JOINT DECLARATION ON LAUNCHING OF ADRIATIC EUROREGION SIGNED IN VENICE
Nobody wanted to create a new Yugoslavia
Montenegro seeks to foster improved business climate
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TRANSITIONS ONLINE:
The EU’s proposal for a free trade area in the Western Balkans don’t go far enough, Serbia’s deputy prime minister says.
BRUSSELS, Belgium | The European Commission on 27 January put forward a series of measures aimed at boosting economic cooperation and development in the western Balkans, but the plan has been met with little enthusiasm in the region itself.
From Croatian apprehension that the plan smacks of the former federation of Yugoslavia to Serbia’s criticism that it does too little to address the key question of investment, the Commission’s proposal is likely to be amended before it is presented to an informal meeting of foreign ministers from the EU and the western Balkans on 10 March in Salzburg.
THE PROPOSALS
In a strategy paper titled “The Western Balkans on the road to the EU: consolidating stability and raising prosperity,” the Commission proposed to foster trade and economic development, movement of persons, education and research, regional cooperation, and civil society in the western Balkans.
“While the Kosovo status process is moving ahead, we need to encourage the people of the western Balkans to look forward to their European future, not back to the nationalism of the past,” EU Enlargement Commissioner Olli Rehn said at the presentation of the paper, standing alongside the UN special envoy for the Kosovo status talks, Martti Ahtisaari. “The best way to do that is to focus on practical measures which will integrate their economies and societies into the European mainstream,” Rehn said.
The enlargement commissioner warned that the western Balkans “should not be allowed to remain a black hole or a ghetto in Europe.”
The proposals include the easing of visa requirements, increasing scholarships, a new regional school for public administration, a civil-society dialogue with the EU, contributions to the recently established European Fund for Southeast Europe (a public/private investment fund financed by international and national donors), and the creation of a diagonal-cumulation-of-origin formula, which would make it easier for a producer in one country to process raw materials from another.
But the key proposal is the creation of a regional free-trade agreement among the countries of the region: Serbia-Montenegro (including Kosovo), Bosnia and Herzegovina, Croatia, Albania, and Macedonia.
The rationale behind the free-trade measure is the relative inefficiency of the current web of bilateral trade agreements in the region – 31 in total – which have failed to produce a sufficient level of intra-regional trade or were not properly implemented.
This idea is not new: it has been on the table since mid-2005, when trade ministers from the region agreed to turn bilateral free-trade agreements into a single regional agreement. Rehn himself had cited the idea on several occasions.
THE OBSTACLES
But the proposal infuriated public opinion in Croatia, which saw the idea as evidence of a Brussels plan to resurrect the old Yugoslavia, which went up in flames in the early 1990s.
Croatian Prime Minister Ivo Sanader tried to calm the outcry by saying there was no chance of anyone in the EU “trying to create something like Yugoslavia.” He suggested that, instead of creating a new regional zone, the existing Central European Free Trade Agreement (CEFTA) should be extended to the western Balkans.
After the last wave of EU enlargement, in 2004, only Romania, Bulgaria, and Croatia remain members of the CEFTA. Bulgaria and Romania are slated to enter the EU in 2007 or 2008, and Croatia hopes to follow in 2008 or 2009.
The Croatian Chamber of Commerce harshly criticized the Commission’s proposal, saying it had more to do with politics than trade. It said the idea was “dangerous” because it demonstrated that the EU did not have a clear concept for resolving the relationship between Serbia and Montenegro, which could split this spring, or the status of Kosovo and Bosnia and Herzegovina.
Serbian officials, by contrast, welcomed the proposal, but said it did not go far enough in attempting to boost trade and investment in the region.
In an interview with TOL, Serbian Deputy Prime Minister Miroljub Labus described what he saw as the proposal’s shortcomings.
“The free-trade reasoning is good, but we are still in a deep depression, in a post-conflict situation, and we need to boost development,” he said. “Free trade is a must, but it is not sufficient. We need investment, but there is not much investment policy in the paper.”
Labus said Serbia was firmly in favor of forming a single market in the region instead of the many bilateral free-trade agreements. “But until this single market is formed, we ask for these bilateral agreements to be fully implemented.”
