REPUBLIC OF CROATIA Ministry of Agriculture Fisheries and

REPUBLIC OF CROATIA Ministry of Agriculture, Fisheries and Rural Development Trade in border areas: CEFTA 2006 Miroslav Božić, Director East Agri Annual Meeting, Istanbul, 13 -14 October 2010

“Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular. ” Thomas Macaulay (19 th century)

Contents: – Establishment of CEFTA 2006 – Scope and objectives of CEFTA – Experience gained: Benefits and challenges – Future of CEFTA: Outlook into EU integration

Initiatives to promote cooperation in South-East Europe • Launched during the 1990 s with the aim to promote peace and stability in the region of SEE • Tipically established at the initiative of other countries (eg. SECI (USA), Stability Pact (EU)) and donor funded • Usually promoted political and different aspects of economic cooperation (trade, SMEs, energy…) • Based on declarations rather than binding agreements • After 2000 increased pressure on the countries of the region to undertake stronger commitments History CEFTA today Future

From Visegrad to “CEFTA 2006” History CEFTA today Future • Nov 2005 – Zagreb Declaration: membership criteria for new CEFTA • Apr 2006 – Bucarest Declaration: negotiating principles • Dec 2006 – CEFTA 2006 Agreement signed • Jan 2007 – CEFTA 2006 Agreement enters into force

Parties to CEFTA 2006 Agreement: global perspective CEFTA 2006 World Territory km 2 Population GDP EU 27 total as % of world as % of EU 27 148. 940. 000 4. 324. 782 298. 271 0, 2 6, 9 million 6. 874, 3 502, 1 27, 0 0, 4 5, 9 million USD 57. 843. 376 16. 388. 122 158. 648 0, 3 1, 0

Objectives of CEFTA 2006 History CEFTA today Future • Establish a free trade area in conformity with WTO rules and procedures • Consolidate in a single agreement the existing level of trade liberalisation • Improve conditions for investment • Eliminate barriers to and distortions of trade • Gradually open gover. procurement markets • Provide protection of intellect. property rights • Provide effective procedures for implementation of the agreement

Building blocks of CEFTA 2006 Competition rules Ro. O EU aquis CEFTA + bilaterals SPS, TBT Liberalisation of trade in goods Joint Declaration WTO New Trade Issues Contingent Protectionism

BENEFITS … History CEFTA today Future • Trade within CEFTA increased, however, share of trade with other partners much higher (EU) and is likely to increase • Cumulation of origin (within Cefta and outside) • CEFTA inspired other types of cooperation between countries (eg. Cooperation of chambers of commerce) • Better environment foreign direct investments … LIMITATIONS • • CEFTA is primarily a trade agreement and CEFTA is not linked to other issues such as movement of people or countries’ relations to other partners (eg. EU)

Share of CEFTA in trade of non-agricultural products (%) 10 0, 2 28 13 37 7 Source: CEFTA Parties trade statistics 16

Share of CEFTA in trade of agricultural products (%) 22 76 0, 8 53 38 8 Source: CEFTA Parties trade statistics 40

Challenges in implementation • All decisions must be made unanimously History CEFTA today Future • Implementation of decisions blocked because of political issues between Serbia and Kosovo (eg. further liberalisation in agriculture agreed but not implemented) • CEFTA Parties in different stages of international integration missunderstanding and different interpretaiton of CEFTA provisions

Outlook into EU integration WTO membership SAA signed EU accession process 2000 2006 application for membership submitted in 2009 negotiations since 2003 2008 - Croatia 2000 2001 candidate since 2004, accession negot. to be concluded 2010/’ 11 Kosovo - - - Macedonia 2003 2001 candidate since 2005 Moldova* 2001 1998 - Montenegro negotiations since 2005 2007 application for membership submitted in 2008 Serbia negotiations since 2005 2008 application for membership submitted in 2009 Albania Bosnia and Herzegovina * Moldova concluded Partnership and Cooperation Agreement with the EU

CEFTA future History CEFTA today Future • CEFTA Parties candidates or potential candidates for membership in the EU • Accession of Parties to the EU year 20 XX CEFTA ceases to exist!

THANK YOU FOR YOUR ATTENTION. READY TO TAKE UP QUESTIONS!

Republic of Croatia Ministry of Agriculture, Fisheries and Rural Development Zagreb, Ulica grada Vukovara 78 Tel. (00 385) 1 6106 600 Fax. (00 385) 1 6109 200 www. mps. hr m. bozic@mps. hr