The “network” of free trade agreements that Serbia concluded with other countries gives domestic producers a privileged status in the market of 1.3 billion people, according to data from the Serbian Chamber of Commerce.
This means that when the Free Trade Agreement which Serbia signed today with China, which has a population of over 1.4 billion, comes into force, it will practically double the size of the global market for domestic products.
The “oldest” free trade agreement signed by Serbia is the South East European Free Trade Agreement or CEFTA 2006, signed on December 19, 2006 in Bucharest. Apart from Serbia, other signatories of this agreement are Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro and UNMIK on behalf of Kosovo, while Bulgaria, Romania and Croatia “departed” the agreement when they joined the EU.
Three years after the signing of CEFTA, in January 2009, Serbia began implementing the Interim Trade Agreement with the EU, which was otherwise part of the Stabilization and Association Agreement (SAA). Only at the end of 2009 did the EU begin to apply the Transitional Trade Agreement, while the SAA itself entered into force only in 2013.
In December 2009, the Free Trade Agreement was concluded with the member states of the European Free Trade Association (EFTA), namely with Iceland, Liechtenstein, Norway and Switzerland. The following year, in 2010, the Free Trade Agreement with Turkey began to be applied, with added protocols in 2018.
Special free trade agreements with Russia, Belarus and Kazakhstan were upgraded by the Free Trade Agreement concluded between the Republic of Serbia and the Eurasian Economic Union and its member states, drawn up in Moscow, on October 25, 2019. The agreement, which entered into force on July 10, 2021, includes duty-free import and export of goods from Serbia to Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan.
The youngest Free Trade Agreement – with the United Kingdom of Great Britain and Northern Ireland – entered into force on July 15, 2021.
So, how much did Serbia benefit from these free trade agreements? The answer to this question lies in the reports compiled by the State Statistics Office (RZS).
“Serbia had a positive external trade balance, i.e. surplus, from January to June this year, with 10 European countries, in the value of around 1.9 billion euros, of which Montenegro occupies the first place as Serbia’s surplus in trading with Montenegro amounts to 532, 6 million euros”, states RZS in its report.
On the other hand, a negative external trade balance, or deficit, was also recorded in trading with 10 countries, in the amount of negative 3.9 billion euros in total.
“The largest external trade deficit in the period from January to June 2023 was recorded with China (about 1.7 billion euros) and Turkey (622.3 million euros), followed by the Russian Federation (deficit 459 million euros), Italy (394.3 million euros) and Germany (227.5 million euros),” RZS adds.
Dr. Dragana Mitrović, professor of the Faculty of Political Sciences at the University of Belgrade and founder of the Institute for Asian Studies, warned in an interview with Biznis.rs that the Free Trade Agreement with China should be approached cautiously.
“Otherwise, as in the case of Turkey, our deficit will only grow to new, even greater proportions, while domestic small and medium-sized private companies, which should be the backbone of economic dynamism will be suffocated by imported goods,” Professor Mitrović said.
There are also countries with which Serbia doesn’t have a Free Trade Agreement, but it has the right to use the Generalized System of Preferences and those are the USA, Japan and Australia.
To remind, the Internal and External Trade Minister, Tomislav Momirović, who today signed the Free Trade Agreement with China, announced in mid-September Serbian government was also working on concluding a Free Trade Agreement with Egypt, the Republic of Korea and the United Arab Emirates.
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