CZECH AGRARIAN FOREIGN TRADE COMPARATIVE ADVANTAGES DISTRIBUTION: TRANSFORMATION PROCESS

Abstract

This paper primarily focuses on Czech agrarian foreign trade comparative advantage issues. The structure and comparative advantages distribution are analyzed in the period before (2001) and after the Czech EU accession (2015/2016). The main central aim of this paper is to identify and analyze changes in comparative advantages distribution and trade commodity structure which have occurred. Trade structure and comparative advantages distribution are analysed in relation to the EU and rest of the World (Developing countries, OECD members, CIS, etc.). Commodity structure (we applied HS system) is analysed specifically in relation to unit value development, trade volume development and comparative advantages distribution development. To successfully accomplish the above mentioned objectives, this paper applies Lafay index and Trade balance index. The results derived from individual analyses are highlighted through the “Product mapping method”. The product mapping matrix divides the entire set of exported products into 4 groups. The LFI index has been chosen for the “product mapping” approach because of its ability to take into consideration only those transactions which are truly related to individual countries’ trade performance. The TBI index has been utilized for its ability to divide the products according to their real trade performance into the above specified four quadrants. In the analysed period, Czech agrarian trade increased its dependency on EU Countries. The share of EU countries in regards to Czech agrarian trade turnover has increased from 78% to nearly 90%. Czech agrarian exports are dominated by low processed and semi-processed aggregations having a low unit value. On the other hand, imports can be characterized by a much higher unit value and a much higher processing level. Unfortunately, the unit value of Czech agrarian exports has been constantly decreasing on the other hand the unit value of imports is increasing. Czech trade comparative advantages exist in relation to the following set of products: HS10, HS12, HS01, HS04, HS15, HS24, HS22, HS11, HS17, HS03, HS16, HS09, HS13 and HS14.

Keywords: Czechia, agrarian trade, comparative advantages, distribution, changes, development, unit value, volume, value

Article DOI: http://doi.org/10.15544/RD.2017.150