture – permanent problems •enlargement: •1.1. 1996 Slovenia •1. 6. 1997 Romania •1. 7. 1998 Bulgaria •accession to EU è termination of the membership! •current member states from the Balkan H. NAFTA- North American Free Trade Area •1989 – FTA between USA and Canada •1991 accession of Mexico •necessity of ratification è in force since 1.1.1994 •within 15 years total tariff elimination •small effects on the US economy I. MERCOSUR - Southern Common Market •foundation in 1991 •member states - Argentina, Brazil, Paraguay, Uruguay, Venezuela + Bolivia (Chile, Equador, Peru, Colombia, Guayana, Surinam associate members) •objective: •Gradual creation of tariff union •X WB ... tariffs •sucessful è ñ mutual trade •BUT… J. Paris Club ¨agreements of creditors with indebted countries ¨foundation in 1956 (reason: Argentina) ¨creditors = governments ¨secretariat - FR ¨objective: ¨to find solutions to insolvency of indebted countries + agreement on the repayments ¨ principles: ¤equal preferences of all creditors ¤request of agreement between the debtor country K. London Club •solving problems with loans of private creditors •since 1980s •informal group ð no secretariat •first meeting in London, later various places •ad-hoc commissions for each country •ð to discuss conditions which should be presented to debtors L. G7 •the most developed countries in the world •USA, JP, GB, FR, DE, IT, CA •main emphasis on: •economic policy + international trade + relations with DC •since 1975 yearly meetings •since 1994 – G7 + Russia = P8 ("Political 8") •1998 ð Russia became member = G8 •BUT G7 parallel existence • G10 = G7 + Sweden, Belgium, the Netherlands • G20 M. United Nations •ILO – International Labor Organization •social fairness for employees in the world •labour standards • •UNDP – United Nations Development Programme •Coordination of development activities •emphasis on the poorest countries – better living standards, more efficient use of resources, higher productivity, … •HDI • •UNCTAD - United Nations Conference on Trade and Development •support of international trade - mainly DC N. Commonwealth of Nations •before 1931 British Empire •up to 1947 British Commonwealth •head - British monarch •Free association of countries – GB + its former colonies and dominions •e.g. Cyprus, Malta, Kenya, Nigeria, Zambia, Jamaica, Canada, NZ, … •in total 53 countries O. Other organizations •FTAA - Free Trade Area of Americas •project - FTA over the whole American continent • •AFTA - Arab Free Trade Area •1998 •elimination of all tariff barriers up to 2008 •relatively small market ð small economies of scale … • •MAGREB •1964 •Algeria, Libya, Mauretania, Morocco, Tunis Thanks for your attention!