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News 02 Aug 17

Croatia's Raised Import Tax Angers Neighbours

Western Balkan countries have united in condemning Croatia's tax increase on imports of fruit and vegetables, with some hinting at possible counter-measures in response.

Sarajevo, Skopje, Belgrade
 Trucks at the border between Croatia and Serbia. Archive photo: BIRN.

Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia sent a joint letter to the European Commission on Wednesday, complaining about Croatia's imposition of so-called non-tariff barriers which hamper their exports of agricultural products to the country.

Croatia this week expanded the list of fruits and vegetables from non-EU countries that must undergo phytosanitary checks at the border and has set new fees for exporters that are 22 times more expensive than the previous ones.

According to the new tax rates, a certificate of compliance with Croatian market standards will now cost 270 euros instead of 12 euros.

This is expected to primarily affect Serbia, Macedonia and Bosnia and Herzegovina, the three main exporters of fruits and vegetables to Croatia that will now undergo additional inspections.

Croatia's neighbours complained to Brussels that the move was "one-sided" and that it would directly affect the long-term trade agreements that their exporters have with Croatian companies.

They also complained that this puts them, as countries who are aspiring EU members, "in an unequal position", adding that Croatia's move goes against the principles of the Stabilization and Association Agreements they have signed with the EU, of which Croatia is a member.

The Croatian Agriculture Ministry previously insisted that its main aim was to protect customers.

The Croatian ministry explained in a press statement that the fees for inspections were raised because "more effective controls at the borderline require more workload and the greater involvement of border inspectors".

Some countries have however already hinted at the possibility of imposing counter-measures against Croatia.

"Serbia will once more show its constructiveness and tolerance, but we will not ignore this and we will successfully protect our producers and our exporters," Serbian Prime Minister Ana Brnabic told media ahead of Wednesday's start of the Adriatic Charter Summit in the Montenegrin capital Podgorica.

Brnabic added that she will raise this issue at the summit.

Macedonia and Bosnia have hinted at possible counter-measures as well.

"We will carefully evaluate our response, which we hope will be coordinated with our neighbours who are similarly affected by this unilateral move. Certain equivalent countermeasures are certainly being discussed," a well-informed source from the Macedonian Economy Ministry told BIRN on Wednesday.

Bosnia's Minister of Foreign Trade and Economic Relations Mirko Sarovic also told media that his country "will respond" to Croatia's move, without giving any more details.

More concrete decisions are expected on Monday when representatives of Bosnia, Serbia, Macedonia and Montenegro are to meet in Sarajevo to discuss the problem.

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