World Bank’s project for simplifying trade in the Balkans

In December 2006, Serbia signed a CEFTA agreement in Bucharest which stipulated abolition of customs duties in the region. However, in practice, CEFTA is still plagued by problems, despite the fact that trading between Balkan countries has been liberalized 12 years ago.

Long queues that trucks are forming at border crossings, while waiting to be checked by the customs, is a testament to that.

“There is no logic that only at our border you can trucks forming mile-long lines. Hence, the World Bank has decided to launch a regional project that would facilitate trading in the Balkans”, said Lazar Sestovic, Senior Economist at the World Bank.

The project should be implemented on annual basis, with Serbia, Macedonia and Albania showing keen interest in it.

CEFTA has boosted trade and increased exports in the region, said Minister of Trade, Tourism and Telecommunications Rasim Ljajic. Still, trucks at border crossings still have to wait between 7 and 48 hours to be checked by the customs. In the ex-Soviet republic of Georgia, for instance, the waiting time is only seven minutes, the minister recalled.

“According to the IMF’s assessment, we are losing 26 million hours a year due to loaded trucks having to wait at the border”, the minister added.

“About 800 million EUR is spent annually on different types of services provided at border crossings, whether they are needed or not, which is 1% of GDP of the countries in the region”, added Ljajic.

According to the data collated by the Serbian Chamber of Commerce of Serbia (SCC), our country did increase external trade with all countries of the region last year. The biggest growth of 41% was recorded in trading with Bulgaria.

The latest data shows that, at the end of 2017, the external trade between Serbia and Bulgaria exceeded 1 billion EUR. At the same time, our exports to this country increased by more than 50%, while imports, compared to the previous year, went up by 28%. Only two years ago, the value of the trade between Serbia and Bulgaria amounted to 562 million EUR. At that time, we only traded less with Romania (EUR 206 million) and Albania (EUR 120 million).

However, out of all neighbouring countries, Serbia trades the most with Bosnia and Herzegovina. The SCC data shows that the value of the external trade between these two countries, in 2017, reached EUR 1.7 billion. The import increased by 28.8%, while the export of goods from Serbia to Bosnia went up by only 8%.

The SCC estimates that, out of all regional countries, Bosnia and Herzegovina is our biggest trading partner under CEFTA, accounting for 44% of the trade.

Single market

At the International Economic Fair in Mostar, Serbian President Aleksandar Vucic once again spoke about his idea of ​​establishing a regional customs union. “I will not give up on the idea of ​​establishing a single market in the region, as it rests on rational economic arguments – said Vucic.

(eKapija, 12.04.2018)

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