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The Government of the Republic of Serbia

In the service of citizens

Protecting domestic economy from unfair foreign competition

Belgrade, 25 November 2005

Serbian Minister of International Economic Relations Milan Parivodic said today that the adoption of the Law on foreign trade operations will equalise domestic and foreign trade, and introduce methods of protection of the domestic economy against unfair competition from abroad.

Milan Parivodic at today's press conference

Author: Tanjug

Parivodic voiced hope at a press conference that this law will protect the domestic economy from the practice of dumping - importing goods from abroad and selling them at less than the normal price with the aim of destroying domestic competition and then achieving monopoly profits by subsequent rapid increase in prices.

According to Parivodic, this law will also introduce measures for the protection from subsidies of foreign states which are not harmonised with principles of the World Trade Organisation, in order to remove the effect of state subsidies for exports.

In addition, the measures against excessive import will be introduced, as well as interim measures that will enable the state's emergency reaction in the case of disturbances on the market, Parivodic announced.

The minister said that the grade of four, which the European Bank for Reconstruction and Development (EBRD) gave to Serbia-Montenegro in its report for being the quickest reformer among 27 countries in transition in central and eastern Europe, is good news, but only a relative success as well because the state can't relax.

According to Parivodic, the EBRD's report confirmed the World Bank's positive report concerning the success of reforms in Serbia-Montenegro. The positive mark for the liberalisation of prices creates space for further necessary liberalisations, first of all in the prices of energy products, because otherwise Serbia could fall out of competition on the market.

He said that in trade and foreign currency regime, which have also been judged positively in the EBRD report, there is scope for further liberalisation, especially in the buying of shares abroad.

Parivodic said that Serbia received a weaker rating for privatisation of big enterprises that will, according to him, be intensified, but also for the reform of insurance societies that will have to start with the privatisation process as soon as possible.

He said that the weakest rating was given where actual competition is in question, the significance of which has not been adequately understood in the country until now. The duty of the state is to protect the process of competition, and not to protect individual enterprises on the domestic market. The job of the state is to establish markets abroad for domestic enterprises.

He said that adopting the law on mortgages represents essential departure from the previous ineffective mortgage systems and explained that it will be possible to set up mortgages on buildings under construction, so long as that building is being constructed on the basis of a legally valid building permit.

Parivodic said by adopting this law, even those buildings that have not been registered, but are finished, can become objects of mortgage according to the same principal that applies to mortgaging unfinished buildings.

The method of sale of immovable property, according to this law, is incomparably more effective, so that the creditor will be able to secure payment in case the debtor does not pay the debt in a period of a few months given that the creditor will be obliged and authorised to sell the immovable property.

Parivodic said that this law has been supported by the Serbian Association of Banks, courts with jurisdiction and cadastres.