He argued that the diagonal cumulation of origin should not be restricted to countries that have signed a Stabilization and Association Agreement with the EU, that is, Croatia and Macedonia, but also to those which have asymmetrical preferential regimes with the EU, thus including the entire region. This rule would allow a producer in, say, Croatia, to treat raw materials or components from another country that is also party to the agreement (such as Serbia) as domestic when the final product is exported to the EU.
Tanja Miscevic, the head of the Serbian government’s EU integration office, agreed with Labus that the Commission’s free-trade proposal had its limitations.
“A single free-trade agreement without an institutional infrastructure but only a secretariat cannot really be efficient,” Miscevic said. She warned that under such circumstances the proposal might not be “realistic or sustainable.”
AMENDING THE PLAN
Another potentially difficult area is the relaxation of the visa regime of the Schengen agreement, which emerged outside the EU framework but has 15 European signatories, for citizens of western Balkans countries.
EU Justice and Internal Affairs Commissioner Franco Frattini said after meeting Labus in Brussels that some groups, notably students and business people, would benefit from such measures and travel more easily in the EU.
“Our opinion is that there is no free trade unless at least businessmen can travel freely. If this obstacle is not lifted, we will not see the full effects of free trade,” Labus said.
“My proposal is to make this plan much more effective than it is right now. This is not a criticism, but a suggestion that we should be truly looking for practical measures,” he added, suggesting there was sufficient time before the Salzburg meeting to revise certain aspects of the plan.
He says the Commission’s plan “perfectly” fulfilled all political promises the EU made at the 2003 Thessaloniki summit.
“They are really repeating that the Balkans will be a part of Europe in the future and we no longer have to worry about the dilemma of whether we will be in Europe tomorrow or not,” Labus said. “But there is a need to switch from the level of political promises to the level of practical measures in order to accelerate our way into the EU,” he said.
Miscevic said another problem was that most of the proposals set out in the Commission’s proposal, such as a single free-trade area or visa facilitation, would be implemented only in 2007. “This leaves us with an empty 2006,” she said.
At the same time, Miscevic said the Commission’s proposal was the maximum that the EU could propose “at this specific moment of time” given political constraints.
“Due to enlargement fatigue, the outcomes of last year’s referenda on the European constitution, and problems with the EU budget, ordinary citizens and politicians in the EU are not willing to commit more to enlargement than they already have,” Miscevic said.
Aleksandar Mitic is a TOL contributor from Brussels and Belgrade.
BRUSSELS, Belgium | The European Commission on 27 January put forward a series of measures aimed at boosting economic cooperation and development in the western Balkans, but the plan has been met with little enthusiasm in the region itself.
From Croatian apprehension that the plan smacks of the former federation of Yugoslavia to Serbia’s criticism that it does too little to address the key question of investment, the Commission’s proposal is likely to be amended before it is presented to an informal meeting of foreign ministers from the EU and the western Balkans on 10 March in Salzburg.
THE PROPOSALS
In a strategy paper titled “The Western Balkans on the road to the EU: consolidating stability and raising prosperity,” the Commission proposed to foster trade and economic development, movement of persons, education and research, regional cooperation, and civil society in the western Balkans.
“While the Kosovo status process is moving ahead, we need to encourage the people of the western Balkans to look forward to their European future, not back to the nationalism of the past,” EU Enlargement Commissioner Olli Rehn said at the presentation of the paper, standing alongside the UN special envoy for the Kosovo status talks, Martti Ahtisaari. “The best way to do that is to focus on practical measures which will integrate their economies and societies into the European mainstream,” Rehn said.
The enlargement commissioner warned that the western Balkans “should not be allowed to remain a black hole or a ghetto in Europe.”
The proposals include the easing of visa requirements, increasing scholarships, a new regional school for public administration, a civil-society dialogue with the EU, contributions to the recently established European Fund for Southeast Europe (a public/private investment fund financed by international and national donors), and the creation of a diagonal-cumulation-of-origin formula, which would make it easier for a producer in one country to process raw materials from another.
But the key proposal is the creation of a regional free-trade agreement among the countries of the region: Serbia-Montenegro (including Kosovo), Bosnia and Herzegovina, Croatia, Albania, and Macedonia.
The rationale behind the free-trade measure is the relative inefficiency of the current web of bilateral trade agreements in the region – 31 in total – which have failed to produce a sufficient level of intra-regional trade or were not properly implemented.
