Tariffs tough talk show Kosovo-Serb standoff set to last
Serbian goods are nowhere to be seen in shops in neighboring Kosovo.
Naim Krasniqi, a small store owner, says the 100% tariff announced a year ago by the government is fair since Serbia is blocking all goods from Kosovo, part of a standoff between rivals in one of Europe’s most volatile regions.
“We can live without them,” Krasniqi says of Serbian goods, which are now largely replaced by imports from Croatia, North Macedonia or Bulgaria.
One year on from Kosovo’s tariffs decision, the tussle over trade shows no sign of abating and suggests the deep freeze that has set in between the two countries is likely to continue despite the European Union’s hopes to mediate and ease tensions.
Kosovo’s new Cabinet is unlikely to lift the tariffs, which apply to Serbian and Bosnian imports. Albin Kurti, whose Self-Determination Movement, or Vetevendosje, won an election in October and is poised to become the next prime minister, says the tariffs show Kosovo is “a proper state with sovereignty and international stature.”
Kosovo is a former Serbian province that broke away after a war in 1998, and Serbia does not recognize its 2008 declaration of independence. Diplomatic relations have soured as Kosovo has sought to establish itself, to the alarm of Western allies who do not want a repeat of the armed conflict in the heart of the EU.
The EU has dangled membership in the bloc as an incentive to get the two sides to play nice. It has been facilitating talks and says neither country will be allowed to join the EU if they don’t normalize their relations.
Part of the normalization of relations is the agreement to apply 33 deals signed since the start of talks in 2011. The deals are meant to ensure reciprocal recognition of things like educational and professional degrees.
Currently, Kosovo recognizes diplomas from Serbian universities, but Serbia does not accept those from Kosovo. It’s the same for Kosovo driving licenses or manufactured goods certificates.
The two countries’ presidents had also held secret talks to swap land to ease long-time grievances, Kurti said, but those negotiations were frozen after the tariffs decision.
Since they were announced a year ago, the taxes on Serbian imports have had a negative impact overall on the economy, with inflation rising to about 3% from 1.1% last year, says Berat Rukiqi of the Economic Chamber.
Local manufacturers have benefited slightly as businesses seek to replace the Serbian goods that were suddenly more expensive. It has been more difficult and expensive for construction companies, however, to find new sources of raw materials that they traditionally bought from Serbia.
About a quarter of Kosovo’s imports come from Serbia, with total annual at about 400 million euros ($442 million).
Serbia says the tariffs violate regional agreements on free trade and movement. It estimates losses from the tariffs at nearly 400 million euros.
“We are waiting to see when they will abolish the taxes, so we can start talking,” President Aleksandar Vucic was quoted as saying this month in Paris.
Ramush Haradinaj, the outgoing Kosovo prime minister who imposed the tariffs, said his country should not change its position. He set up the tariffs after Kosovo failed to become a member of UNESCO and Interpol following lobbying by Serbia.
“Today on the one-year anniversary of the 100% tax Kosovo has won a lot! The producer, the buyer and our flag has won!” Haradinaj wrote on his Facebook page Thursday.
Kurti says he will remove the tariffs once Serbia agrees to reciprocity, the 33 deals recognizing each other’s degrees and business standards.
“Once we install it, of course, the 100% tariff can be lifted,” he said.
That’s unlikely to happen, though, as Serbia insists it has fulfilled all the terms of the talks led by the EU.
Semini reported from Tirana, Albania. Jovana Gec contributed from Belgrade.