Wednesday, August 03, 2005

Kosovo, Macedonia Enter Free Trade Deal

Kosovo began the provisional implementation of a free trade agreement with neighboring Macedonia on Wednesday, according to a U.N. statement.

Kosovo's customs authorities will continue to collect taxes on oil and some agricultural products with tariffs gradually decreasing until 2008, and Kosovo's products will have duty free access to Macedonia's market, the statement said.

The implementation of the deal follows months of negotiations between U.N. and government officials in Kosovo and Macedonia authorities. The agreement was concluded more than a month ago, but Macedonia has not yet formalized it, officials said.

The U.N. mission "is starting to provisionally implement the free trade agreement to not cause delays for Kosovo's economy to benefit from it," said Mechthild Henneke, a U.N. spokeswoman. "We understand that authorities in Macedonia are continuing to consider the documentation that will formalize the agreement."

Kosovo has been administered by the United Nations for the past six years following NATO's air war aimed at stopping the crackdown of Serbian troops on the province's separatist ethnic Albanians.

Since then, Kosovo has remained split between ethnic Albanians who want it to be independent and ethnic Serbs who want it to remain part of Serbia.

Kosovo's economy remains in tatters, with unemployment estimated at more than 50 percent. The province has had a free trade pact with Albania since mid-2003.

6 comments:

Chris Blaku said...

It is enlightening to see UNMIK actually get something done for the province.

Anonymous said...

Good, let's get the economy roling!

Ibro said...

The above comments (like most of them in this blogg) are narcissist to say the least. Everything is viewed as fantastic for Kosovo. Impression is that situation in Kosovo is better than in Japan, USA, Switzerland etc.
This same free trade with Macedonia has already proven to be very bad move for Albania. Farmers in Albania are suffering because they cannot compete with the more advanced agriculture system of Macedonia. Quality is of no importance right now for the mass markets in Albania and Kosovo. There is nothing that Albania can export to Macedonia, for the time being. I can see the same thing happening with Kosovo as the agriculture and manufacturing industry is in worse (or was it ‘worst’ Chris) state than in Albania. Instead, Kosovo should gather taxes and duty from imports from Macedonia and use that to subsidise agriculture and industry in general. Only if you are competitive free trade works, otherwise it will be a one sided affair. But I’m sure you’ll interpret that as Russia,China and Old Continents fault because everybody hates you.

Chris Blaku said...

Ibro, in which post do you see bloggers viewing progress as fantastic for Kosova. And where in the world do you see anyone comparing Kosova's situation to that of Japan, USA or Switzerland? The Albanians retain the right to defend the smearing of their nation for faults that are not theirs. The economic progress of Kosova is based solely on UNMIK, not Kosovar politicians who lack functional decision making powers to affect any particular outcome or any progress.

Perhaps you misread the report, it stated that Kosova's custom authorities would collect taxes on oil and most agricultural products, and taxes would increase gradually by 2008, and Kosova's products would have duty free access to Macedonia's markets. It seems overwhelmingly in favor of the Kosovars, who have a free trade agreement with Albania alone.

Until formal independence is recognized, Kosova's economy will continue to remain volatile and in turmoil. There are various economic models which may be adopted for the situation in Kosova, most of which would have to undergo a degree of adjustment given the province's unique characteristics. Priority should be given to the excavation of resources, and proceeds should be directed to civil services and particularly, education. Corporate taxes should be kept minimal to promote strong capital investments from regional and international companies, rather than adopting the more Socialist European model of high taxation, which drives businesses to places like Ireland rather than France. The Government would be wise to offer incentives to foreign companies, as well as local business owners, to create wealth and distribute it amongst the province.

Things are not as peachy as you claim we say Ibro, but you cannot blame the Albanians for Serbian mismanagement of Kosova for a century, or reasonably expect the Albanians to turn it around in six years, with all decisions having to go past UNMIK.

Anonymous said...

Serbia has prospered so much from its protectionist policies throughout the years. It's funny to see how undeveloped it has remained for a country that was the hegemon of the Balkans for almost a century.

It has been proven that only free trade can make a small country such as Kosova grow. This free trade agreement is an incentive for Kosovar farmers (once the tariffs are totally gone) to produce and be competitive if they want to survive. IMposing taxes does no good to Kosovars. As a result of those taxes, consumers pay more, and the farmers remain inefficient.

Furthermore, Koosva has a lot to export. It used to export to the Western Europe, of course before Serbs decided to take their destructionist policies to a higher level. We are not worries about countries like Serbia whose only comparative advantage is prostitution and drugs, we are good at other things.

Undefined status and Serb-caused instability is staying on the way of economic growth, which is mainly done through investment. In Kosova the number of engineers and doctors graduating every year is higher than anywhere else in relative terms. We are NO chinese to work for 10cents/day. WE have a skilled labor force and soon will produce goods for your country.

Best,
F

arianit said...

Ibro my man,

Free trade deal is just that, a deal. Areas of comparative advantage on both sides of the border have been identified and those markets have been opened so that each country specializes on them. You turned the deal upside down, becuase this deal is not about Macedonia, Albania, and Kosova competing with each other in every field, but rather a fusion of the markets so that each of the 3 specializes in certain fields and thus send Serbia into bankruptcy.
As we say, there is no bread in tomatoes. Agriculture is highly subsidized, and you don't see Ireland competing in tomatoes. They have left that to Grease to brag about.
You're welcome to invest in Kosova (http://www.eciks.org/).