Trade hampered between Serbia and Kosovo - Updated
The trade bans on Serbian products on the part of Kosovo are back.
This article has been updated, see changes below.
Two years ago the Kosovan Government introduced a trade ban on goods from Serbia and Bosnia and Herzegovina, the two surrounding countries that did not recognize its independence proclaimed in 2008. On April 1st 2020, at the peak of the COVID-19 pandemic, this ban was lifted. Two months later the ban was reintroduced. On May 30th, the Kosovan Government imposed additional trade restriction measures with Serbia. Kosovo is now banning the use of documents for agricultural and industrial products that have elements contrary to the Kosovo Constitution, failing to include the name of the “Republic of Kosovo”. This is unacceptable for the Kosovan authorities since it denies its independence and sovereignty. As Serbia and Bosnia and Herzegovina still do not recognize the independence of Kosovo, official documents issued by the state authorities of these two countries cannot state as Kosovo officials require.
This divergence in approach caused long ques at the border with Kosovo again. Trucks in transit through Kosovo were allowed to pass the Kosovan border crossing point, but trucks carrying goods intended for the market in Kosovo are barred from entering as they do not meet the requirements imposed by the Kosovo Government. The majority of these trucks have been parked alongside the road to the Jarinje border crossing point since the introduction of the new measures. They are waiting for companies whose products they are transporting, to provide them with instructions or new permits to enter Kosovo.
The latest decision of the Kosovan authorities hampering the flow of goods and services between surrounding countries is colliding with CEFTA agreements. This trading issue will be the main topic in the upcoming bilateral talks between Serbia and Kosovo which will be organized by the EU Special Representative for the Belgrade-Pristina dialogue Mr. Miroslav Lajcak. Consignments coming from Northern and Central Europe intended for Kosovo currently cannot transit through the territory of Serbia and Bosnia and Herzegovina if the official documents state “Republic of Kosovo”. Such consignments will have to take a by-pass route via Romania and Bulgaria to enter Kosovo at the border with North Macedonia. From south Europe the route via Albania and Montenegro would be more practical.
Meanwhile trade between Serbia and Montenegro runs smoothly despite the fact that the Montenegrin Government continues its restrictive measures towards entry of foreign citizens from countries with higher number of infected people (25 over 100.000 inhabitants). As Serbia is among the countries with a higher number of infected than 25/100.000, this situation caused quite a few dilemmas regarding the entry into Montenegro. However, at the moment freight trucks carrying goods from one country to the other encountered no problems at border crossing points. According to the Chamber of Commerce data, in Q1 2020, Serbia exported €163 million worth of goods to Montenegro, which is a rise of 1.5% y-o-y, and imported cca €15 million from Montenegro.
On June 6th the Government of Kosovo revoked all reciprocity measures. By withdrawing previously introduced barriers to trade, the main obstacle for continuation of the bilateral talks between Belgrade and Pristina has been removed
The President of the Serbian Chamber of Commerce (PKS) said that the decision to introduce reciprocity measures were harmful not only for the Serbian economy but also for the economy of the entire region, above all, to Kosovo. Two-thirds of products that Kosovan companies buy from central Serbia are supplies for work, production materials, and raw materials they process. From the raw materials, Kosovan SMEs are making final products and selling them within the country or exporting them. “Businesses in Kosovo do not buy those goods because they have a political attitude toward a semi-finished product from Serbia but because they are competitive and enable them to earn money, employ people, and maintain their business,” PKS President Mr Cadez explained in an interview to Albania’s Klan TV.
According to the official customs data, from the abolishment of Pristina’s tariffs on the raw materials and other products on April 1st until the end of May, companies in Kosovo bought EUR 42 mn worth of goods from central Serbia.