Since joining the European Union on 1 May 2004, the Czech Republic has witnessed a consistently positive trade balance with member states. In the last 20 years, in fact, the trade surplus with these countries has quadrupled from 214.2 billion crowns in 2004 to 866.3 billion crowns in 2023.
Positive and negative aspects of the EU
According to Chamber of Commerce spokesman Miroslav Diro, for companies the existence of a single market is the biggest benefit of EU membership. 85% of Czech exports go to Member States, significantly impacting the national economy. In fact, they influence 80% of the country’s Gross Domestic Product. A further positive aspect noted are the EU subsidies aimed at equalising the playing field for companies operating in the single market. This approach aims to prevent inequalities between member countries or favouritism towards domestic companies at the expense of foreign ones.
However, EU membership also brings disadvantages. Although some argue that European subsidies have fostered greater convergence between countries, there are differing opinions as to their actual effectiveness. Another mostly perceived negative aspect is bureaucracy, especially for cross-border companies. The European Commission is working to mitigate these obstacles by proposing initiatives to reduce red tape and financial burdens and increase business transparency.
Positive trade balance
As stated above, the benefits of single market membership outweigh the negatives. Over the past 20 years, Member States have been the Czech Republic’s main trading partners, leading to a doubling of imports and exports in absolute terms. Indeed, according to Miluše Kavěnová, director of the CZSO’s Department of Foreign Trade Statistics, ‘Currently, 80% of the Czech Republic’s total exports go to EU countries, while 62% of total imports come from EU countries’.
The largest trading partner is Germany, which in 2023 accounted for 30% of total exports and 23% of total imports. The Czech Republic’s trade surplus with Germany reached 353.3 billion crowns. Following this, other important partners are: Slovakia, Poland, France and Italy.
According to the CZSO, the largest share of the Czech Republic’s foreign trade is determined by motor vehicles and their parts, machinery and equipment, computers and optical instruments, metalworking products, chemicals and foodstuffs. In 2023, in fact, the country exported electric microscopes to the EU to the value of 20.8 billion crowns, or 45% of the total exports of the product itself. Other sectors in which it holds a significant share of exports are poppy (44%), farmed parrots (37%) and live carp, where it holds a dominant position of 72% of all EU exports.
In 2023, foreign trade recorded a surplus of 124.9 billion crowns, marking an improvement on the previous year, thanks to the reduction of oil and gas imports. Although the surplus in January this year was lower than in the same period last year, the figures still show a positive balance of 3.7 billion crowns. All this underlines, not only the integration of the Czech Republic within Europe, but also its ability to effectively exploit the opportunities offered by the single market. This membership has thus provided a favourable environment for Czech foreign trade to flourish, highlighting the importance of open trade policies and collaboration for economic success in an increasingly interconnected world.
Sources: https://www.ceskenoviny.cz
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