According to a survey conducted by the Czech Chamber of Commerce among 387 domestic companies and presented at a specialised conference last week, 63.3% of Czech companies are involved in the EU single market. However, according to the evidence of the same survey, 29.8% of Czech companies encounter obstacles when trading on the European Union (EU) single market. The difficulties highlighted mainly relate to high administrative burdens, lengthy procedures, language barriers or non-unified regulations between markets.
European disharmony and structural obstacles
The president of the European Association of Chambers of Commerce and Industry Eurochambres, Vladimír Dlouhý, expressed his discontent with the disharmony of the European Union, stating that the market does not function as a cohesive entity, but rather as 27 separate markets. This fragmentation, evidenced by different rules, agreements, national bureaucracies and protectionist policies, imposes high costs, especially of an administrative nature, discouraging companies from exporting products and services to Europe.
Dlouhý calls for the removal of these barriers, emphasising that such a move would be great news for the Czech Republic and for general economic prosperity.
According to the Chamber of Commerce’s analysis, the challenges faced by Czech companies on the European market are diverse and complex. These include VAT inconsistency, discrimination of cryptocurrencies by some banks, difficulties in opening bank accounts abroad and problems in the recognition of professional qualifications at EU level.
In addition to these structural obstacles, entrepreneurs point to rigid regulations in the transport and food industry sectors, as well as an unbalanced state support system that fuels unequal competition between companies. These factors, as pointed out by entrepreneurs, contribute to widening an already existing gap in the European business landscape.
While waiting for positive changes from EU leaders, the Czech Republic navigates through complexities and challenges, seeking solutions to ensure a fairer and more efficient business environment.
Appeal of large companies, Pouza’s words
Representatives of some of the Czech market’s biggest players launched an appeal for the meeting with Enrico Letta, organised in the third week of January in Prague by the Chamber of Commerce and the Union of Industry and Transport. The main demand is for ‘regulatory detoxification’ and the reduction of administrative burdens.
Businesses demand the streamlining of ESG reporting and the harmonisation of European technical standards for testing and certification of industrial products in the European Union, as well as the resolution of the above-mentioned obstacles. Tomáš Prouza, Vice-President of the Chamber of Commerce and President of the Association of Trade and Tourism, joined the companies and affirmned: ‘We need the next European Commission to really function as the guardian of the treaties and fight hard against the protectionism of some Member States and the attempt to bend the agreed European rules. We have provided Mr Letta with a list of concrete negative experiences of Czech entrepreneurs who have obstructed free trade, and we will do everything to make sure that companies across Europe can catch their breath’.
Prouza highlighted the challenges in the transport sector, pointing out that the obligation to communicate exact quantities and shipper information 24 hours in advance is a typical example of artificial barriers that Member States use to hinder increased competition. He also emphasised the problems related to different product labelling and packaging rules in individual member states, which limit and make penetration into other markets more costly.
Export figures in the Czech Republic
The Czech Republic is positioned as a small, strongly export-oriented economy, with around one third of the total value of domestic production (33.7%) being exported to the European Union (EU) in 2022. This figure offers an interesting insight into the country’s trade dynamics.
To date, the EU is the Czech Republic’s main trading partner, with 81% of exports finding their way to European markets. However, an astonishing 1.8% of Czech companies are considering limiting their business activities in the EU, while a significant 8.8% aspire to expand their presence in this vital market.
The Chamber of Commerce’s analysis reveals that 87.1% of large Czech companies and 76.3% of medium-sized companies actively operate in the EU market. Small enterprises follow with 66%, while micro enterprises account for 49.7%. Interestingly, 35.4% of the companies surveyed offer their products and services online in the European market, reflecting the increasing digitisation of trade.
Sources: https://www.investicniweb.cz/, https://www.businessinfo.cz/
Image source: Getty Images/iStockphoto
Graphic source: https://storyset.com/
