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Croatia raises import tariffs and neighbouring countries announce responses
Officials of Montenegro, Bosnia and Herzegovina (BiH), Macedonia, Albania and the self-proclaimed Kosovo are planning a joint response to Croatia's decision to increase import duties on vegetables and fruits coming from countries that are not members of the European Union. A meeting of representatives of Croatia's neighbours was held on 7 August in Sarajevo (Bosnia and Herzegovina) to work out the details of this response, as reported by the Montenegrin channel RTTC.
The decision taken last week entails an increase in the import duties on fruit and vegetable imports from third countries from 12 to 270 Euro per tonne. The Croatian authorities justified this on the need to reimburse the costs of phytosanitary controls and the issue of certificates of conformity for vegetables and fruits imported from third countries.
However, Croatia's position provoked complete perplexity among its neighbours. In particular, the Minister of Foreign Trade and Economy of BiH, Mirko Sharov, believes that Croatia's decision contradicts the principles of free trade. "Croatia's actions are discriminating not only for the Balkan states, but also for Turkey and some other countries," stated Sharovic. In his opinion, an increase in the cost of phytosanitary inspection services will take a negative toll on the competitiveness of Bosnia and Herzegovina (where domestic prices are much lower than in Croatia) in the Croatian market.
The chairman of the Union of Fruit Producers of the Bosnian Republika Srpska, Dragoya Doichinovich, added that "if they increased duties for us, then we must do the same for goods that are imported to BiH from Croatia. These measures would hit Croatia more than their measures will strike us, as Croatian exports to BiH are several times greater than the exports of BiH to Croatia and the EU countries."
On the eve of a trip to the Sarajevo meeting, the Minister of Trade, Tourism and Telecommunications of Serbia, Rasim Ljajic, said on the air of the Serbian state channel RTS that if Zagreb fails to reach an agreement, Serbia will appeal to the European Commission to consider countermeasures. According to the Serbian minister, the move made by Zagreb is incompatible with the EU Stabilization and Accession Agreement, as well as with the principles of the WTO.
Moreover, Ljajic stated that "we could also enforce countermeasures, but we would like to avoid this. The introduction of countermeasures could harm our relations and affect producers and eventually consumers. This protectionism to which the Croatian government is resorting will primarily hit Croatian consumers, because the cost of goods will increase," assured Rasim Ljajic.
For his part, the Croatian Minister of Agriculture, Tomislav Tolusic, stressed before the meeting in Sarajevo that all these measures are intended for 168 countries of the world and in no case had the goal of damaging trade relations with the Balkan neighbours. "We expect that in a week or two we will meet with colleagues from neighbouring countries and discuss the essence of the problem. So far, we have received only the official note of Serbia. Let's see what can be done to solve this issue," Tolusic told H1.
According to the Chamber of Commerce and Industry of Serbia, in 2016 the country exported goods to Croatia worth 116 million Euro. Meanwhile, imports from Croatia reached 79 million Euro. Serbian exports to Croatia are dominated by agricultural products, like vegetable oil, frozen vegetables and fruits. For Bosnia and Herzegovina, Croatia was the third most important export destination in 2016, only behind Germany and Italy (10.53% of the total value of exports). In the first three quarters of 2016, Bosnia and Herzegovina exported goods worth 722.47 million KM to Croatia (1KM = 0.5 Euro) and imported goods worth 1.17 billion KM.
Publication date: 8/9/2017
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