Kosovo-Serbia trade embargo lifts, consequences unclear

The first trucks entered Kosovo from Serbia through the Merdare border in Podujevo, 30km northeast of Pristina, on Friday (September 16th), as the agreement on customs stamps was initiated.

According to EULEX, the agreement was the last missing piece needed to relaunch a proper customs system. Kosovo became a single customs area under UNMIK in 2000, and has been regarded as such by the EU ever since.

All commercial goods that are subject to excise taxes — alcohol, cigarettes and fuel — have to be cleared at the Merdare crossing point or at any other crossing authorised for commercial traffic.

Some say the embargo between the two countries have damaged the trade relations, but expect companies to regain their markets.

Trade expert Driton Ahmetaj told SETimes that in the next few weeks, companies will try to attract consumers through cheaper prices to be able to get the market.

“Companies are ready to launch a campaign to regain the lost markets. For Serbian companies, Kosovo is an important market, while Serbia is important for Kosovo companies as it is close and can be used easily as a transit country,” Ahmetaj said.

Balkan Policy Institute Executive Director Seb Bytyci told SETimes that both sides will benefit from the customs deal and embargo lifting.

“The customs deal firstly will enable Kosovo’s goods to enter Serbia, and to reach their target markets in Serbia or the EU without impediments. This is positive news for those companies that lost their markets after Serbia banned Kosovo goods entering or transiting its territory in 2008. Secondly, Serbian products will be able to enter Kosovo, and this can be good news for consumers, because they are often cheaper than other products of same quality,” Bytyci said.

Bytyci is convinced that Serbian products will regain their market — lost during the nearly two-month long embargo.

“This period was an opportunity for local producers to gain a bigger share of the market, and for new foreign products to enter the market. But ultimately, their market share will depend on price and quality.”

Ahmetaj says that if they want to compete with Serbian products, Kosovo producers need to work on more better quality.

Blerim Gjonaj a trader in Pristina told SETimes that he expects to have problems selling Serbian products.

“There has been some campaigns not to buy Serbian products, and we as traders will face the challenge to sell Serbian product or not. If yes will we get loss or what? I will wait to see how the consumers react and then I will decide to sell Serbian products or not,” says Gjonaj.

Ahmetaj says that the price and quality should play a role — not prejudices.

“Kosovo must made all efforts to enable products from every country to have equal treatment in the market, and quality and the price should decide if a product should be sell or not. The EU and both governments should create necessary mechanisms to observe the implementation of the deal and to see how the markets react,” Ahmetajv said.

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