Mission Statement
Aerospace Trade Mission to Poland, Romania and the Czech Republic
November 3-7, 2003

Description

The Commerce Department's Office of Aerospace (OA), under the International Trade Administration (ITA), will organize an aerospace trade mission to Poland, Romania, and the Czech Republic, November 3-7, 2003. The mission will be led by a senior-level official in Trade Development and will include representatives from a variety of U.S. aerospace firms who are interested in entering or expanding activities in the Central European market, as Poland, Romania, and the Czech Republic prepare to accede to the European Union. The mission will focus on aircraft products and services, but will also be open to firms offering solutions to airport infrastructure needs, such as airport security. Examples of additional subsectors to be promoted during the mission are aircraft and parts, ground support equipment, and aviation maintenance. The current value of the dollar relative to European currencies has decreased the cost of our U.S. products and services in Europe, making them more attractive to that marketplace. The participation fee is $3,500.

Commercial Setting

Poland

The Polish market is the largest market in Central Europe, mainly due to the rapid growth of the Polish economy, the increasing level of disposable income there, and the improved competitiveness of Polish companies adapting to a market environment. U.S. companies will also be attracted to Poland's political stability, continuously decreasing inflation, its currency's fully convertible exchange rate, and the liberalization of its capital flow.
Poland's transport equipment sector is one of the country's fastest growing industries, particularly over the last five years. Modernization of the air transport infrastructure is a Polish government priority, with the gradual liberalization of the air transport and services market there. The Polish aircraft industry has excellent prospects for development through its cooperation with the world's largest manufacturers. There are now 55 aircraft related firms in Poland employing 16,000 people. These firms have been restructured for greater productivity and reduced production costs. They have diversified from being purely military in nature to covering both the civil and military markets.

Poland and the United States have signed a comprehensive trade package designed to lower tariffs on key U.S. exports including aerospace parts. This initiative, and Poland's harmonization of its tariff schedules in line with EU accession, will further contribute to a business environment conducive to U.S. exports. The country's compliance with other EU commercial and legal systems will additionally lead to business for U.S. companies, as Poland works to strengthen and streamline its domestic air transportation, while increasing air safety.

Poland's membership in NATO has already brought opportunities for U.S. companies in terms of upgrades and adjustments. Polish defense companies seek cooperation agreements or joint venture opportunities with foreign defense companies, which, combined with the relatively lower cost of production in Poland will be attractive to potential customers. Recent award of a fighter aircraft tender to a U.S. firm may bring additional opportunities for U.S. suppliers of related components and subsystems.

Romania

Romania's GDP has been growing steadily since 2000, with the manufacturing sector recently showing an increase of 9.6%. If this trend continues, it bodes well for future investments. An encouraging sign of transition in Romania has been the steady growth of the private sector. Generally small and medium-sized, private companies represent a good nucleus for U.S. firms seeking distribution channels. In the aviation sector, state-owned firms continue to be the most probable business partners for U.S. companies. An innovative response by the Romanian government to solving past problems with government tenders is its e-procurement program, with transparent online auctions and an ever increasing number of companies registering, reflecting the growing confidence in this new system.

The most promising aviation sub-sector is aircraft and parts. The restructuring and modernization of the national airline; the establishing of new, privately owned air carriers; and the upgrading of general aviation fleets are all expected to lead to a steady growth in the Romanian import market for civil aircraft and parts. Services currently offered by general aviation companies include ambulance services, crop spraying, forest fire surveillance/fighting, aerophotogrammetry, air taxi, and training flights. The diversification and upgrading of general aviation services will call for purchases of new aircraft to replace current aging fleets.

Potential for growth is also found in sub-sectors related to airport infrastructure development and airport security and safety. Currently, as part of a master plan regarding airport development through the year 2015, modernization projects are underway at all of the country's airports. They include runway lengthening and widening, runway strength upgrading, installing high-intensity lighting and approach systems, expanding and upgrading airport terminal facilities and, most importantly, improving airport safety. According to Romanian Government policy, all airports may be privatized. Individual plans for airport privatization are closely linked with plans for airport renovation, diversification, and expansion. Finally, the high-technology sub-sector of air traffic control is expected to continue to generate business opportunities, especially in conjunction with the implementation of inter-regional air traffic management projects. The prospects for U.S. exports of dual-use air traffic control (ATC) equipment over the short-to-medium term are quite good.

In spite of strong competition from Western European companies, U.S. suppliers of military equipment and technology, with their worldwide reputation for excellence, stand good chances in the Romanian defense market. With adequate support from the U.S. Government, and taking advantage of the good business climate generated by the strategic partnership between the United States and Romania, U.S. companies could secure important contracts related to the procurement programs of the Ministry of National Defense (MND).

Czech Republic

The Czech Republic's economic outlook for 2003 and beyond is positive, based on continued inflows of foreign investment and growing consumer demand. GDP growth of around 3% is expected next year and the economic transformation taking place in a still unsaturated market offers major opportunities for U.S. companies. Benefiting from a well-educated and skilled workforce, the country is becoming a strong, low-cost competitor and supplier in the global marketplace. Foreign manufacturers are setting up both "greenfield" and joint venture manufacturing projects to take advantage of the Republic's future EU membership. As the Czechs desire a strong U.S. presence in their country and are firm supporters of international efforts to combat terrorism, U.S. products and services should be attractive to the Czech Republic. U.S.-Czech relations are excellent and reflect strong historic ties and cooperation on a wide range of regional and global issues.

