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Serbia-Eurasian Economic Union free trade agreement enters into force

Foreign Brief | 10 July 2021

Serbia-Eurasian Economic Union free trade agreement enters into force

by Daniel Rice

Serbia’s free trade agreement with the Eurasian Economic Union (EAEU) enters into force today.

Today’s free trade agreement replaces current bilateral agreements with EAEU members, most notably Russia. Serbian bilateral trade with the EAEU’s leader, Russia, amounted to $3.41 billion in 2019 and makes up roughly 90% of Serbian trade with EAEU member states. Agricultural products account for more than half of Serbian exports to Russia.

Once Serbia formally joins the EU, they will be forced to withdraw from this new free trade agreement.

The short-term free trade economic zone created today will make 99% of Serbian goods exported to the EAEU market duty free. Low-cost exports will very likely increase Serbian trade with Kazakhstan, Belarus, Armenia and the Kyrgyzstan in the very short-term, especially in agricultural products.

Opening further opportunities for Serbian-Russian agricultural trade is a key goal of this agreement. In the short-term, Russia will likely take advantage of the free trade zone to diversify exports to Serbia away from oil and towards high quality food products. In the medium-term Russian agricultural companies will likely seek to increase investment in Serbia—before Serbian EU ascension—with an eye towards exporting goods Serbia produces to the EAEU market.

 source: Foreign Brief