Croatia’s neighbours warn of trade war over new customs rules

Croatia’s neighbours warn of trade war over new customs rules
By bne IntelliNews August 7, 2017

Representatives of the governments of four Western Balkans states called on August 7 for Croatia to abolish discriminatory new customs measures and align them with market standards. 

Croatia expanded the list of fruit and vegetables coming from third countries, including its neighbours which are still not EU members, that will have to pass through phytosanitary checks at the border as of August 1. Under the new Croatian rules, taxes are 22 times higher now for these products — up from €12 to €270. Zagreb claims this is the only way to protect Croatian farmers, since the same rules can’t be applied to imports from its fellow EU members.

After their exporters were hit by the new measures, officials from Western Balkans countries met on August 7 to discuss their response to Croatia’s action. 

Ministers from Serbia, Bosnia & Herzegovina, Montenegro and Macedonia agreed that until the problem is resolved each country will implement its own measures in order to protect its own interests. They want Zagreb to either scrap the measures or harmonise the prices of inspection controls with the average amounts valid in countries in the region and the EU.

“No one wants a trade war, but the countries of the region will be forced to contravene if the issue of an increase in Croatian tax is not settled before the next meeting to be held by [August 14],” Serbia’s Deputy Prime Minister and Minister of Trade, Tourism and Telecommunications Rasim Ljajic said on August 7 after the meeting.

Serbia had appealed to Croatia to re-examine the decision a week ago, but no response came back, Ljajic said, reads a Serbian government statement

He added that a “very offensive explanation” of the decision was given by the Croatian side, after which Serbia began to apply certain types of sanitary and veterinary supervision, which will be strengthened. Belgrade has the right to do this under WTO rules.

The Serbian government said that officials agreed on seven conclusions and signed a joint letter to be sent to the European Commission.

The ministers noted that the move by Croatia violated the rules and principles of the WTO and the Stabilisation and Association Agreement (SAA), which prohibits discrimination. They asked for an urgent meeting with the relevant minister in Croatia, which they believe should be held by the end of this week in Podgorica.

The European Commission was invited to join in resolving the problem, and an agreement was reached that Montenegro and Macedonia, as members of the WTO, would initiate appropriate mechanisms within the organisation, the Serbian government said.

They agreed to organise such meetings regularly, so the next one will be held in Skopje in September, the government announced.

The meeting was attended by Deputy Prime Minister and Minister of Trade, Tourism and Telecommunications Rasim Ljajic, Minister of Foreign Trade and Economic Relations of Bosnia Mirko Sarovic, Minister of Economy of Montenegro Dragica Sekulic and Minister of Agriculture, Forestry and Water Management of Macedonia Ljupco Nikolovski.