Free Trade Agreements (FTAs) are the instruments that facilitate investment, business and networking between countries. Serbia has concluded such agreements with many countries and regions, but some domestic businessmen consider them formal and think that they actually don’t work. However, this opinion is far from the truth.
In fact, the Serbian Free Trade Agreements fulfill their purpose quite well: they attract investments in Serbia’s economy, strengthen the ties between the East and the West, and create the most favorable conditions for cross-border trade.
Here is a list of countries and regions that have signed Free Trade Agreements with Serbia:
- CEFTA countries (The Central European Free Trade Agreement: Albania, Bosnia and Herzegovina, North Macedonia, Moldova, Montenegro)
The obvious benefits of Free Trade Agreements with each of these countries include duty free import and export operations. Serbia has a truly unique position as the crossroads between the East and the West, and Free Trade Agreements serve as friendly gates connecting all these multiple routes.
Serbia’s Free Trade Agreements
As we’ve seen above, the major trading partners have signed the agreements, and the total number of countries interested in strengthening trade ties with Serbia is constantly growing. Investments in the trade will boost the country’s economy, which is extremely important in the light of Serbia’s expected accession to the European Union.
Free Trade Agreement between Serbia and the European Union
The European Union is Serbia’s main trading partner. Under the trade agreement, the import and export operations are duty free, which is a serious advantage for intense trading.
Serbia has so far managed to strike a balance by maintaining good relations with both the European Union and Russia, which is not that easy in the current geopolitical situation. Serbia refused to join the sanctions against Russia, so its prospects of joining the EU in the early fall look dimmer than before. However, the situation is changing so quickly that we would not risk to predict anything with confidence.
Free Trade Agreement between Serbia and Russia
The existing agreement between the countries is extremely beneficial for trading companies operating in the manufacturing sector. Goods exported to Russia are not subject to customs duties, but the record-keeping tariff still applies (1%). If the geopolitical situation in Europe accelerates the rapprochement of the two countries (to the detriment of EU accession plans), additional agreements will surely be signed, but it would be premature to talk about it now.
Free Trade Agreement between Serbia and the USA
Goods produced in Serbia and imported into the United States are free from customs duties according to the Generalized System of Preferences (GSP). However, the document has expired and is currently pending renewal. The Free Trade Agreement provided most benefits to the exporters of industrial and agricultural goods.
Free Trade Agreement between Serbia and CEFTA countries
Under the agreement, Serbian companies can freely enter the market with a potential capacity of 22 million people without the need to pay customs duties. There is an exception to this rule (fish and seafood), which does not override the general positive effect of the agreement.
Free Trade Agreement between Serbia and Turkey
Industrial goods of Serbian production can be exported to Turkey without duties. As a rule, industrial goods imported to Serbia are not subject to customs control, but duties are being gradually canceled as well for this category. However, there are products that are still imported and exported with customs duties levied. These include agricultural, textile and some metallurgy goods, with some of them being subject to Most Favored Nation reductions.
Free Trade Agreement between Serbia and Belarus
The agreement provides only a few exceptions (sugar, alcohol, cigarettes, used cars, tires), while the rest of the product categories are free from duties. However, we have to admit that the trade turnover between the countries is still quite low and does not even reach USD 200 million. However, given the close ties between Russia and Serbia, as well as the prospects for the unification of Russia and Belarus, the two countries definitely have a potential.
Free Trade Agreement between Serbia and Kazakhstan
Under the respective Free Trade Agreement, the customs duties are abolished in cases when the goods transported across the border were manufactured in one country to be sold in another one. However, there is a list of exceptions in the annexes to the Agreement, with customs duties for such products payable in an ordinary procedure at the official national rates.
Free Trade Agreement between Serbia and the UK
England is a priority partner for Serbia as Britain’s investment in its economy allows the country to thrive and avoid recession in the current geopolitical situation. Trade relations between the two countries are actively developing with focus on the free trade zone. They may be ruined to some extent by Serbia’s unwillingness to participate in the sanctions against Russia, but neither side has yet officially declared that investments will depend on this factor.
By Way of Conclusion
Serbia is a business-friendly country, and this fact does not need further proof. Free Trade Agreements do strengthen its status and make investment in Serbia even more profitable. The status of a ‘transshipment base’ between the East and the West is definitely the main advantage of the jurisdiction that distinguishes it from other European countries. This situation may become decisive against the background of sanctions against Russia.
But even ordinary operations under Free Trade Agreements in Serbia make it one of the potential leaders in terms of foreign investment attraction. The country has adopted pro-business laws and its economy is actively developing, which makes Serbia a very appealing choice for business opportunity seekers.
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