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HUNGARY

intellectual property rights including patents, trademarks, copyrights, and inventions. It is a member of the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, and the Madrid Agreement concerning the International Registration of Trademarks. A draft law under discussion will protect integrated circuit layout designs.

Hungary's patent protection is far from adequate. The existing patent law only protects the process by which chemical compounds are produced, not the product itself. Based on this, the Hungarian pharmaceutical sector has developed into a major industry by inventing new processes to make drugs developed outside of Hungary, then producing them for both the local market and for export. The result has been a number of disputes between Hungarian pharmaceutical firms, who have one percent of world trade, and manufacturers in other countries, including the United States. Pharmaceuticals are a key export for Hungary, earning up to $80 million in export revenues annually. The Hungarian pharmaceuticals industry has successfully blocked the government's efforts to bring Hungary's patent laws into line with those of the United States and the EC. The United States and Hungary are negotiating a business and economic. treaty in which IPR issues are a central issue.

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Legislation passed in 1989 recognizes the right to organize, establishing the possibility of trade union pluralism. Excluding judicial and military personnel and the police, workers have the right to associate freely, choose representatives, publish journals, openly promote members'. interests and views, and go on strike. A number of competing trade union formations have emerged. The 1989 legislation guaranteed workers the right to call strikes to defend their economic and social interests, but strike to defend their economic and social interests, but strike action has been limited and more often directed against government policies rather than employers.

b.

Right to Organize and Bargain Collectively

The right to bargain collectively exists in law, although in practice wages have been excluded and are centrally negotiated in a tripartite macroeconomic policy body to control the rate of inflation. The right to bargain collectively was established in a 1969 law, which was amended in 1989 to allow collective bargaining at the enterprise and industry level. The Ministry of Labor is responsible for drafting labor-related legislation, while special labor courts enforce labor laws. the decisions of these courts may be appealed to the civil court system. Under the new legislation passed in July, employers are prohibited from discriminating against unions and their organizers. It is too soon to judge the effectiveness of this legislation. There are no export processing zones.

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Forced or compulsory labor is prohibited by law, which is enforced by the Ministry of Labor.

d. Minimum Age for Employment of Children

Labor courts enforce the minimum employment age of 16 years, with exceptions for apprentice programs, which may begin at 15. There does not appear to be any significant abuse of this statute.

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The legal minimum wage is established by the Interest Reconciliation Council (IRC) and subsequently implemented by Ministry of Labor decree. The average official workweek varies between 40 and 42 hours, depending upon the nature of the industry. The amended Labor Code of 1967 sets the workweek at 42 hours, but this varies slightly in some industries. Under existing law, workers receive overtime, a minimum of 15 days' paid leave per year, free health care, maternity leave, and pensions. Labor courts and the Ministry of Labor enforce occupational safety standards set by the Government, but specific safety conditions are not always up to internationally accepted standards.

f. Labor Conditions in Sectors with U.S. Investment

Labor conditions in sectors with u.s. investment do not differ significantly from those in Hungarian firms.

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(D)-Suppressed to avoid disclosing data of individual companies

(*)-Under $500,000

Source:

U.S. Department of Commerce (unpublished)
Bureau of Economic Analysis, August 1991

IRELAND

Key Economic Indicators

(Millions of Irish Pounds (IP) Unless otherwise noted)

1989

1990

1991
(est)

Income. Production. Employment

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Real GDP (1985 prices)
Real GDP growth rate

(percent) (1985 prices) GDP at Factor Cost by

Sector of origin: 1/
Agric/forestry/fishing
Industry
Distribution, transport

and communication
Public admin./defense
Other domestic
Adj. for fin. services
GDP at factor cost
Plus taxes on expenditure
less subsidies

GDP at market prices
Real Per Capita Income
Size of Labor Force (1000's)

employed and unemployed

total employed Unemployment rate (not seasonally adjusted)

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Money_and Prices

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Total Exports (FOB) 7/
Total Exports to US
Total Imports (CIF) 7/
Total Imports from US
Aid:
International Fund for

Ireland (IFI):
Aid from U.S ('000)
Aid from Canada ('000)
Aid from EC ('000)

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261 11,346

470 11,702

N/A
N/A
N/A

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1/ Annual averages. 21 December figure. 3/ July figure. 4/ Base: mid-November 1982 as 100 5/ mid-November figure. 6/ Base: year 1985 as 100 77 Differences between trade figure are due to technical adjustments.

