BETWEEN VISEGRAD AND THE EC

The article discusses the various attempts at reviving the foreign tra de of the industrially most advanced former planned economies: Poland, Hungary and the Czech Republic. Despite their association agreements with the Common Market, the hopes for full membership status have fail ed to materialise. There is little scope for expanding the export of c ommodities where the countries have a comparative advantage due to the protective measures of the EC. Even in those commodities where there is an export potential, the countries lack the infrastructure to infor m their own producers of the swift changes in EC import regulations. T he fact that Western companies have far superior access to credit and banking facilities, put the East European enterprises at a considerabl e disadvantage in the competition for market shares. This may trigger isolationist and protective measures in the countries concerned and ha ve adverse effects on the reform process in the countries in particula r and European integration in general. The plans for a free trade zone between the countries under the auspices of the Visegrad initiative a re described. The lack of Political agreement and an institutional inf rastructure backing the plans will not result in a significant expansi on of East European trade. Rather this depends on changes within the e nterprises, increased wage cost will lead to producers looking for che aper inputs and thus a growth potential for East European trade will e merge.