The ban on Serbian goods in Kosovo has been in effect for a full year, with the EU standing idly by

Rafovi u prodavnicama
Source: Kosovo Online

Establishing a common regional market in the Western Balkans has been a goal set since 2020 within the Berlin Process. Creating such a market is also implied by the recently formalized European Growth Plan for the countries of the region. However, European promoters of this idea are not particularly concerned that the decision of the Kosovo government to ban the import of Serbian goods has been in effect for a full year.

The ban was imposed on June 14th last year, and Serbian companies have suffered losses of at least 216 million euros so far. The ban has also affected traders in Kosovo who imported goods solely from Serbia, leading to the closure of some companies. However, the most affected are the citizens who were accustomed to using Serbian products. Products from other countries are now available in stores, but, as residents of several places we talked to complain, they are often of lower quality and more expensive.

"It's hard to come by processed meats and meat. Essentially, they limit you to use only one type of meat, which was never the case. Abroad, you have the opportunity to get any type of meat. To me, it's nonsense that they care about where things come from. Let people buy from where it suits them, which, presumably, is possible in every country," complained a resident of North Mitrovica.

Mirjana Mitic from Laplje Selo says they are deprived of quality products.

"We miss the quality, what we were used to, dairy products, 'Plazma', creams, all the good things we grew up with. Now we buy what we have to," Mitic told us.

Minister of Internal and External Trade of Serbia, Tomislav Momirovic, said today that it is "terrible that in the 21st century we witness in Europe, built on the foundations of a common market and the free movement of goods and services, a regime that has banned people from trading and economies from progressing."

"This disastrous political decision has led to job losses, the severing of decades-long business ties between Serbs and Albanians, as well as the loss of hundreds of millions of euros in business revenue," said Momirovic, who also noted that over the past 12 months, he has sent four letters to all trade ministers of EU member states, as well as trade ministers of the US, the UK, and Canada, warning them about the detrimental policy that restricts the flow of goods and economic cooperation and development.

The American Chamber of Commerce in Kosovo has repeatedly last year called on the Kosovo government to "urgently review" measures that restrict imports from Serbia. Tomás Szunyog, head of the EU Office in Kosovo, recently said that their "interpretation is that this should be a short-term measure and not last nearly a year," but the ban remains in place.

Political scientist Ognjen Gogic told Kosovo Online that it is inexplicable why the decision of the Kosovo government has not received adequate attention from the international community during all this time.

As he points out, it violates the CEFTA agreement and other trade agreements and geo-principles of free trade.

"It violates a whole range of obligations that Kosovo has in relation to its partners. It is contrary to the efforts to promote economic regional cooperation, primarily through processes such as the Berlin Process or the common market that is being promoted. So, it is not possible to simultaneously move towards some kind of single market, some kind of deeper economic integration, and have a situation where Kosovo prohibits the import of Serbian goods. It has not been mentioned in the reports nor was it cited as a reason for the imposition of sanctions on Kosovo, although it is very controversial," Gogic said.

He says that this ban is controversial because it has harmed the standard of living, especially of the Serbian population which is used to products from Serbia, but now has surrogates.

"Lower-quality goods have also arrived, which the population was not accustomed to. This then affected the operations of economic entities in Serbian areas, both in trade and hospitality, and overall led to further economic decline in Serbian areas. This measure also has a component of human rights violation, and it remains in force despite actually representing a flagrant violation of the rule of law. Even when Kosovo was in the process of accession to the Council of Europe, the issue of the ban on Serbian goods was not raised, which should have been a topic before the Council of Europe," Gogic assesses.

He also emphasizes that the ban on the import of Serbian goods is an unlawful measure that was only imposed orally, not as a legal act, because he believes that such a document would likely be challenged before the Constitutional Court.

Executive Director of the Center for Advocacy of Democratic Culture, Dusan Radakovic, also told Kosovo Online that he does not understand why the international community turns a blind eye to Pristina when it comes to the ban on the import of goods from Serbia to Kosovo, because this decision, as he says, harms all communities.

"Why the European Union, the American embassy, and institutions tolerate this, I don't know. Occasionally, every two to three months, ambassadors speak out, but very vaguely. The ban on the import of goods was imposed in a very questionable manner, literally by oral order, by phone. And to this day, we do not know if there is any written decision on this. Why the international community tolerates this is very questionable," Radakovic said.

He adds that it is an abnormally huge damage suffered by citizens, as well as Serbian and Albanian companies engaged in import and export.

