Economic policy

Poland became a founder member of the World Trade Organization (WTO) on July 1st, 1995, above all due to the systemic reforms undertaken in the country at the late 1980s end early 1990s, thanks to which Poland became a free-market economy. Compared to other WTO members Poland found itself in a special situation. Within a short space of time it had to change its entire customs tariff system and take on board international rules in this area that stipulated that customs tariffs could not be imposed on partners’ goods without some form of compensation or reciprocation.

On September 10th to 14th, 2003 the Fifth WTO Ministerial Conference took place in Cancun in the framework of the new round, the Doha Development Round. Poland is interested in a conclusion to the round that brings the most benefits to all participants in terms of their participation in the global economy. The new Round should make market access and promoting the business of all participants easier by ensuring general equality of rights and obligations and making easier further integration between the Polish and global economies.

The Europe Agreement Establishing an Association Between the European Communities and the Republic of Poland (Europe Treaty) significantly widened the bases of earlier trade agreements, trade and economic co-operation (signed in 1988 between the then Polish Peoples Republic and the then EEC). The Treaty established the foundations on which economic, political, scientific and cultural links between Poland and the EU could be developed.

From Poland’s point of view the Treaty, above all:

• Facilitated a rise in trade turnover and in turn accelerated economic restructuring

• Increased the stability of economic rules, amongst other things by incorporation of EU regulations

• Increased Poland’s attractiveness for foreign investors

• Ensured the political security of the country in conditions of an uncertain internal situation, that is in the case of failure to implement deep-rooted economic and political reforms

• Guaranteed internal peace (in a situation of a weakening and then collapsing USSR and COMECON).

The terms of the Treaty covered many areas. After political dialogue, it regulated questions of trade and foretold the establishment of a free trade area for industrial goods. It also took into consideration the flow of services, labour and capital and the setting up of enterprises. It included stipulations bringing competition rules closer together and harmonising legal regulations. The Treaty also covered wide-ranging economic, financial and already mentioned cultural co-operation.

In 2001, after nine years in which the trade sections of the Europe Treaty had been in place, almost two thirds of Poland’s foreign trade was with the 15 EU member states. As over the whole decade, in 2001 exports to the EU (69%) were higher than imports (61.3%). Alongside the rise in the share of the EU in Polish trade, was a substantial rise in Poland’s significance for EU trade. In 2001, Poland stood in ninth place as a supplier to the EU market and in fourth spot as a purchaser.

Enterprises with foreign capital engagement have had a significant impact in terms of increasing trade with the EU. The overwhelming majority of foreign capital interested in Poland has come from the EU.

In accordance with the Europe Treaty, Poland lifted import duty as early as 1992 on mineral, chemical industry, wood and base metal products. In 1999, the customs rate on personal and used cars was reduced to 15%. The complete lifting of customs duties came into effect on January 1st 2002. On other industrial goods Poland gradually lifted duty rates in five separate trenches from 1995 onwards.

An agreement was signed on support for restructuring of the Polish fuels sector, on the basis of which Poland from a low in 1997 raised the limits on the quantity of imported fuel products and liberalised the price of fuel on the domestic market. The customs duties on diesel and petrol were completely lifted on January 1st 2001.

The timetable for the reduction of customs duties is formally in line with the Europe Treaty, although it has undergone continuous consultation with the European Commission and member states.

The main aim of the Central European Free Trade Agreement (CEFTA) is the establishment after January 1st 2001 of a free trade area between the Czech Republic, Poland, Slovakia, Hungary, Slovenia, Bulgaria and Rumania, in accordance with Article XXIV of GATT. Decisions on realising this goal were related to the removal of tariff and non-tariff trade barriers, as well as agreement on the free flow of goods: public procurement, state assistance, protection of intellectual property, rules of competition, state monopolies etc. The CEFTA agreement does not foresee a complete lifting of barriers in the trade of agricultural products. The liberalisation of duties on industrial products has been conducted at varying speeds, each depending on a matching of goods to the lists. It is important to stress that after January 1st 1997, as a result of further gradual reductions, duty on industrial goods was only several percent of the position of tariffs (for example, with the Czech Republic and Slovakia for about 30 positions on each side). This fact indicates that the CEFTA agreement has temporarily overtaken (by two years) the timetable for reducing duties in the association agreement of the states of the Visegrád Group with the European Community.

Since November 1996 Poland has been a formal member of the Organisation of Economic Cooperation and Development (OECD). Market reforms - undertaken in accordance with OECD requirements in the areas of law and administration - are one of the most fundamental changes. In joining the OECD, Poland accepted all the legal instruments of the organisation, including the ‘Code on the liberalisation of capital flows’ and the ‘Code on current invisible transactions.’ The obligations accepted by Poland on joining the OECD and in the process of EU accession have had a positive influence on adapting domestic law to international law. With the aim of fulfilling international obligations in the area of liberalisation Poland has introduced a range of new laws, including in the area of foreign investment, capital flows and invisible transactions as well as starting up economic activity.

Poland’s membership in this prestigious club of the most developed economies of the world is concrete evidence of the economic and political stability of the country and recognition by other states of the progress made in the reform process. It also improves the vision of Poland in the eyes of foreign partners, including investors – Poland is seen as a partner in a dynamically developing economy with stable legal rules. This has a direct impact on the rise in the quantity and range of foreign investment in Poland. OECD membership makes for easier access to preferential credit lines from international financial institutions and benefiting from the OECD’s analytical potential. Added to this, OECD membership means Poland can co-determine issues related to the liberalisation of global trade, and influence the shaping of the OECD’s new identity.

As EU accession approaches, Poland’s presence in the OECD is the best proof that Poland is fully equipped to adapt to international regulations, a key foundation in relations between EU member states. There is a strong link between Poland’s aspirations to join the EU and participation in the OECD, as all EU member states are also members of the organisation. In addition, participation in the work of the OECD provides the chance to increase the qualifications of personnel and those training them to work in the future structures of the EU.

Poland is also striving to become a member of the International Energy Agency and Nuclear Energy Agency – affiliated bodies of the OECD – and to get observer status on the Development Assistance Committee. Poland is also taking part in new initiatives such as the ‘Growth Project,’ which deals with analysing the causes of differential rates of growth in OECD countries, ‘Recommendations’ dealing with combating money laundering, and the so-called ‘Health Project,’ which handles health care in member states.

source: www.poland.gov.pl