Bosnian Exports Already Hit By Croatian EU Membership

The Foreign Trade Chamber warned on Monday that Bosnia is already suffering because of a lack of trading standards and the situation is likely to deteriorate further when neighbouring Croatia becomes an EU member next year.

Duljko Hasic, an economic expert at the Foreign Trade Chamber, FTC, told a press conference in Sarajevo on Monday that the volume of exports to Croatia fell in the first six months of 2012.

“In that period Croatia dropped to second place on the list of the most important export partners for Bosnia and Hercegovina,” Hasic said, “mainly because of the problems we have had with meeting EU standards.”

He added that some products have been returned from the border because Bosnia does not have standardised rules on food quality.

Hasic warned that the situation will become increasingly serious from January 1 next year when Croatia starts to implement EU trading standards, six months prior to officially joining the union.

“The most affected area will be the food industry but other industries will also not go unscathed,” he said, adding that Bosnia has to prepare itself.

Bosnia’s exports to Croatia are currently regulated by the easier regime of the Central European Free Trade Agreement, CEFTA, to which both countries now belong.

When it joins the EU, Croatia must leave CEFTA and only import goods that meet the EU’s stringent agricultural hygiene inspection standards.

"The FTC's view is that Bosnia has to open direct talks with Croatia and negotiate a new trade agreement," Hasic said.

Bosnia cannot export poultry goods of animal origin to the EU, since EU standards have not been implemented yet. This means that the country’s main export markets are neighbouring countries.

Once Croatia becomes an official EU member, Bosnia stands to lose as much as 22 million euros a year in lost exports of meat, eggs and dairy products.

The greatest impact will be on Bosnian milk producers, who export over 60 per cent of their milk to Croatia.  Because Bosnia does not have EU-level hygiene standards or laboratories to certify goods, many farmers stand to lose money and jobs.