waz.euobserver.com
AUGUSTIN PALOKAJ
19.11.2010 @ 09:18 CET
Despite progress made in the negotiations, it is still unclear when the free trade agreement between Kosovo and the European Union will be ready to be finalised. When it is eventually signed, however, it will be the first bilateral contract between the partners.
Kosovo is the only western Balkan country without contractual relations to the EU, due to ongoing conflicts about its status as a nation. Five EU member states do not recognise its independence, so the EU cannot treat it as an entity capable of concluding treaties.
19.11.2010 @ 09:18 CET
Despite progress made in the negotiations, it is still unclear when the free trade agreement between Kosovo and the European Union will be ready to be finalised. When it is eventually signed, however, it will be the first bilateral contract between the partners.
Kosovo is the only western Balkan country without contractual relations to the EU, due to ongoing conflicts about its status as a nation. Five EU member states do not recognise its independence, so the EU cannot treat it as an entity capable of concluding treaties.
The trade deal could qualify as an exception because the European Commission would act as signatory while the European Parliament would need to give its approval, but the legal issues are still far from being resolved.
For a start, it is unclear who will sign the agreement for the Kosovar side. There are currently two options, both of which are problematic. If the country's government wants to sign it on behalf of the Republic of Kosovo, the European Commission may run into difficulties with those EU members that do not recognise Kosovo. If the EU insists that the head of the UN administration in Kosovo has to sign, the Kosovar government may refuse to subscribe, arguing that this could be construed as questioning its own statehood.
In terms of substance, the agreement will have little practical bearing because Kosovo already enjoys trade with the European Union area which Brussels can unilaterally give to all Balkan countries. Free trade with other states in the region is covered by a Stabilisation and Association Agreement (SAA) signed by all 27 EU member states.
"Kosovo can practically export almost all of its products duty-free to the EU," an EU source told WAZ.EUobserver. "But if the EU wants, this can be stopped unilaterally any time. The agreement will provide more security and predictability to potential foreign investors in Kosovo. They will know that they will be able to export their products to the largest single market in the world, to the EU."
EU sources admit, however, that the agreement may have a detrimental effect on Kosovo. The country will have to open its market to European products which means customs authorities collect less revenue.
"It is up to the Kosovar authorities to study the impact the free trade agreement with the EU will have on their country. We will be ready to allow Kosovo a transitional period for some products to keep duties but they will have to prepare for increased competition," said an EU commission source.
In general, Kosovo regards this agreement as a good opportunity to start contractual relations with the EU.
For a start, it is unclear who will sign the agreement for the Kosovar side. There are currently two options, both of which are problematic. If the country's government wants to sign it on behalf of the Republic of Kosovo, the European Commission may run into difficulties with those EU members that do not recognise Kosovo. If the EU insists that the head of the UN administration in Kosovo has to sign, the Kosovar government may refuse to subscribe, arguing that this could be construed as questioning its own statehood.
In terms of substance, the agreement will have little practical bearing because Kosovo already enjoys trade with the European Union area which Brussels can unilaterally give to all Balkan countries. Free trade with other states in the region is covered by a Stabilisation and Association Agreement (SAA) signed by all 27 EU member states.
"Kosovo can practically export almost all of its products duty-free to the EU," an EU source told WAZ.EUobserver. "But if the EU wants, this can be stopped unilaterally any time. The agreement will provide more security and predictability to potential foreign investors in Kosovo. They will know that they will be able to export their products to the largest single market in the world, to the EU."
EU sources admit, however, that the agreement may have a detrimental effect on Kosovo. The country will have to open its market to European products which means customs authorities collect less revenue.
"It is up to the Kosovar authorities to study the impact the free trade agreement with the EU will have on their country. We will be ready to allow Kosovo a transitional period for some products to keep duties but they will have to prepare for increased competition," said an EU commission source.
In general, Kosovo regards this agreement as a good opportunity to start contractual relations with the EU.
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