Sources: Central Bank Bulletin; Central Statistics Office (CSO); Economic & Social Research Institute; IMF statistics.

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Ireland has a small open economy which is very dependent on trade. Exports of goods and services in 1990 were equivalent to 70 percent of GNP, while imports were equivalent to 61 percent of GNP. Government policies are generally formulated to facilitate trade and inward direct investment. Ireland has a market economy, which is based primarily on private ownership. Government ownership and control of companies generally occurs in those sectors which are considered by the government to be natural monopolies, those in which the state has stepped in to assist failing firms, or those of special importance to the economy. In the majority of cases, government-owned firms are operated on a commercial basis, and may be in competition with privately owned firms in the same sector. In recent years the government has taken steps to reduce its share holding in a number of companies which are considered commercially viable.

Fiscal Policy - Ireland's government debt is approximately IP 25.1 billion, of which about IP 8.9 billion is denominated in foreign currencies. The debt has generally been financed by the sale of government securities. The vast majority of the debt was accumulated in the 1970's and early 1980's, partly as a result of oil price shocks, but more generally as a result of expanding social welfare programs and government employment. The debt grew rapidly in the late 1970's and early 1980's due to large government deficits. However, the government has made considerable progress during

IRELAND

the past four years in reducing budget deficits and containing the growth of total debt.

There has been general cooperation by major political parties, labor and employers in the government's fiscal austerity program since 1987. A three-year national economic program formulated in 1987 by the "social partners" made major contributions to the economic resurgence and fiscal corrections which took place in the period from 1987 to 1990. Government budget deficits fell dramatically while exports, investment and consumer spending showed strong growth. second three-year national economic pact, known as the program for economic and social progress (PESP), was agreed in early 1991. It contains similar provisions for moderate wage increases and improvements in government finances. Projections for 1991 indicate that government borrowing will be about 2.5 percent of GNP.

A

Irish tax policies have a major effect on personal consumption and demand for imported goods. Personal income tax rates are very high in Ireland. In the 1991 budget the government reduced the standard rate of income tax from 30 percent to 29 percent, while the highest rate was reduced from 53 percent to 52 percent. Just over 60 percent of Irish tax payers are in the standard rate bracket. Irish value added tax (VAT) rates are among the highest in the European Community (EC). In the 1991 budget, the government reduced the standard rate of VAT from 23 to 21 percent. Further reductions are expected in VAT rates as the government moves to approximate the rates of other EC countries as part of the EC's program for a single European market. The standard corporate income tax rate in Ireland is 40 percent. Manufacturing firms and many exporting firms pay only 10 percent on corporate income under special arrangements designed to boost industrial development.

Monetary Policy - Ireland's monetary policies are aimed primarily at maintaining exchange rate stability within the European Monetary System (EMS), which ireland joined in 1979. Interest rates are the predominate tool used by the Central Bank to affect monetary variables.

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Until 1979, the Irish Pound (IP) was pegged to the Pound Sterling. In March 1979, Ireland joined the exchange rate mechanism (ERM) of the EMS and broke its link to the British currency It has, however, endeavored to maintain a stable competitive exchange rate against sterling due to the large amount of trade carried on between Ireland and the U.K. Membership in the ERM involves a commitment to maintain the Irish currency within a 2.25 percent band against other ERM currencies except for formal realignments. The Irish Pound has been adjusted downward twice since Ireland joined the EMS; 3.5 percent in 1983 and 8 percent in 1986. As part of the Common Agricultural Policy (CAP) of the EC, Ireland has maintained multiple exchange rates (known as green currency exchange rates) on agricultural goods subject to the CAP.

Under EC legislation, Ireland is committed to phasing out

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