"I think this is damage to all people in Kosovo," he says.

According to analyses from the Chamber of Commerce and Industry of Serbia, as stated to Kosovo Online by the head of the Regional Cooperation Center of the Chamber, Aleksandar Radovanovic, the losses of Serbian companies due to the ban on the import of their products to Kosovo amount to around 216 million euros.

As he explains, these are the minimum costs because indirect costs due to redirecting goods to other markets, connecting with other suppliers, and problems with contract fulfillment are not included.

"As for the other side, they are also losing significantly because smaller and weaker economies are always more vulnerable groups, and this has greatly affected their manufacturing sector as supply chains were interrupted at one point and production stopped. Trade supply chains were also interrupted. Kosovar producers had to look for these products from other, more distant, markets at higher prices, which significantly affected the price of products, and ultimately inflation, which according to statistics from Kosovo, amounted to 11.3% for consumer goods. In other words, prices in Kosovo have increased by that much," Radovanovic said.

He reminds that on June 14 last year, the ban initially applied to all products, but when the Kosovo authorities realized they had created a major problem for their production sector, the measure was eased on July 8. It was decided that the ban would not apply to raw materials, mineral fertilizers, animal feed, cereals, and products not subject to VAT.

"I would like to remind you that out of Serbia's total exports, exports to Kosovo account for only 1 percent, so the Kosovo market is not that big for us. It is significant for small companies that have only Kosovo as a destination for their products. But large companies manage, especially if they have production in the region, they redirect their placements from the region to Kosovo, not from production facilities in Serbia but from, for example, North Macedonia, Montenegro, Bosnia, and other countries in the region," says Radovanovic.

Regarding the time needed for the situation to normalize if the measure of the Kosovo authorities were lifted, he says that it would take quite some time.

"After the 100% tax on Serbian products was lifted, it took about a year and two, three months to completely recover the placement and to return to the level that was before the introduction of those taxes. This is already the third time we have had interrupted cooperation, not because it is in the interest of the economy, but because these are, if I may say so, unreasonable political and uneconomic measures," Radovanovic says.

President of the Business Alliance of Kosovo, Agim Sahini, says that the ban, which has been in place for a year, must be resolved at the political level because its introduction was also a political decision.

"During the year of the ban on the import of Serbian goods to Kosovo, both Kosovo and Serbia have incurred significant losses. If we look at the statistics, in 2022, we had mutual trade worth more than 443 million euros, and during the past year, about 256 million euros, which means that trade has dropped by about 50 percent. Percentage-wise, if we previously imported more than 6.7 percent of goods from Serbia, last year we imported around 3.4 percent, and the export from Kosovo to Serbia also dropped. Last year, we had exports of goods of about 5.9 percent, and the year before, in 2022, more than 7 percent," Sahini said for Kosovo online.

Goods that used to come from Serbia, he said, are now coming from other countries, and some groceries in Kosovo have become more expensive than when there was import from Serbia.

"The most damage was suffered by Serbian producers and Serbian citizens living in Kosovo, who were accustomed to using products from Serbia, but also Albanians were consumers of those products. If we look only at 2022, we imported goods from Serbia worth 372 million euros, and it was used for general consumption throughout Kosovo. The citizens of Kosovo buy goods that are from Serbia, Albania, or North Macedonia; it is important whether it is of good quality and competitive with prices. In our opinion, this is no longer necessary; all this hinders the movement of goods, capital, and people. In my opinion, every consumer should choose the goods they will use," Sahini said.

He adds that Kosovo companies, especially in the beginning, incurred losses until the Kosovo government changed part of the decision so that the ban does not apply to the import of raw materials from Serbia. He says that the most affected were the traders who imported goods only from Serbia, and several companies representing Serbian goods in Kosovo have closed.

He states that traders from Kosovo have found other countries from which to import goods and that last year, Kosovo had a trade exchange with Albania exceeding 440 million euros, which, he says, means that the level that existed with Serbia in 2022 has been reached.

The measure of the Kosovo government, let's recall, initially applied to the entry of trucks from Serbia into Kosovo and was justified by "security reasons" because the Serbian police arrested three Kosovo police officers. The decision, as stated at the time, would be in force until a new security assessment. Very quickly, the ban was lifted for raw materials while it remained in force for finished products. Kosovo police officers were released from detention in Serbia on June 26, when the Court in Kraljevo confirmed the indictment against them.