Analysis 30 May 16

Kosovo Businesses Query Benefits of EU Trade Deal

While Kosovo and EU officials have hailed the stability pact as a milestone, local producers fear a flood of cheap imports - and opposition MPs remain worried about the political implications.

Rrahman Ramaj, Albert Spahiu
The headquarters of the European Commission. Photo: Flickr

On April 1, the Kosovo government announced that the long-awaited Stabilisation and Association Agreement, SAA, with the EU had officially come into force, calling it “good news and an important step forward towards Kosovo’s European future”.

Since Kosovo signed the SAA with the EU in October 2015, EU officials have also repeatedly stressed the agreement’s importance.

“This is very good news and another important step on Kosovo's path towards EU integration. For the first time, the EU and Kosovo will enter into a contractual agreement”, Ulrike Lunacek, vice-chairperson of the European Parliament, said when the latter ratified the agreement on January.

While both EU and Kosovo government officials often focus on the SAA’s supposed political benefits, the bulk of the agreement concerns scrapping customs tariffs on a range of products and quotas for exports.

Almost all Kosovo products are included in the agreement – close to 100 per cent, according to the government. Around 70 per cent of those have immediately benefited from total abolition of EU customs fees. The rest will see a gradual reduction in fees over 10 years.

Less than half of EU-originated products benefit immediately from zero tariffs in Kosovo, meanwhile, while the rest will see reductions introduced over the next 10 years.

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