Territorial Workshop USA: Mutual Economic Relations Prague, August 23, 2018

Bilateral Trade Overview

Bilateral Trade Overview – Commodities (2017) Export Import HS Item ths. USD 8411 Turbo-jets, turbo-propellers and other gas turbines 191 746 236 442 4011 New pneumatic tires, of rubber 169 454 8703 Motor cars and other motor vehicles principally designed for the trans 225 988 8708 Parts and accessories for tractors, motor vehicles for the transport o 154 673 8802 Powered aircraft "e.g. helicopters and aeroplanes"; spacecraft, incl. 223 390 8413 Pumps for liquids,w/n fitted with a measuring device; liquid elevators 154 653 3004 Medicaments of mxd/unmixed prods for therap/prophltc uses, in dosage 170 936 7304 Tubes, pipes and hollow profiles, seamless, or iron or steel 142 750 8471 Automatic data proces mach;optical reader,mach for transcribg data,etc 109 329 8536 Electrical apparatus for switching or protecting electrical circuits, 111 858 8517 Telephone sets, incl. telephones for cellular networks or for other wi 104 170 111 203 8803 Parts of aircraft and spacecraft of heading 8801 or 8802, n.e.s. 85 247 8537 Boards, panels, consoles, desks, cabinets and other bases, equipped wi 105 897 9018 Instruments and appliances used in medical, surgical, dental or veteri 80 655 9012 Electron microscopes, proton microscopes and diffraction apparatus 74 038 3002 Human blood;anim blood for therap use...;antisera...;vaccine,toxin... 74 231 8512 Electrical lighting or signalling equipment (excl. lamps of heading 85) 72 655 8542 Electronic integrated circuits; parts thereof 73 268 TOTAL (2017) 3 741 913 3 912 567

Bilateral Trade Overview – Services (2017) CZ export of service to the US (2017) - TOP 15 CZ import of services from the US (2017) - TOP 15 ths. USD % Other IT services 336 129 21,5 % Repairs and maintenance 382 826 30,9 % Other Computer Software 242 707 15,6 % Courier services 169 444 13,7 % Management consulting 139 463 8,9 % Road freight transport 114 956 9,3 % Research and development services 114 815 7,4 % 105 445 8,5 % Original computer software 88 562 5,7 % 102 228 8,3 % 88 087 5,6 % License fees - franchising 30 713 2,5 % License fees - R&D 56 753 3,6 % License fees - audio-visual. 28 979 2,3 % Original audio-visual TV 56 749 License fees - IPR 25 956 2,1 % Air freight transport 55 937 Other business services 25 163 2,0 % Accounting and auditing services 38 727 Lawyer services 18 324 1,5 % 36 928 2,4 % 16 704 1,4 % Telecommunication services 32 910 Railway freight transport 15 827 1,3 % 31 204 14 289 1,2 % License fees - software distribution 26 283 1,7 % 13 928 1,1 % Scientific and technical services 23 519 Scientific and Technology services 13 410 TOTAL 1 559 908 // 1 237 146

Overview of EU/CZ-US relations Largest trade and investment partners Every day trade (goods and services) flows worth 2,9 bil. EUR EU and US are its largest investors: EU investment account for 72% of inward FDI, in stocks: €2.74 trillion US investment €2.39 trillion Preferential trade relations? No, the EU and US do not have a free trade agreement -> MFN tariffs How EU and US enhance economic relations? Transatlantic Economic Council (2007) – direction of economic cooperation High Level Working Group report -> launch of Transatlantic Trade and Investment Partnership negotiations (2013-2016)

Current issues of EU-US trade relations Tariffs on steel and aluminium since June 1 the US applies additional tariff of 25 % on EU exports of steel and 10 % on EU exports of aluminium products based on S. 232 Trade Expantions Act 1962 Product coverage: Steel: HS 720610 - 721650, HS 721699 - 730110, HS 730210, HS 730240 - 730290, HS 730410 - 730690. Aluminium: HS 7601, HS 7604, HS 7605 to 7609, HS 7616.99.51.60, HS 7616.99.51.70 Possibility of individual exemptions upon decision of Department of Commerce Impacts: on EU level exports worth 6,4 bil. EUR, CZ exports worth 200 mil. USD EU in response adopted rebalancing measures – since June 22nd additional tariffs are applied towards US imports worth 2,8 bil. EUR (http://trade.ec.europa.eu/doclib/press/index.cfm?id=1868) Ongoing investigation of imports of cars and car parts Investigation based on S. 232 Product scope and intended measures are still unknown Impacts on EU are estimated to be 52 bil. EUR*, of which 330 mil. EUR* represent CZ exports (*indirect exports are not included)

Deescalation of trade dispute and new chapter in EU-US relations? Trump-Juncker meeting on July 25 2018 in Washington outlines a new phase of EU-US partnership Outlines from the Joint statement: launch of work towards a bilateral tariff agreement Strengthening of strategic cooperation in the area of energy including more imports of US LNG Voluntary dialogue on regulatory cooperation Stronger cooperation on multilateral/WTO issues – address unfair trading practices (IPR, forced technology transfer, SOEs, overcapacity). Leaders also agreed that no further tariffs would be applied and current tariff measures will be resolved. = No tariffs on cas and car parts And tariffs on steel and aluminium and EU retaliatory measures will be resolved

Representation of Czech Republic in USA General Consulate in Chicago Contact: Tomáš Trnka tomas_trnka@mzv.cz CzechTrade office in Chicago Contact: Jan Kubata, jan.kubata@czechtrade.cz General Consulate in New York Contact: Karel Smékal, commerce_newyork@mzv.cz CzechInvest – East Coast Contact: Jan Chmelík, newyork@czechinvet.org CzechInvest – West Coast Contact: Miroslav Tenkl california@czechinvest.org Embassy of the Czech Republic in Washington Contact: Jiří Janíček, eco_washington@embassy.mzv.cz General Consulate in Los Angeles Contact: Marino Radačič commerce_losangeles@mzv.cz

Thank you for your attention Lenka Fořtová Americas Unit Ministry of Industry and Trade fortova@mpo.cz