Tax-News.com, Brussels | 05 August 2013
EU Criticises Impasse In Bosnia Trade Talks
by Ulrika Lomas
The European Commission says that it regrets the ongoing stalemate in trade talks with Bosnia and Herzegovina.
In light of Croatia’s accession to the European Union (EU), negotiations are being held to adapt the EU-Bosnia and Herzegovina Stabilization and Association Agreement (SAA). The European Commission alleges that Bosnia and Herzegovina refuses the EU’s methodology, which it says consists of a purely technical adaptation, to take into account Bosnia and Herzegovina’s traditional trade with Croatia under the Central European Free Trade Agreement (CEFTA).
This methodology also means that trade concessions applicable to the EU’s 27 existing member states are adjusted by the trade flows of Bosnia and Herzegovina and Croatia, in order to reflect the situation of an enlarged EU-28. The Commission claims that the adaptation is of a purely mathematical nature, and will help maintain trade conditions. It warns that fundamental changes to concessions and duties would only disturb regional markets, and impact negatively on Bosnia and Herzegovina’s trade with the EU.
Bosnia and Herzegovina is able to export all categories of products freely to the EU. However, as no agreement has been reached on changes to the SAA, Bosnia and Herzegovina has begun to impose what the Commission calls substantial import duties on agricultural products from Croatia.
The Commission claims that this is not in line with the spirit of bilateral free trade as provided for in the SAA, and represents a step backward. It is also concerned that the impasse will delay the establishment of a common free trade area within the EU-28.
The Bosnia and Herzegovina negotiating team has asked for reciprocity in the negotiations, and the Commission concedes that it would agree to this principle. The aim would be for Bosnia and Herzegovina to provide the EU with the same level of concessions as the EU grants it, for all products set out in the agreement. It has not requested immediate symmetrical full trade liberalization.