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news 29 Sep 17

Kosovo Businesses Say Serbia is Blocking Free Trade

With the balance of trade between Kosovo and Serbia hugely in Serbia's favour - Kosovo businesses and economists say it is time to put pressure on Belgrade to allow genuinely free trade.

Die Morina
BIRN
Pristina
Border between Kosovo and Serbia. Photo: BIRN

Businesses in Kosovo are protesing against what they see as deliberate attempts by Serbia and Macedonia to block imports from Kosovo, so violating their commitments to free trade.

Pristina economic expert Naim Gashi notes that while the total volume of trade between Kosovo and Serbia is worth around 450 million euros a year, the balance if trade is hugely skewed in Serbia's favour.

Serbian exports to Kosovo account for about 425 of the 450 million euros, while Kosovo exports to Serbia are worth a paltry 25 million euros.

“We have a huge gap in trade balance between the two countries. Serbia sells lots of goods in Kosovo, but bureaucratic measures prevent Kosovo goods from reaching Serbia,” Gashi told BIRN.

In theory, Kosovo and Serbia are both committed to free trade through the Central European Free Trade Agreement, CEFTA, launched from within the EU in 2006.

But a report on the barriers to business between Kosovo and Serbia, presented by the Kosovo Chamber of Commerce on Thursday, said Kosovo still faces the huge obstacles in trading with its neighbours.

It listed “various obstacles" including technical trade barriers and sanitary and phytosanitary standards and measures that Kosovo does not meet in Serbia's eyes.

The report notes also Serbian customs procedures and a lack of direct communications, which means that agreements have often to be conducted using third-party mediators.

“Kosovo manufacturers say it's much easier to export goods to the EU or to Switzerland than to Serbia and Macedonia because of the deliberate bureaucracy that these two countries use to protect their own production,” Gashi said.

He urged the EU to condition the progress of the Balkan countries like Serbia towards EU membership with proper respect for free trade.

“Brussels needs to be more rigorous towards countries that block the movement of people and goods. A Balkan country that economically blocks its neighbors, as Serbia does over Kosovo, should not be allowed to progress towards the EU,” he said.

The report recommended giving economic criteria much more importance in the EU-led political negotiations on the normalization of relations taking place in Brussels.

It recommends especially removing all identified customs and non-customs barriers that violate the terms of the CEFTA agreement and restrict free trade.

It seeks also the cooperation of the Chambers of Commerce of Serbia and Kosovo through the organization of fairs, roundtables and other forms of business communications.

“Considering the volume and structure of goods exchange between Serbia and Kosovo, the liberalization of trade is in the interest of both parties,” it reads.

“In the Brussels dialogue between Kosovo and Serbia, the removal of barriers stopping economic cooperation should be constantly discussed, to find solutions in the interests of both states,” Gashi concluded.

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