EC warns Bosnia over continuing deadlock of bilateral trade talks after Croatia's EU entry

By bne IntelliNews August 2, 2013

The European Commission (EC) said the deadlock in the ongoing talks with Bosnia on the adaptation of its bilateral trade regime following Croatia’s accession to the European Union (EU) might result in disturbance of Bosnia’s trade with EU countries.

Bosnia and the EU are currently negotiating the adaptation of the EU-Bosnia Stabilisation and Association Agreement (SAA) and its Interim Agreement after the entry of Croatia in the EU on July 1, 2013. However, according to the statement, Bosnia refuses the proposed EU methodology, which implies that trade concessions applicable to the EU with 27 member states are adjusted by the trade flows of Bosnia and Croatia in order to reflect the situation of the enlarged EU-28.

The establishment of a common free trade area within the EU28 could be delayed, while Bosnian citizens will have to pay higher prices for products traditionally imported from Croatia, the EC said in a statement.

 “The European Commission regrets the current attitude of Bosnia and Herzegovina, which is not in line with the spirit of bilateral free trade as it is provided for in the SAA and the Interim Agreement. The effective establishment of bilateral free trade is one of the cornerstones on a country's path to EU membership. The current attitude is a step backwards”, the EC underscored.

The adjustment of the bilateral trade regime is of a purely technical nature, the EC said. It will help maintaining the trade conditions without disturbing the regional markets whereas fundamental changes to the concessions and duties regime would likely negatively impact the existing bilateral trade of Bosnia with the EU.

The EC is ready to accept the principle of reciprocity in these negotiations as asked recently by the head of Bosnia’s negotiating team, Dragisa Mekis. The principle of reciprocity implies that the country provides to the EU the same level of concessions that the EU is granting to Bosnia for all products set out in the bilateral agreement.

“However, in consideration of the fragile economy of Bosnia and Herzegovina, the Commission has never requested the country – and in particular not under the current negotiations - to immediately achieve a symmetrical full trade liberalisation.”, the statement underscored.

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