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Foreign trade commodity structure

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The present foreign trade commodity structure corresponds fully to that of a developed economy, with the greatest share of exports represented by machinery and transport equipment, followed by other commodities and industrial products.

photo: (sxc.hu)

Specifically, we need to mention cars that are manufactured by Škoda Auto, a.s. in Mladá Boleslav, which is by far the biggest exporter in the Czech Republic. Other major exporters include the tire manufacturer Barum Continental, the Siemens Group and others. The reasons for success in exports have sometimes been reduced merely to lower Czech product prices resulting from lower labor costs. However, as wage levels in the Czech Republic and other EU countries gradually balance out, this factor plays an ever smaller role. It is important to realize that if Czech products were not of sufficient quality, they would have never succeeded in such demanding markets. The problem is rather the perception of their quality; Czech goods were at some stage and for no particular reason perceived as low-quality products inferior to those manufactured in the euro zone. Winning consumer trust is in this case a long-term task, and the accession of the Czech Republic to the EU could significantly help Czech producers improve their position on global markets. The following table shows the top exporters, including the value of products exported. The value of exports generated by Škoda Auto exceeds that of any other Czech corporation nearly tenfold.

Yet it is no surprise that the positions of the food, paper and textile industries have been declining. The added value in these industries is not that high, and producers have a hard time competing in terms of production costs with their competitors based in East Asia (textiles, paper), or producers from regions with better climatic conditions (food products).

The government is aware of the great importance of exports, and in 1997 it founded CzechTrade, a national export promotion agency at the Ministry of Industry and Trade of the Czech Republic. Its mission is to increase the exports and competitiveness of Czech companies on foreign markets using a broad range of services and information. The agency offers its customers individual services in the search for suitable export territories, and assists in addressing the relevant partners. It maintains a database of current business opportunities and a public procurement database. The agency also organizes specialized training programs pertaining to international trade.

Apart from machines and transport equipment, the main imported commodities include oil, natural gas and food products. From the strategic point of view, it is important for the Czech Republic that it is no longer fully dependent on importing oil and natural gas from Russia. The country has completed an oil pipeline from Ingolstadt, Germany, and has access to oil transported from Norwegian oil fields in the North Sea.