EU proposes that Croatia, Serbia and BiH continue "traditional trade flows."
By Biljana Pekusic for Southeast European Times in Belgrade -- 15/08/13
Companies in BiH and Serbia have been impacted by Croatia's entry into the EU. [AFP]
At the request of Croatia, the European Commission will begin negotiating revisions to the trade regime between the EU and members of the Central European Free Trade Agreement (CEFTA). But two of Croatia's key trading partners in the region, Serbia and Bosnia and Herzegovina (BiH), do not support the effort.
"Croatia wants to have preferences for its exports to the neighbouring countries that are still CEFTA members, but on the imports to Croatia act as a member of the EU," Milivoje Miletic, director of the bureau for regional co-operation of the Serbian Chamber of Commerce, told SETimes.
Since joining the EU on July 1st, Croatia is no longer a member of CEFTA, and duty rates have increased as a result. For example, the rate for cigarette trade among the seven CEFTA members is 15 percent, while it is 57 percent for non-EU nations to export cigarettes to the 28-nation bloc.
In addition to Serbia and BiH, CEFTA includes Albania, Kosovo, Macedonia, Moldova and Montenegro.
Serbia Deputy Prime Minister Rasim Ljajic and BiH Minister for Foreign Trade and Economic Relations Mirko Sarovic met in late July in Belgrade and agreed that the EU proposal to adapt the trade regime is unacceptable.
A statement released after the meeting said Serbia and BiH do not accept the conditions for importing products from Croatia. The two ministers said they would continue to co-ordinate views on this issue and jointly act to protect the economic interests of both countries and their relations with the EU.
Croatia wants to continue the CEFTA trade conditions for exports to the bloc's seven remaining members.
"We have accepted the import of about 20 products from Croatia at lower tariffs than the EU products, but for this we need to increase our quota for sugar exports to the EU," Jadranka Zekic Zeljkovic, adviser for multilateral economic co-operation in the Serbian ministry of trade, told SETimes.
The Serbian government wants approval for the export of an additional 45,000 tonnes of sugar to EU nations.
"We should seek increased quotas for the export of wine and the abolition of customs duties on exports of fruits, vegetables and fish to the EU," Aleksandar Senic, president of the Serbian parliament's agriculture committee, told SETimes.
Miomir Brkic, a researcher with international NGO Global Integrity, told SETimes that the EU is adopting a "policy of double standards." He said obligations should not be imposed upon Serbia and BiH to make concessions to Croatia.
Serbia Prime Minister Ivica Dacic and Ljajic are planning to meet with EU Enlargement Commissioner Stefan Fule by early September to discuss introduction of quotas for preferential imports of cigarettes from EU nations to Serbia.
BiH officials say any special terms should be equally applied.
"The same conditions for trade should be valid for everybody, but Croatia is asking for more for itself and all this on the expense of the economy of Bosnia and Herzegovina, which is unacceptable. The suggestion of the European Union to have Croatia keep the customs-free regime, CEFTA, which it has with BiH even after July 1st is not fair and it is against interests of our economy," Mirko Sarovic, BiH's minister of foreign trade and economic relations told SETimes.
BiH is asking Croatia to raise the quota for the export of sugar, wine and fish into Croatia and the countries of the European Union, but Croatia is seeking quotas for 230 different goods, which BiH opposes.
"Such a decision would mean damages worth a few million euros for BiH," Sarovic said.
Sarovic denied that cigarettes coming from Croatia would have lower taxes. Such treatment can be given only to cigarettes produced in BiH, and whose owners moved their factories to the territory of BiH, he said.
Correspondent Bedrana Kaletovic in Sarajevo contributed to this report.