Trade in border areas: CEFTA 2006 REPUBLIC OF CROATIA Ministry of Agriculture, Fisheries and Rural Development Miroslav Božić, Director East Agri Annual Meeting, Istanbul, October 2010

“Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular.” Thomas Macaulay (19th century)

Contents: –Establishment of CEFTA 2006 –Scope and objectives of CEFTA –Experience gained: Benefits and challenges –Future of CEFTA: Outlook into EU integration

History CEFTA today Future Initiatives to promote cooperation in South-East Europe Launched during the 1990s with the aim to promote peace and stability in the region of SEE Tipically established at the initiative of other countries (eg. SECI (USA), Stability Pact (EU)) and donor funded Usually promoted political and different aspects of economic cooperation (trade, SMEs, energy…) Based on declarations rather than binding agreements After 2000 increased pressure on the countries of the region to undertake stronger commitments

History CEFTA today Future From Visegrad to “CEFTA 2006” Nov 2005 – Zagreb Declaration: membership criteria for new CEFTA Apr 2006 – Bucarest Declaration: negotiating principles Dec 2006 – CEFTA 2006 Agreement signed Jan 2007 – CEFTA 2006 Agreement enters into force

Parties to CEFTA 2006 Agreement: global perspective WorldEU 27 CEFTA 2006 total as % of world as % of EU 27 Territorykm ,26,9 Population million 6.874,3 502,1 27,00,45,9 GDP million USD ,31,0

History CEFTA today Future Objectives of CEFTA 2006 Establish a free trade area in conformity with WTO rules and procedures Consolidate in a single agreement the existing level of trade liberalisation Improve conditions for investment Eliminate barriers to and distortions of trade Gradually open gover. procurement markets Provide protection of intellect. property rights Provide effective procedures for implementation of the agreement

Building blocks of CEFTA 2006 WTO CEFTA + bilaterals EU aquis Competition rules RoO SPS, TBT Liberalisation of trade in goods Joint Declaration New Trade Issues Contingent Protectionism

History CEFTA today Future BENEFITS … CEFTA is primarily a trade agreement and CEFTA is not linked to other issues such as movement of people or countries’ relations to other partners (eg. EU) Trade within CEFTA increased, however, share of trade with other partners much higher (EU) and is likely to increase Cumulation of origin (within Cefta and outside) CEFTA inspired other types of cooperation between countries (eg. Cooperation of chambers of commerce) Better environment for foreign direct investments … LIMITATIONS

100, Share of CEFTA in trade of non-agricultural products (%) 37 Source: CEFTA Parties trade statistics 13 7

22 0, Share of CEFTA in trade of agricultural products (%) 76 Source: CEFTA Parties trade statistics 38 8

History CEFTA today Future Challenges in implementation All decisions must be made unanimously Implementation of decisions blocked because of political issues between Serbia and Kosovo (eg. further liberalisation in agriculture agreed but not implemented) CEFTA Parties in different stages of international integration  missunderstanding and different interpretaiton of CEFTA provisions

WTO membershipSAA signedEU accession process Albania application for membership submitted in 2009 Bosnia and Herzegovina negotiations since Croatia candidate since 2004, accession negot. to be concluded 2010/’11 Kosovo--- Macedonia candidate since 2005 Moldova* Montenegro negotiations since application for membership submitted in 2008 Serbia negotiations since application for membership submitted in 2009 * Moldova concluded Partnership and Cooperation Agreement with the EU Outlook into EU integration

History CEFTA today Future CEFTA future CEFTA Parties candidates or potential candidates for membership in the EU Accession of Parties to the EU  year 20 XX CEFTA ceases to exist!

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Republic of Croatia Ministry of Agriculture, Fisheries and Rural Development Zagreb, Ulica grada Vukovara 78 Tel. (00 385) Fax. (00 385) m.