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Mircea Toader - Suspension of free trade agreement between Moldova and Romania will poise trade balance

Mircea Toader - Suspension of free trade agreement between Moldova and Romania will poise trade balance

19 June 2006

(BASA-Press) Suspension of the free trade agreement between Moldova and Romania on January 1, 2007, when Romania is expected to join the European Union (E.U.), will poise the trade balance between the two states, according to Mircea Toader, undersecretary of the Romanian Ministry of Economy and Commerce.

The foreign trade between Romania and Moldova totalled 412 million dollars in 2005, with a negative balance of 240 million dollars for Moldova. Exports to Romania turned over 85 million dollars last year, while imports accounted for 326 million dollars, according to Romanian statistics.

"The situation could change after January 1, 2007, as the Romanian export will be taxed in the same measure as other E.U. member states, while Moldova benefits of the GSP plus system which allows the exportation of about 7,200 names of products to the E.U. without paying customs duties," Toader stated to BASA.

The official estimated that the new trade regime "will affect the bilateral trade at a first stage until situation will normalise and companies will get used to the new taxation system." "Exports from Romania will be influenced more as they will be in a stronger competition with those of other European countries besides new taxes."

On the other hand, the Romanian official estimated that Moldovan small companies will be encouraged in continuation to cooperate with Romanian enterprises by "taking into account the territorial proximity, the same spoken language and other advantages in this regard."

Once Romania joins the E.U. on January 1, 2007, Bucharest will withdraw from all free trade agreements, including with Moldova. Romania’s entry in E.U. will mean the entry in a new legal framework of foreign commercial relations.

Besides the Central European Free Trade Agreement (CEFTA), Romania has signed free trade agreements with Moldova, Turkey, Israel, Serbia-Montenegro, Albania, Bosnia and Herzegovina, and the European Free Trade Association.

Chisinau says that the suspension of the free trade agreement with Romania will not affect the trade exchanges, being optimistic to obtain an asymmetrical trade regime with the E.U. in 2007.