Serbia’s exports to the east are declining: what could the signing of an agreement with the Eurasian Economic Union bring?

While Serbia is waiting to sign an agreement with the Eurasian Economic Union (EAEU), exports of goods to Russia have been declining and the impression is that existing agreements have not been utilized well enough.

The agreements with Russia (Belarus and Kazakhstan), under which almost 95% of goods are customs duty-free, with Moscow being subject to Western sanctions, have not helped Serbia much. In fact, this year’s exports to Russia have been reduced by 8.7% compared to last year.

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Last year, Serbia’s trade with the countries of the EAEU amounted to 3.4 billion dollars, with a majority destined for Russia, about three billion. Exports amounted to 1.1 billion dollars, most of which ended up back in the Russian market, about 1 billion dollars. This figure is still lower than Serbian exports to Bosnia and Herzegovina, for instance.

“It is no coincidence that we are exporting more to Bosnia than to Russia. In Serbia we do not have a wide range of products for export, nor do we have global brands. Rather, our products are all of the medium quality. In order to export more to Russia, we need excellent logistics and transport and to satisfy all procedures, which is why it is not easy to enter that market. This is particularly difficult for the food industry; you have to invest in quality, then you have to invest again to be accepted by the retail chains. And no-one really does that because Serbian companies that export to Russia are small,” said Milan Kovacevic, a foreign investment consultant.

On entering the EAEU, a market of more than 180 million people, the proportion of duty-free goods would increase to 99.5%. Cheese, alcohol and cigarettes could be added to the list of products entering duty-free countries. It is also possible that, under the new agreement, Serbia will be able to export all types of rakija in unlimited quantities.

As Rasim Ljajic, Minister of Trade, told the Russian media, “while exports are decreasing, imports from Russia have increased by 18% this year, indicating that our economy has not taken advantage of the opportunities offered by existing agreements. Our plan is to increase exports to the EU markets to 1.5 billion dollars in two or three years.”

Serbia’s trade with the EAEU countries represented only 7.5% of its total trade in 2018, amounting to 45.1 billion dollars. On the other hand, trade with the EU Member States represents more than 60% of Serbia’s total external trade.

(eKapija, 02.09.2019)


This post is also available in: Italiano

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