Economy & Trade, Europe, Headlines, Human Rights

POLITICS: Europe Sends New Year Cheer for Serbs

Vesna Peric Zimonjic

BELGRADE, Dec 16 2009 (IPS) - Serbs can look forward to better prospects in the New Year, having scored two major diplomatic victories in recent weeks that may help integrate their country with Europe.

On Dec. 7, European Union (EU) foreign ministers decided to unblock the free trade agreement with Serbia from 2010 and, on Nov. 30, the 27-member bloc had abolished the visa regime for Serbs, standing since 1991.

“This is some of the best news in years,” head of the EU Integration office of the republic of Serbia, Milica Delevic, told journalists on Dec. 9.

“The winners are many… those who export their produce to the EU and citizens of Serbia who got back their right to travel without visas,’’ Delevic said. She added that the EU decisions came as a result of the “hard work of Serbia in many fields”.

The two important decisions came after the chief prosecutor of the International Criminal Tribunal for former Yugoslavia (ICTY), Serge Brammertz, said in his bi-annual report that Serbia has significantly improved its cooperation with the court.

The EU has put cooperation – over the arrest of the remaining fugitives from justice accused of war crimes in the 1992-95 Bosnian hostilities – as a precondition for Serbia’s integration with the EU.


In April 2008, Serbia and the EU signed the Stabilisation and Association Accord, the first step towards Serbian membership in the union. However, the membership has remained blocked pending its full cooperation with the ICTY.

Last year, Serbia handed over former Bosnian Serb leader Radovan Karadzic while the arrest of his military commander, Ratko Mladic, is said to be close at hand. The two went into hiding at the end of the war in 1995.

“This is the first time since 1980 – when former Yugoslavia had an agreement with the European Community at the time – that Serbia has a real a trade contract with the huge economic bloc with half a billion people,” economics professor Tanja Miscevic told IPS. “This is very important, particularly if Serbia has products that meet the standards and quality of the EU. We’ll also have a gradual influx of goods from the EU, relieved of the customs and tax burdens that existed for years.”

According to the head of the Serbian Chamber of Commerce, Milos Bugarin, an important effect of the trade agreement is the possibility of the so-called “diagonal accumulation of origin”, when nations that have no free trade agreements with the EU are able to participate in Serbian production, through input of raw materials and resources, and have produce exported to the EU under Serbian brands.

“This is fairly important for nations that are not in the same position as Serbia, such as Albania or Bosnia, as they can reach the EU markets in an easier way,” Bugarin explained.

Phasing out customs in Serbia means, for example, that in 2010, chemical products, cement, rubber, building material and machinery will see a fall in duty by 60 percent, while the duty on clothes and shoes will fall by 30 percent.

By 2014, duty will be abolished for all products, including household appliances and cars. “This [fall in duty] will of course mean less money in the budget, but the industrial revival that we expect in coming years and improved exports, particularly in agriculture, will make up for it,” Bugarin said.

According to agriculture minister Sasa Dragin exports of meat (beef, pork), sugar, fresh fruit and wine will significantly rise in the coming years. “We expect a rise in agricultural exports by 10 to 12 percent in the coming years,” Dragin said at a press conference, last week.

For years now, Serbian agriculture has been a pillar of the national economy, with exports reaching 1.7 billion dollars. The surplus in agricultural trade in 2008 was almost half a billion dollars.

“It’s high time the ‘national champions’ and campaigns like ‘buy domestic products’ ended,” economics professor Boris Begovic told IPS.

Begovic was referring to the fact that several tycoons who emerged in the murky years of rule of Milosevic have taken over Serbian markets, having a monopoly on imports of a variety of goods. The ‘buy domestic products’ campaigns were undertaken from time to time in the past as an effort to boost consumption of Serbian products, but most had indifferent results.

“Our latest research shows that 75 percent of the population would like international competition to blow away those who have taken over the market with their monopoly in imports,” Begovic added.

This led to an absurd situation in Serbia with some items having the highest price tags in Europe, although the average monthly salary stands at 500 dollars.

A well-known brand of diapers costs 23 dollars for a pack of 60, while in neighbouring Hungary it costs half this price. The same goes for washing machines, which are sold for 585 dollars against 390 dollars in Hungary.

While the experts are still debating the benefits of the trade agreement with the EU, the tourism industry is already happy with new developments. Tourist agencies in Belgrade are swamped with bookings for the New Year and winter holidays as the visa regime is being abolished from Dec. 19.

“There’s an avalanche of bookings as people can travel easily or, I’d say, with more dignity, without humiliation while waiting for visa or asking for one,” Milica Zarkovic from the prominent Kon Tik” travel agency told IPS.

“We sold all packages for Prague, for example, in just one day. The most attractive destinations are also Rome, Paris and Barcelona, but also the ski centres of Austria and France”.

 
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