Six months of blockade for Serbian goods in Kosovo: Hundreds of millions of euros in losses for both sides, affecting the entire region

It has been six months since the Government in Pristina decided to ban the entry of Serbian goods into Kosovo, and the losses for businesses on both sides of the administrative line are measured in hundreds of millions of euros. Citizens are also suffering from shortages and are forced to buy significantly more expensive products from other markets in the region. Despite numerous calls from the international community and both domestic and foreign companies operating in both Serbia and Kosovo, the Kosovo Government refuses to lift the blockade. Experts from Serbia and Kosovo warn that Pristina's economic barriers have consequences for the entire Western Balkans.
On June 15, the Kosovo Government unilaterally decided that products from Serbia could not be placed on the Kosovo market. This was a response to the arrest of three Kosovo police officers in central Serbia. While the officers have since been released pending trial, the ban on Serbian goods remains in place. Initially, a complete ban on Serbian products was in effect until July 8, after which a decision was made to apply the ban only to finished products, with exceptions for raw materials, semi-finished products, mineral fertilizers, animal feed, machinery, and equipment.
Official Belgrade has approached the European Commission, trade ministers of EU member countries, and representatives of the United States several times. The European Commission has called on the Pristina authorities to lift all restrictions on the movement of Serbian goods. The adverse effects of the blockade have been highlighted by the American Chamber of Commerce in Kosovo, as well as Serbian and Kosovo business associations, but without success.
Estimates suggest that, in the six months since Pristina imposed the ban on the entry of Serbian goods into Kosovo, the direct losses for Serbian businesses have reached 120 million euros, according to Bojan Stanic from the Strategic Analysis Sector of the Chamber of Commerce of Serbia.
He explains that the ban on final products sold in retail outlets is still in effect, primarily affecting the population in Kosovo. In addition to existing inflationary pressures, they are forced to buy less competitively priced products that must be imported from other countries in the region. Stanic points out that Serbian products on the Kosovo market, due to the ban, have mostly been replaced by goods from North Macedonia, Albania, Bulgaria, and even Montenegro.
"It should be emphasized that Serbian goods are the most competitive in Kosovo due to Serbia's economic orientation towards production, market size, and the ability to produce and market certain goods on a large scale. Looking at the period before the blockade, Serbia had relatively high trade with Kosovo, reaching up to 500 million euros annually", Stanic stated for Kosovo Online.
He says that the blockade still remains in force primarily due to the political disagreement between Belgrade and Pristina.
"This is, of course, related to the issue of the final status of Kosovo and Metohija. When we talk about the Pristina side, it should be emphasized that they violate the CEFTA agreement, of which they are also members, which stipulates free trade, regardless of political events. On the other hand, they undermine certain regional initiatives that go towards the economic integration of the region, such as the Berlin Process and the Open Balkan Initiative. And, of course, they undermine the interests of their own economy. Companies exporting goods from Serbia to the Kosovo and Metohija market are mostly foreign-owned, and they produce final products in the food industry, certain non-alcoholic beverages", Stanic states for Kosovo Online.
He emphasizes that the Serbian Chamber of Commerce has excellent cooperation with the Chamber of Commerce of Kosovo, which has also emphasized that political disagreements must be overcome for the economy to function, especially considering that it causes greater damage to the economy of Kosovo.
"For the simple reason that investments in Serbia continue to come. The blockade affects our companies that are oriented towards the Kosovo market, but on the level of the entire economy, it is not a significant problem. It is much more serious when discussing the attractiveness of Kosovo and Metohija for investments, not only from Serbia and the region but from a broader European area", our interlocutor points out.
He expects that the import ban will have to be lifted at some point.
"Based on previous experience, I think the blockade will be lifted at some point, which will be related to the progress of the negotiation process between Belgrade and Pristina, but certainly also under the pressure of mediators in that process, and that is the EU", Stanic says.
He also recalls the taxes that the authorities in Pristina previously imposed on goods from Serbia, which were in effect for a longer period than the current import blockade.
"When the taxes on Serbian goods were lifted, the volume of trade with Kosovo quickly returned to the level it was before that crisis, in about a year and a half. Especially when we talk about Serbia's exports to Kosovo, which are significantly higher than imports. It is one of the markets where we achieve a convincing surplus in trade. We also had informal campaigns, such as the call to boycott goods coming from Serbia, but they did not catch on with the local population, which continued to buy Serbian products", our interlocutor says.
However, he emphasizes that the crisis in relations between Belgrade and Pristina affects the attractiveness of the entire region because there is a question of whether these disagreements might spill over to other countries, and whether long-term uncertainty for investments might arise from it.