The quality of Czech transport networks and systems is generally below the standards of advanced European countries, and modernization of the transport sector is a government priority, as the EU is requiring the Czech Republic, like other EU-accession countries, to make substantial airport infrastructure investments. The international airports, specifically, need to be upgraded to meet an increased demand for cargo capacity as well as new safety and security standards. No significant domestic production of airport equipment exists currently and U.S. airport related products and services are highly regarded in the Czech Republic; therefore, there exist real export opportunities for U.S. companies there.

Best U.S. export prospects to the Czech Republic include security equipment, such as metal detectors, security monitoring systems, and training for as well as services of related security equipment. Additionally, the restructuring of the Czech Airport Authority (CAA) into two separate, state-owned companies may present opportunities for U.S. airport construction, management, and consulting firms. U.S. exports to the Czech Republic have also included aircraft parts, and current U.S. aviation manufacturers' industrial partnerships with Czech industry suggest an ongoing market there for U.S. aircraft parts manufacturers.
A principal Czech Republic import is transportation equipment and the Czech Republic is a significant potential buyer of U.S. aircraft. Major opportunities are in sales and leasing of large passenger, regional, and business aircraft, helicopters for medical emergencies and police work, and include a potential sale of supersonic fighters to the Czech Air Force. As the country seeks to meet NATO goals and commitments, the Czech Ministry of Defense (MoD) has demonstrated that it will give preference to modern, NATO-compatible equipment from stable suppliers.

Mission Goals

The mission aims to further both U.S. commercial policy objectives and advance specific business interests. The mission will assist export ready, already exporting, and new- to-market U.S. aerospace companies to pursue export and other business opportunities in Poland, the Czech Republic, and Romania by introducing them to potential business partners; the mission also aims to enhance government-industry dialogue through delegation briefings, one-on-one meetings and networking activities.

Mission Scenario

Trade Mission delegates will visit three countries: Poland, Romania, and the Czech Republic. Prior to the mission, participating companies will send to the U.S. Commercial Service post in each country approximately 15 information packets about their firms. These packets will be forwarded to potential business partners in the mission countries to aid in the scheduling of appropriate one-on-one appointments for the U.S. participants. At each stop, the local U.S. Commercial Service post will provide mission delegates a market briefing highlighting opportunities in the aerospace sector and give each delegate a schedule of one-on-one appointments with potential business partners. Through group events, site visits, and meetings tailored to each firm's interests, U.S. firms participating in the trade mission will be introduced to potential agents/ distributors, airport managers, and leasers, manufacturers, and users of general aviation aircraft. Meetings may also be set up for U.S. companies interested in working with appropriate stakeholders in the military aircraft subsector.

Timetable

Recruitment will begin in July 14, 2003 and should be concluded no later than October 1, 2003. Applications received after that date will be considered only if space and scheduling constraints permit. The trade mission is tentatively scheduled to commence in Warsaw, Poland, on November 3, 2003, continue on to Bucharest, Romania, and end up in Prague, the Czech Republic, where the mission program will conclude on November 7. The precise agenda will depend on the availability of government and business officials, specific goals of mission participants, and air travel schedules. Plans are for participants to spend one and one half days at each stop, with companies having both general and one-on-one meetings in each country. A more definite itinerary will be distributed as soon as it is available. Delegates will also have the opportunity to participate in the Ninth Annual Central Europe/U.S. Airport Security/Safety/Infrastructure Workshop, sponsored by the American Association of Airport Executives (AAAE), to be held in Prague, November 9-12. Additional information on this event will be available through the AAAE web site (www.airportnet.org) in July. Please contact Spencer Dickerson, at (703) 824-0504, or at spencer.Dickerson@airportnet.org, regarding the fee structure for the optional Central Europe/U.S. Airport Security/Safety/Infrastructure Workshop.

Participation Fees

The participation fee for a company's first representative on the trade mission is $3,500. Additional representatives may participate for $1,750 each.

Criteria for Participant Selection

1. A business line relevant to mission goals and market potential for U.S. businesses in the countries being visited.
   
2. A desired minimum of ten companies and maximum of 17 participating in the mission.
   
3. Timely submission of the completed application and participation agreement, signed by a company officer.
   
4. Timely payment of participation fee of $3,500 for a company's first representative and $1,750 for each additional representative.
   
5. Provision of adequate information on the company's products and/or services, and communication of the company's primary objectives to facilitate appropriate matching with potential business partners.
   
6. Provision of descriptive information on the company's background, business goals, and products/services sufficiently in advance of the mission to facilitate the preparation of trade mission brochures and the matching of the company with appropriate potential business partners.

Firms attempting to market goods and services on the Mission must certify that these goods and services will be either:

a) Manufactured or produced in the United States; or
b) If manufactured or produced outside the United States, be marketed under the name of a U.S. firm and have U.S. content representing at least 51 percent of the value of the finished good or service.

Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Commerce Department trade missions calendar (www.ita.doc.gov/doctm/tmcal.html) and other Internet websites, press releases to the general and trade media, direct mail and broadcast fax, notices by industry trade associations and other multiplier groups, and at industry meetings, symposiums, conferences, and trade shows. Any partisan political activities (including political contributions) of an applicant are irrelevant to the selection process.

Contact

Ms. Karen A. Dubin
ITA/TD/OA, Room 2128
U.S. Department of Commerce
Washington, DC 20230
Tel: 202-482-3786; Fax: 202-482-3113
E-Mail: Karen_Dubin@ita.doc.gov