Statement by Press Secretary Fitzwater on the Czechoslovakia-United States Trade Agreement

The United States and Czechoslovakia today exchanged diplomatic notes bringing into force the trade agreement signed by the two Governments last April. The agreement extends most-favored-nation (MFN) tariff treatment to Czechoslovak exports to the United States and U.S. exports to Czechoslovakia. President Bush expressed his hope that the mutual extension of MFN tariff treatment will "provide the impetus for greatly expanded trade between our two countries and the first step toward a normalization of our bilateral trade relations." The exchange follows approval of the agreement on November 16, 1990, by the Czechoslovak Federal Assembly. The U.S. Congress approved the extension of MFN on October 23.

The agreement, along with its side letters on trade and financial matters, intellectual property, and tourism, contains important guarantees for American businesses, including the right to nondiscrimination in renting office space, paying for local goods, and establishing bank accounts. Through this agreement, the Czechoslovak Government has also committed to upgrade substantially its protection of intellectual property rights, bringing its intellectual property regime to a level on a par with that of other industrialized nations.

The implementation of this agreement coincides with the next phase of Czechoslovakia's concerted efforts at market reform and trade liberalization. The Government of Czechoslovakia has announced plans to activate a number of important reform measures in January 1991, including price liberalization through the delinking of retail and wholesale prices, internal currency convertibility, and the privatization of large state enterprises through the establishment of joint ventures with foreign entities.

President Bush praised Czechoslovakia's reform efforts as "impressive initiatives, heralding a new age in Czechoslovakia's relations with the international trading system." The President also expressed his hope that Czechoslovakia's reforms would continue to move the country towards full trade liberalization.

Combined with the current and planned reforms in Czechoslovakia, the extension of MFN should result in the threefold increase in bilateral trade over the next few years, setting the stage for a strong trade relationship between our two countries.