Keepin touch

Whether you have a question, comment, suggestion or any problem in the purview of the government, send us your message and we will try to respond as soon as possible. If your problem is not in our purview, we will forward your message to the relevant institution.

The Government of the Republic of Serbia

In the service of citizens

31 bilateral free trade agreements signed

Belgrade, 30 June 2006

The Ministry of International Economic Relations said today that Serbia-Montenegro, Kosovo, Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Moldova and Romania concluded 31 bilateral free trade agreements based on the World Trade Organisation’s (WTO) regulations.

The conclusion of these agreements influenced commerce within the region although the main commercial partner of all countries in the region is the EU.

The Ministry said that exports to countries of the region in the period from 2000 to 2005 grew faster than total exports from those countries, while annual growth of Serbia’s exports to other Southeast European countries amounted to 24%, 21% to Croatia, 25% to Bosnia-Herzegovina and 51% to Albania.

The share of export to countries of the region increased in the same period in almost all countries that concluded bilateral agreements. The balance of Serbia’s total exchange with the region in 2005 showed a 21% surplus, which was also generated individually with Albania, Bosnia-Herzegovina, Macedonia and Moldova.

The next step is to establish a free trade zone that would cover 90% of total trade in the region, which would liberalise trade on a market of 650,000 square kilometres and nearly 58 million people.

Therefore, the first round of talks organised by the European Commission and the Stability Pact for Southeastern Europe took place in Brussels on June 28.

Representatives of the Serbian government and the Ministry of International Economic Relations, who led Serbia’s delegation, pledged an urgent conclusion of a universal agreement.

Establishing a free trade zone will positively influence commercial exchange within the region which will result from harmonisation of customs and other administrative regulations with WTO standards, including harmonisation of the judiciary in the area of intellectual property protection, regulation of competition, policy of import limitations and quotas and protection of certain industry branches.

Also, increased business transparency and the possibility of regional specialisation will bring about growth in foreign direct investment, and it should be noted that many multinational companies have already shown interest to invest in the region.

A multilateral agreement would improve the instruments for solving trade conflicts, which would also improve trade and increase the attractiveness of single markets regarding foreign investment.

If a single free trade zone is established, certain non-customs barriers to free trade would be surpassed, the countries would strengthen their relations with the EU and accelerate the process of WTO accession.

After the signing, the entire region should join the Central European Free Trade Agreement (CEFTA) which used to include only central European countries, who are now EU members.

Another significant point of the single free trade agreement is that it enables the conditions for setting up a diagonal accumulation zone between southeast Europe and the single EU market.

The statement explains that the EU prescribes the rules of origin which limit the possibility that a manufacturer in one country imports raw material from countries in the region and then exports finished products to the EU, labelled as domestic products.

Complex procedures of proving the origin add to transaction costs, multiply red tape, increase possibilities of corruption and reduce the publicity of customs procedures.

Having this in mind, a free trade zone would enable that products manufactured within the zone be labelled "Made in SEE", which would stimulate intra-regional cooperation regarding production, encourage specialisation and attract foreign investors who will then be able to enhance the production process in the region.

The next round of talks is scheduled for July 25, 2006, when state subsidies and protection of the food sector will be discussed.

The Serbian government will continue with activities of preparing Serbia for the signing of a single agreement, which is expected to take place by year's end.