The Republic of Serbia is today entering the second year of implementation of the Stabilisation and Association Agreement (SAA). With this Agreement, which entered into force on 1 September 2013, Serbia has created an organised and predictable regime of trade relations with the European Union, contributing, thus, to better economic environment for doing business and investments in our country. The main objective of the Agreement was creating a free trade zone between the EU and the Republic of Serbia.
The SAA represents a legal framework for relations between the Republic of Serbia and European Union until accession of our country to the EU.
The European Union is the most important trade partner making 64.3% of foreign trade in the first six months of 2014. Export to the EU increased in 16.1% in the first six months of this year when compared to the same period in 2013, and import increased in 4.3%. The EU is the largest investment partner of the Republic of Serbia.
Serbia, therefore, marks constant growth in export to the European Union market which is followed by steady, however, reduced growth in import from the European Union. This resulted in a decreased trade deficit in the trade with the EU. Since the coverage of import with export from the trade with the EU amounted to 44.4% in 2008, in the first half of this year this was 76.6%, which makes a significant improvement in comparison to the last year, аnd trade deficit decreased by 21.7% in comparison to 2013.
In terms of the most important export destination for Serbian products in the EU, Italy was on the first place (with 28.4% of the total Serbian export to the EU), followed by Germany (18.7%), Romania, Slovenia and Croatia in the first 6 months of 2014. In terms of import, Germany was first (with 18.9% of the total Serbian import from the EU), followed by Italy (18.7%), then Poland, Hungary, Austria and France.
Owing to the motor vehicle industry, Serbia gained a surplus from the trade with Italy, the main foreign trade partner from the EU. The number of EU member states with which Serbia marked a trade surplus also increased in the first 6 months of this year, and Serbia gained a positive balance in the trade with Romania, Cyprus, Portugal, Lithuania and Bulgaria.
We would like to remind that the European Union unilaterally liberalised import of goods from Serbia in 2000, whereas Serbia finished gradual liberalisation of import of goods from the EU on 1 January 2014. From the beginning of this year until Serbia’s accession to the EU, average customs protection of imported goods from the EU amounts to 0.99%, whereas import of 95.1% of products in the Customs Tariff is fully liberalised.
We would also like to remind that full liberalisation is not planned to be applied on strategic agricultural products which will be under customs protection until Serbia’s accession to the EU (all kinds of meat; dairy products; potato; tomato and other fresh and frozen vegetable; grape; apples; plums; cherries; wheat and wheat flour; corn, seed and mercantile products; corn flour and whole wheat flour; sunflower; margarine; sausages and pates; canned vegetables; canned fruits; tomato juice, grape juice, apple juice, pear juice, cherry juice and mixed fruit juices; vinegar, tobacco; ethyl alcohol, fruit brandies; certain categories of cattle for slaughter, pigs for slaughter, lambs for slaughter; edible products of animal origin, etc), and, in terms of sugar, refined sunflower oil and cigarettes, Serbia shall retain full customs.
Apples, grape, cherries, plums, strawberries, tomato and capsicum will still be subjected to the usual, seasonal tariffs.
Apart from creating the free trade zone, Serbia also assumed an obligation to harmonise its legislation with the EU acquis by signing the SAA. Continuing previous work in this area, the Government of the Republic of Serbia adopted the revised National Programme for the Adoption of the EU Acquis (NPAA) on 31 July 2014, which defines measures and activities in a period from 2014 to 2018 which will continue the process of harmonisation of the national legislation with the EU acquis and, thus, create a predictable and stable legislative framework primarily for the citizens of Serbia, but also for all the interested investors who want to invest their knowledge and resources in the development of Serbia.