This idea is not new: it has been on the table since mid-2005, when trade ministers from the region agreed to turn bilateral free-trade agreements into a single regional agreement. Rehn himself had cited the idea on several occasions.
THE OBSTACLES
But the proposal infuriated public opinion in Croatia, which saw the idea as evidence of a Brussels plan to resurrect the old Yugoslavia, which went up in flames in the early 1990s.
Croatian Prime Minister Ivo Sanader tried to calm the outcry by saying there was no chance of anyone in the EU “trying to create something like Yugoslavia.” He suggested that, instead of creating a new regional zone, the existing Central European Free Trade Agreement (CEFTA) should be extended to the western Balkans.
After the last wave of EU enlargement, in 2004, only Romania, Bulgaria, and Croatia remain members of the CEFTA. Bulgaria and Romania are slated to enter the EU in 2007 or 2008, and Croatia hopes to follow in 2008 or 2009.
The Croatian Chamber of Commerce harshly criticized the Commission’s proposal, saying it had more to do with politics than trade. It said the idea was “dangerous” because it demonstrated that the EU did not have a clear concept for resolving the relationship between Serbia and Montenegro, which could split this spring, or the status of Kosovo and Bosnia and Herzegovina.
Serbian officials, by contrast, welcomed the proposal, but said it did not go far enough in attempting to boost trade and investment in the region.
In an interview with TOL, Serbian Deputy Prime Minister Miroljub Labus described what he saw as the proposal’s shortcomings.
“The free-trade reasoning is good, but we are still in a deep depression, in a post-conflict situation, and we need to boost development,” he said. “Free trade is a must, but it is not sufficient. We need investment, but there is not much investment policy in the paper.”
Labus said Serbia was firmly in favor of forming a single market in the region instead of the many bilateral free-trade agreements. “But until this single market is formed, we ask for these bilateral agreements to be fully implemented.”
He argued that the diagonal cumulation of origin should not be restricted to countries that have signed a Stabilization and Association Agreement with the EU, that is, Croatia and Macedonia, but also to those which have asymmetrical preferential regimes with the EU, thus including the entire region. This rule would allow a producer in, say, Croatia, to treat raw materials or components from another country that is also party to the agreement (such as Serbia) as domestic when the final product is exported to the EU.
Tanja Miscevic, the head of the Serbian government’s EU integration office, agreed with Labus that the Commission’s free-trade proposal had its limitations.
“A single free-trade agreement without an institutional infrastructure but only a secretariat cannot really be efficient,” Miscevic said. She warned that under such circumstances the proposal might not be “realistic or sustainable.”
AMENDING THE PLAN
Another potentially difficult area is the relaxation of the visa regime of the Schengen agreement, which emerged outside the EU framework but has 15 European signatories, for citizens of western Balkans countries.
EU Justice and Internal Affairs Commissioner Franco Frattini said after meeting Labus in Brussels that some groups, notably students and business people, would benefit from such measures and travel more easily in the EU.
“Our opinion is that there is no free trade unless at least businessmen can travel freely. If this obstacle is not lifted, we will not see the full effects of free trade,” Labus said.
“My proposal is to make this plan much more effective than it is right now. This is not a criticism, but a suggestion that we should be truly looking for practical measures,” he added, suggesting there was sufficient time before the Salzburg meeting to revise certain aspects of the plan.
He says the Commission’s plan “perfectly” fulfilled all political promises the EU made at the 2003 Thessaloniki summit.
“They are really repeating that the Balkans will be a part of Europe in the future and we no longer have to worry about the dilemma of whether we will be in Europe tomorrow or not,” Labus said. “But there is a need to switch from the level of political promises to the level of practical measures in order to accelerate our way into the EU,” he said.
Miscevic said another problem was that most of the proposals set out in the Commission’s proposal, such as a single free-trade area or visa facilitation, would be implemented only in 2007. “This leaves us with an empty 2006,” she said.
At the same time, Miscevic said the Commission’s proposal was the maximum that the EU could propose “at this specific moment of time” given political constraints.
“Due to enlargement fatigue, the outcomes of last year’s referenda on the European constitution, and problems with the EU budget, ordinary citizens and politicians in the EU are not willing to commit more to enlargement than they already have,” Miscevic said.
Aleksandar Mitic is a TOL contributor from Brussels and Belgrade.
