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News 03 Nov 17

Serbia Warns Kosovo Over Extra Tax on Flour

Serbia said it would introduce unspecified 'counter-measures', after Kosovo said it was sticking by its decision to raise the tax on imported Serbian flour.

Filip Rudic BIRN Belgrade
Illustration. Photo: Pixabay

Serbia’s Trade Minister Rasim Ljajic announced counter-measures against Kosovo starting on Friday, after Kosovo said it would not rescind a decision to impose an extra tariff on flour imported from Serbia.

"We will successively strengthen those measures depending on how the situation develops," Ljajic told Beta news agency without specifying what the counter-measures will be.

He affirmed that Serbia will uphold its obligations stemming from the Central European Free Trade Agreement.

Serbia has also sent a letter to the European Commission to complain about the problem, but Ljajic said he believed the counter-measures will be more effective.

This decision followed a statement by Kosovo’s Trade and Industry Minister, Bajram Hasani, who said that Kosovo will not revoke its October 23 decision to additionally tax Serbian flour by 0.04 cents per kilo.

The decision came after the association of Kosovo millers accused Serbian producers of suffocating the local industry by dumping prices – selling flour at prices lower than the cost of production.

The Trade Ministry said that this policy threatened Kosovo’s own flour industry, and that the extra tax would remain in place despite "threats from Serbia". Minister Hasani also hinted at the possibility of Kosovo pulling out of the CEFTA agreement.

Ljajic, who says that around 50 Serbian companies export between 2,000 and 3,000 tons of flour to Kosovo a month, denies that Serbia was using dumping prices.

"We will deliver to Kosovo’s millers the documents on the prices of wheat and flour from January to October this year, which will show the impossibility of there being any price-dumping," Ljajic said.

He added that if any anti-dumping measures were needed, they should be taken against specific producers who broke the rules, not against the whole industry.

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