Radovanovic: Losses of Serbian companies due to the import ban to Kosovo amount to around 216 million euros

The head of the Center for Regional Cooperation of the Serbian Chamber of Commerce, Aleksandar Radovanovic, told Kosovo Online that, according to PKS analyses, the losses of Serbian companies due to the import ban of their products to Kosovo, which has been in effect for a full year, amount to around 216 million euros.

As he explains, these are the minimal costs, as they do not include indirect costs due to redirecting goods to other markets, connecting with other suppliers, issues with contract fulfillment, and so on.

"Regarding the other side, they also suffer significant losses, as smaller and weaker economies are always more vulnerable. This ban has greatly impacted their production sector because their supply chains were interrupted at one point, causing production to halt temporarily. Supply chains for trade were also disrupted. Kosovo businesses had to seek these products from other, more distant markets at higher prices, significantly affecting the product prices and ultimately leading to inflation. According to Kosovo's statistics, inflation for consumer goods was 11.3 percent, meaning that prices in Kosovo have risen by that amount," Radovanovic stated.

He recalls that on June 14th of last year, the ban initially applied to all products, but when the Kosovo authorities realized they had created a significant problem for their production sector, the measure was relaxed on July 8th. The decision was made that the ban would not apply to raw materials, mineral fertilizers, animal feed, grains, and products not subject to VAT.

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

When asked how long it would take for the supply situation to normalize if the Kosovo authorities' measure were lifted, he says it would take a considerable amount of time.

"After the removal of the 100 percent tariff on Serbian products, it took about a year and two to three months for the supply to fully recover and return to the level before the introduction of those tariffs. It takes time for companies that import products from here to terminate their cooperation with companies that replaced Serbian products and to make new contracts with Serbian companies. This is already the third time that we have had interrupted cooperation, not because it is in the interest of the economy but due to, if I may say so, unreasonable political and non-economic measures. To ban the free movement of goods is truly against all principles of free trade and the CEFTA agreement, which governs economic relations between Serbia and Kosovo. So it will take time to restore everything to the normal level of cooperation," Radovanovic concludes.