Multilateral Policy and Relations, International Free Trade Agreements and GSP

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1 Republic of Serbia Negotiating Group on External relations BILATERAL SCREENING MEETING Chapter 30 External relations Multilateral Policy and Relations, International Free Trade Agreements and GSP Brussels, 9 th October 2014

2 Commercial policy Close integration with the EU through the SAA establishes the framework within which Serbia conducts trade policy

3 World Trade Organization Serbia's WTO Accession Negotiations started on February 24th 2005 Negotiations are in the final phase Detailed overview will be given in the presentation that covers the following point of Agenda World Trade Organization

4 Existing FTAs

5 European Union (1) Stabilizations and Association Agreement (SAA) with the European Union was signed in After ratification process was finalized, SAA entered into force on 1 st of September Serbian government decided to begin with the unilaterally implementation of the Interim Trade Agreement, as a part of SAA regarding trade, starting from January Officially IT Agreement entered into force in February 2010 for both sides.

6 European Union (2) Phased reduction of customs duties had ended on 1 st January 2014 after the expiry of six-year transition period. Serbia's average customs tariff protection towards EU countries is 0.5% (for comparison, MFN protection is 8.74%), and custom duties for 95% of tariff lines has been set to zero, leaving only a certain number of agricultural products under customs tariff protection. The EU is Serbia's most important trade partner with share of 64% of total trade with the world.

7 Central European Free Trade Agreement, CEFTA 2006 (1) Agreement signed in 2006, entered into force in 2007 After EU, CEFTA is the second biggest trade partner of Serbia (11.3% of total trade with the world, and 20.7% of total exports to the world in the first 7 months 2014) CEFTA`s share in Serbian trade even higher before Croatia left CEFTA (in % of total trade and 27.9% of total Serbian exports to the world data on trade with CEFTA including Croatia) Serbia records constant surplus in trade with CEFTA Parties. In 2013 recorded surplus amounted for mill euro. In first 7 months of 2014 Serbia recorded historically highest Foreign Trade Ratio in trade with CEFTA of 369% (which is 17.5% higher than in the same period in 2013)

8 Central European Free Trade Agreement, CEFTA 2006 (2) Provides full liberalisation of trade in industrial products from 2008 In December 2011 Serbia also fully liberalised trade in agricultural products with all CEFTA Parties (lower tariffs and quotas for certain products remained just with Croatia until its entry to the EU) Scope: Goods (administered by the Ministry of Trade, Tourism and Telecommunications, Ministry of Agriculture and Environmental Protection, Ministry of Finance, Customs Administration) Services: Negotiations are planed to be finished in first quarter of 2016

9 European Free Trade Association (EFTA) (1) Serbia has signed the free trade agreement with EFTA countries - Iceland, Lichtenstein, Norway and Switzerland, in Due to the specific ratification procedure agreement came into effect for all parties on 1st October Agreement with asymmetrical model of liberalization Free access to the markets of EFTA countries for industrial products and for processed agriculture products almost the same treatment as the EU members.

10 European Free Trade Association (EFTA) (2) Individual bilateral agreements with each EFTA member were signed for agricultural products and fish and fishery products (Switzerland required lowering of custom duties for cheese, chocolate and biscuits, while Norway and Island required special trade treatment for fish and other fish products) At the moment, expert negotiations are ongoing on new Chapter of the Agreement, covering Trade and Sustainable Development Important agreement also because these countries are among leading investors to Serbia (from total investments in RS from EFTA countries over 2 bill euro)

11 Bilateral Free Trade Agreements (1) Russian Federation FTA signed in August 28, 2000 provisional application from the day of signing. Further liberalization agreed in April 3, 2009 and July 22, provisional application from the day of signing. Import of agricultural products from Russia is fully liberalized Products exempted from free trade regime while imported to Serbia from Russia: retreaded or used pneumatic tyres of rubber; taps, cocks, valves and similar appliances; tractors; motor cars and other motor vehicles; motor vehicles for the transport of goods; used motor vehicles for the transport of persons

12 Bilateral Free Trade Agreements (2) Belarus FTA signed in March 31, 2009 provisional application was from the day of signing. Further liberalization agreed in June 15, provisional application started 2 months after the day of signing. Products exempted from free trade regime while imported to Serbia from Belarus: white sugar, alcohol; cigars, cheroots, cigarillos and cigarettes; retreaded or used pneumatic tyres of rubber; used road and agricultural tractors; motor cars and other motor vehicles; used motor vehicles for the transport of persons and used motor vehicles for the transport of goods;

13 Bilateral Free Trade Agreements (3) Kazakhstan FTA signed in October 7, 2010 entered into force in January 10, Products exempted from free trade regime while imported Serbia from Kazakhstan: certain kinds of cheese, white sugar, alcohol; cigars, cheroots, cigarillos and cigarettes; retreaded or used pneumatic tyres of rubber; used road and agricultural tractors; motor cars and other motor vehicles; used motor vehicles for the transport of persons and used motor vehicles for the transport of goods.

