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NEWS 21 Mar 17

Kosovo, Albania Give 'Common Market' Call Thumbs Down

Kosovo's Prime Minister has dismissed calls for a Western Balkan 'common market' as a pointless diversion from the goal of EU membership - while an important union in Albania has reached the same conclusion.

Fatjona Mejdini
Leaders of Western Balkan and EU commissioner Hahn on a meeting in Sarajevo. Photo: Isa Mustafa's Facebook page

EU Commissioner for Enlargement Johannes Hahn's support for the creation of a common market in the Western Balkans, raised during the recent summit of six leaders in Sarajevo, has drawn little enthusiasm in Kosovo and Albania.

In his speech in Sarajevo on March 16 directed to Western Balkan countries, Hahn put the focus on the need to develop regional cooperation and create a single market space in the six countries.

"We propose a Common Market for the Western Balkans. Our ambition is to remove barriers and create a single space for economic development. It will also make clear a longer-term aim of integrating the Western Balkans Common Market into the EU’s internal market," he said.

He emphasized that while trade with the EU was strong, the Western Balkan economies have remained poorly integrated into world trade generally, while barriers from the 1990s have prevented regional trade from reaching its full potential.

Kosovo Prime Minister Isa Mustafa took to Facebook one day later to show his lack enthusiasm for the idea.

"Not all the Western Balkans benefit the same from joint trade. We don't view this proposal with enthusiasm ... and we don't want past experiences under a new wrapper," he said.

"Kosovo sees itself in a unique European market based on a Stabilisation Association agreement," Mustafa emphasized.

The six countries of the Western Balkans are already in a free trade agreement, the Central European Free Trade Agreement, CEFTA, launched from within the EU in 2006.

However, many see this agreement as ineffective and as unable to tap the economic potential of the Western Balkans.

Besa Shahini, a European Union policy expert in a comment for Pristina Insight, said the CEFTA agreement had not worked well or brought much good to a country like Kosovo that does not produce much.

"This is yet another little project to keep the Western Balkans busy instead of focusing on the missing EU accession perspective," she wrote, about the new common market idea, arguing that Kosovo is going to benefit little even in the best scenario.

The lack of effectiveness of the current CEFTA arrangements was also used as a hostile argument on March 19 by Konfindustria, a union of production and service industries in Albania.

"CEFTA can be considered a failed agreement and the removal of the customs tariffs has been replaced by 'non-tariff' hurdles that have strongly impeded free trade in the region," Konfindustria said.

The union said the continued de-facto existence of monopolies in the region, the strong ties between businesses with politics and "state capture" in some cases were all elements hindering free trade.

The fact that Western Balkan countries have not been given a deadline over their integration into the EU or a program to assist investment in the economies is used as another argument by Konfindustria to express disapproval for the initiative.

Zef Preci, director of the Albanian Center for Economic Research, told BIRN that the idea of a common market was not a bad one although its realization would require strong willpower from the leaders of the six Balkan countries.

"The countries of the Western Balkans lack competitiveness and policies that stimulate national products and exports," he said.

"In order to benefit from free trade it is important to conduct cross-countries' production analysis and stimulate competitive and comparative advantages," he added.

Preci said he believes the region has an untapped trade potential and that some Albanian products, for example, might be more profitably exported to Montenegro or Serbia than to China.

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