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The Government of the Republic of Serbia

In the service of citizens

Government to decide on unilateral implementation of transitional trade agreement

Belgrade/Brussels, 15 October 2008

Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic announced that the government will tomorrow decide on the unilateral implementation of the transitional trade agreement with the EU, which is to begin on January 1, 2009.

Mladjan Dinkic

Dinkic, who is taking part in the European People’s Party summit in Brussels, told the Beta news agency that the trade agreement envisages a gradual decrease of customs tax on goods imported from the EU, which will help to increase the competitiveness in the Serbian market and enable citizens to buy goods from the EU at lower prices.

He confirmed that customs tax on new and second-hand cars from the EU will be halved as of January 1, and noted that Serbia has completed its part of the deal on the road to joining the EU – namely, it has ratified the Stabilisation and Association Agreement and considerably improved its cooperation with the Hague tribunal.

Dinkic emphasised that the government has also done a great deal to fight corruption and proposed two laws to Serbian parliament – one about confiscating property acquired through corruption and crime and one concerning an anti-corruption agency.

The Minister announced that negotiations with Italian truck maker Iveco on investing in Zastava will start tomorrow.

The agreement will be reached according to the Memorandum on Understanding, signed with Iveco and Magneti Marelli on September 29.

Dinkic recalled that the memorandum envisages forming another two joint companies. Italian partners would be the owners of 70 % of shares, while Serbia will have a 30% stake, and the agreement is to be signed by the end of the year.

The initial investment will be approximately €240 million. By the end of 2012, Iveco, co-owner of truck company Zastava Kamioni, will produce special vehicles in Serbia and about 2,200 buses a year, while Magneti Marelli will produce car parts and components for domestic and foreign markets, explained Dinkic.

According to him, both factories will be in Kragujevac’s industrial zone and will take on 2,350 workers. He added that car production is to become a leading branch of the economy in Serbia.