14 Products exempted from free trade regime while imported to the territory of Russia, Belarus and Kazakhstan from Serbia meat and edible offal of the poultry; certain kinds of cheese; white sugar; sparkling wine; alcohol; cigars, cheroots, cigarillos and cigarettes. retreaded or used pneumatic tyres of rubber; cotton yarn; woven fabrics of cotton; special woven fabrics; tufted textile fabrics; lace; tapestries; embroidery; compressors of a kind used in refrigerating equipment; tractors; used motor vehicles for the transport of persons and used motor vehicles for the transport of goods; motor cars and other motor vehicles.

15 Bilateral Free Trade Agreements (4) Turkey The FTA entered into force on September 1 st 2010 For all industrial products - zero duty rate for Serbian export to Turkey. Import from Turkey to Serbia - reducing rate of duty during the transitional period until January 1, 2015, when the import of all industrial products from Turkey will have zero customs duty rate. The liberalization of trade in agricultural products applies only to plant origin products, and will be carried out within the quantitative quotas, with a preferential in quota custom duty rate. Trade in agricultural products which are not covered by quotas will be carried out in the regime of applied custom duties.

16 TERMINATION OF FTAs Kazakhstan Turkey Article 37, paragraph 3 Russian Federation Article 21, paragraph 2 CEFTA Article 51, paragraph 3 EFTA Article 43, paragraph 1 Belarus Article 25, paragraphs 2 and 3 Article 24, paragraph 2

17 TERMINATION OF FTAs (1) Russian Federation Article 21, paragraph 2 This Agreement is concluded for indefinite time and shall cease to be valid after the expiration of six months from the date of the either Contracting party s written notification of its intention to terminate the Agreement.

18 TERMINATION OF FTAs (2) Belarus Article 24, paragraph 2 This Agreement is concluded for a period of five (5) years and shall be extended automatically for an indefinite period of time unless either Contracting Party notifies the other, in writing, of its intention to terminate it at least twelve months prior to the expiry of the five-year period. In the case of the extension of the validity of this Agreement for an indefinite period of time, it may be terminated 12 months following the date of receipt of either Contracting Party s notification of its intention to terminate the Agreement.

19 Kazakhstan Article 25, paragraph 2 and 3 TERMINATION OF FTAs (3) This Agreement is concluded for a period of five years and shall be extended automatically for an indefinite period of time unless either Contracting Party notifies the other in writing through diplomatic channels of its intention to terminate it at least twelve months prior to the expiration of the five-year period. In the case of the extension of the validity of this Agreement for an indefinite period, the Agreement may be terminated after six months following the date of the receipt of either Contracting Party`s written notification of its intention to terminate this Agreement.

20 TERMINATION OF FTAs (4) Turkey Article 37, paragraph 3 The Parties agree that, in case of accession of one of the Parties to this Agreement to the European Union, the Agreement will be terminated on the previous day before the date of the accession to the EU.

21 EFTA Article 43, paragraph 1 TERMINATION OF FTAs (5) Each Party may withdraw from this Agreement by means of a written notification to the Depositary. The withdrawal shall take effect six months after the date on which the notification is received by the Depositary.

22 TERMINATION OF FTAs (6) CEFTA Article 51, paragraph 3 The Parties agree that in the event of any eligible Party becoming a member of the European Union, that Party will withdraw from this Agreement. Withdrawal shall take place at the latest the day before membership takes effect and without any compensation to the other Parties subject to the altered conditions of trade.

23 ONGOING NEGOTIATIONS Negotiations with the Customs Union (Russian Federation, Republic of Kazakhstan and Republic of Belarus), Ukraine Liberalization of trade in services in CEFTA 2006 Agreement

24 General system of preferences (GSP)

25 Serbia as a beneficiary country Within GSP scheme, the Republic of Serbia is beneficiary country Currently, preferences are granted to Serbia by: Japan Russian Federation, Belarus and Kazakhstan (customs union countries) for the limited goods exempted from the free trade regime under FTA USA, preferences are recently renewed to 30 September

26 Authority responsible for issuing certificates In accordance with Article 69 of the Regulation on customs approved treatment of goods ( Official Gazette of the Republic of Serbia, No 93/10 and 63/13) in order to achieve preferential treatment of goods under GSP, Serbian origin of the goods shall be evidenced by a certificate of origin FORM A. Certificate of origin (FORM A) shall be issued by the Serbian Chamber of Commerce upon a written request from the exporter if the requirements for use specific preferences are met. 26

27 Thank you all for your kind attention