The Start of Trade Alliance
Slovakia is a small country located at the east-central portion of Europe. It is squeezed in between by other countries namely Austria, Ukraine, Hungary, Poland and the Czech Republic. Most of its land is occupied by the Carpathian Mountains in the west while the lowlands of the south are on fertile grounds. Major cities like Bratislava and Košice are contributory to its economy.
Prime industries include metallurgical plants, chemical factories, and hydroelectric power stations. Aside from these businesses, iron-ore production is also vital. Different crops are grown depending on the site where wheat, vegetables, fruits, sugar beets and corn are found in the south while higher regions grow oats, flax, potatoes and rye. In order to balance its growing economy, livestock raising, dairying and forestry are essential as well. Natural products come from antimony, iron, mercury, zinc, lead, copper, limestone and lignite.
The Slovak Republic was founded in 1993 after its dispersal from Czechoslovakia. With its independence, there was quite a struggle to transform its economy from the formerly central to a modern-day status. There was slowed growth especially during Prime Minister Meciar's term from 1994 to 1998. Although the basics of economy were seen to be developing, capitalism and unacceptable fiscal laws hampered everything. Large amounts of debt and trade deficits were seemingly unrepaired. Corruption added up to the worst scenario especially for a nation who was just starting in the world economy.
Under Prime Minister Dzurinda's reign, however, every aspect of the economy was transformed. Tax systems and labor laws were simplified. Pension systems were even introduced while focusing on other aspects such as privatization. The strongest growth was recorded in 2006 at 8.3% and continued in 2007 at 10.4%. This marked the beginning of a better stature in global business.
The division of Czechoslovakia into two republics renewed US's cooperation with Slovakia. The reformist government which was seen to be favorable for the Westerns further strengthened the bonds between the two. In fact, the US invested around $200 million for the democracy and market share of Slovakia. Aside from economic trade, their ties prospered in terms of military alliance as well as law enforcement.
Major Exports and Imports Between the Two Nations
The US is considered to be the 9th largest investor in Slovakia where Germany was seen to be at the lead. The trade relations between these two countries were evidenced by a lot of significant numbers which have grown through the years. Even at the start of Slovakia's independence, the US never hesitated to form part of its flourishing trade.
For the period ending August 2008, exports from US to Slovakia amounted to $313.4 million while imports of the former from the latter were tracked at $929.6 million. With these details, the year 2007 has its own share of statistics from the US Census Bureau. The following relevant data were gathered by the said agency:
Treaties between the US and Slovakia
- Slovak Exports to US. For 2007, several products were transported from Slovakia to US. Along this line, $996.57 million of the $1.56 billion total sales went to new and used passenger cars. This comprised 63.88% of the entire amount. Other products on the list were: other industrial machinery; industrial engines, pumps, compressors and generators; computer accessories, peripherals and parts; footwear of leather, rubber and other materials; furniture, household items and baskets; shingles, molding and wallboard; electric apparatus and parts; other parts and accessories; and household and kitchen appliances. The last products were sold at a total of $21.07 million which is equivalent to 1.39% of 2007's total.
- Slovak Imports from the US. Compared to exports, Slovak imports for 2007 amounted to only $680.04 million. With this total, $431.90 million or 63.51% were from the sales of civilian aircraft. Joining this item were: metallurgical grade coal; electric apparatus; minimum value shipments; passenger cars, new and used; other parts and accessories of vehicles; manmade cloth; agricultural machinery and equipment; other industrial machines; and copper. Copper gained a total income of $9.32 million which is equivalent to 1.37% of the year's total sales.
- Fastest-Growing US Exports to Slovakia. Goods from US entering the territorial jurisdiction of Slovakia were seen to be gaining cognizance for themselves. High sales marks were seen and as proof to this, furniture and household goods topped the list at $587 thousand or 1505% increase from 2006. Other notable goods were: fruits and frozen juices; agricultural industry -unmanufactured; food, tobacco machinery; and primary synthetic rubber. Primary synthetic rubber was sold at a total of $79 thousand. This was 718% higher than the total for 2006.
- Fastest-Growing US Imports from Slovakia. Slovakia may have transported their best products to US. With this in mind, some were seen to have elevated their status in terms of high-ranking imports entering US. Fertilizers, pesticides and insecticides gained an income amounting to $127 thousand which is outstanding at an increase of 6,350% from 2006. Joining these items were: television, receivers, VCRs and other video equipment; semiconductors and related devices; food and tobacco processing machinery; and computers. Computers were sold for a total of $665 thousand in 2007 or at an increased rate of 504% from 2006.
With its strong support for the independence of Slovakia, US found it necessary to formulate trade agreements that will benefit their said ally. These pacts were seen in several forms which were defined to be manifestations of the US's exact intention of having economic relations with Slovakia. Some of the most important treaties they have engaged in are:
Conflicts Affecting Trade
- Slovakia Bilateral Investment Treaty. This was related to the bilateral investment treaty signed between the US and the Czech Republic. It was signed in October 22, 1991 and was entered into force in December 19, 1992. It was however, amended in May 1, 2004 in consonance with European Union laws. It was further enhanced to avoid conflicts. Just like any other treaty of this nature, this was signed to further encourage and protect investment of both parties. This was also an effort to unify US's alliance with the rest of the European nations. Specifically, it focused on international investment including the fair and just expropriation of funds.
- Enlargement Compensation Agreement. This was seen to be an expansion of US's trade agreement with the European Union which had formerly focused on 15 members. In 2004, it was increased to 10 more with Slovakia, Estonia, Latvia, Czech Republic, Poland, Lithuania, Hungary, Slovenia, Cyprus and Malta added in the list. In this agreement, the EU opened a specific tariff quota for US exports on poultry, boneless ham and corn gluten. Global tariff rates were imposed on food preparations, fructose, pork, wheat, barley, cheeses and vegetables. Despite these increases, decreases were encouraged on protein concentrates, fish, chemicals and aluminum tubes.
With their military alliance, some aspects affected not exactly the relationship between the US and Slovakia but that of the latter's relation with other countries. The arms trade specifically affected Africa with its civilians as the common recipients of the negative attacks. These things lead to conclusion that Slovakia was backed up by the US government on this matter. Without truth to this, the US's stand was somehow faltered as well.
In 2000, Slovakia had to prove its sincerity of joining the NATO. In May 10 of the same year, it had to take apart the six-month old missile system that it had built. In fact, the US contributed to this aim by financially supporting Slovakia. Furthermore, it had to convince its population as well as other NATO alliances by putting up a persistent drive to join the community. The process may have taken long but the conflict was resolved.
The Future that Lies Ahead
In its attempt to form alliance with the US and other nations, Slovakia has to prove that the present and future governments of the country will be of total commitment to the NATO friendship. Several meetings and conferences were conducted to stabilize its membership with the union. To these days, it had struggled to put aside the negative image it had projected from investors because of the several wars they have instituted. It had even obtained for itself the trust that was never given to it by the rest of the nations comprising international business.
Slovakia's independence may have resulted from the wars it had with the Czech Republic. With this fact, however, it found comradeship in the US. The different rulers it had may have hampered economic growth but with the help of the US, the struggle to gain a good impression in terms of world trade was at hand. Up to now, the US and Slovakia are enjoying the friendship that blossomed through time. The rifts may have weakened the positioning of their alliance but in the end, all's well that ends well. The future may definitely gain from the support of the US and the genuine efforts of Slovakia to embrace change.
US-Slovakia Trade References