"The economy needs to overcome political disagreements. They can bring short-term benefits for politicians, but in the long run, economic potential is undermined, and the question is whether it can return to the level it was", Stanic concludes.
An economic expert from Pristina, Safet Gerxhaliu, states that the ban on the import of Serbian goods to Kosovo, which has been in place for a full six months, is causing harm to everyone. He emphasizes that this issue needs to be resolved as soon as possible because the European Union will not open its doors to those with unresolved problems.
Gerxhaliu, a former President of the Chamber of Commerce of Kosovo, states that economic problems cannot be discussed without political connotations, which are slowing down positive trends in the Western Balkans.
"We promote a common regional market, the elimination of various barriers, and the fulfillment of agreements within the Berlin Process, which involves the free movement of goods, services, capital, and people. Any barrier, whether between Kosovo and Serbia, Bosnia and Herzegovina, or Montenegro, Albania, and North Macedonia, does not contribute to the European perspective, and the normalization of relations in these regions. That's why the dialogue needs to be strengthened as soon as possible, officials should not only be photographed at events where problems are discussed but also provide concrete proposals for their resolution. Only in this way can we build a future and perspective. If we make a substantive analysis of who is losing and who is gaining - everyone is losing. No one benefits from barriers", Gerxhaliu states for Kosovo Online.
He points out that due to the ban, the import of goods from Serbia has decreased, but the problem is that this should not be viewed only through an economic dimension.
"Certain groups of products that Kosovo imports are American, German, and Austrian, and one should not think that they easily accept these barriers. Perhaps we have a drop in imports, but we also have a drop in the export of goods produced in Kosovo because we import certain raw materials and inputs from Serbia. In this context, this needs to be resolved as soon as possible, to build a future and trust, to have the spirit to one day be a part of the European Union. Europe will not accept barriers, it will not open doors to those who have unresolved problems", the economist states.
Commenting on the fact that the Kosovo Government led by Prime Minister Albin Kurti refuses the appeal of Kosovar businessmen and the international community to lift the embargo on Serbian goods, Gerxhaliu says that it has nothing to do with the economy but with politics.
"I think this decision has entered a completely different track, it is no longer about economic rationality but about the political position and the dialogue between Kosovo and Serbia. I think it has, willingly or unwillingly, entered that framework of problem-solving. Maybe it was a mistake in steps because you see that businessmen take more steps than politics. I fear that all this will somehow be delayed", Gerxhaliu says.
He also emphasizes that the issue of the embargo needs to be resolved as soon as possible because, as he says, "dialogue has no alternative, and efforts must be made to eliminate barriers rather than let them persist".
"We have become 'runaway states', the youth are leaving, visa liberalization comes into effect on January 1, we have no foreign investments, and it is evident that the common denominator in solving all problems is political stability. When you have political stability, you have new perspectives for direct investments, and until that happens, we will only produce that Balkan mentality that stifles perspective and instills more fear in the people about the future than it guarantees perspective", our interlocutor believes.
When asked if he expected the lifting of the embargo on Serbian goods, Gerxhaliu says that the Balkans suffer from a political agenda that leaves no room for integration, dialogue, and economic perspective.
"Everything is possible, but it depends on us the least. Today, the capital of the Western Balkans is Brussels, and the capital of Brussels is Washington, and a solution will be sought there", he concludes.
President of the Association of Entrepreneurs from Gracanica, Sasa Sekulic, says that there are no indications of when or if the decision to ban the import of Serbian goods will be lifted. He points out that, due to this poor political decision, products from central Serbia have been replaced by lower-quality and 20 to 30 percent more expensive products coming to Kosovo from other markets.
Both Serbian and Kosovar businessmen are urging the Kosovo authorities to lift the embargo imposed on June 15, and these messages are also conveyed by the international community. Sekulic recalls that two months ago, the American Chamber of Commerce in Kosovo also appealed to the Government in Pristina to reconsider and lift the decision to ban the entry of Serbian goods.
"We should ask the Kosovo Government why they are ignoring these appeals. This is a political decision that does not benefit either Albanian or Serbian entrepreneurs. Many American companies operating in Serbia are asking for this decision to be reconsidered and revoked. We, entrepreneurs, expect and hope that this will happen, that the Government in Pristina will finally understand the appeal that all entrepreneurs are making", he said for Kosovo Online.
Sekulic says it doesn't make sense to make decisions to ban the import of goods at the beginning of the 21st century while claiming to uphold certain European values.
"These two decisions do not go hand in hand. Otherwise, if the embargo remains in force, goods in Kosovo will be even more expensive because transportation plays a significant role in price formation. It is much cheaper to transport goods from Serbia than from Turkey or Poland", he emphasizes.
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