Today the European Commission has adopted a proposal for a Council Regulation extending until 2010 the autonomous trade preferences which the EU grants to the Western Balkans. For the last five years, these trade preferences have been a key instrument in the revitalisation of the Western Balkan economies by providing privileged access to the EU market. More stable economic development in turn fosters political stability in the entire region.
With these preferences, the EU grants the beneficiary countries and territories (Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Serbia and Montenegro including Kosovo) duty free access for virtually all goods.
These preferences, which were originally adopted in 2000 for a period until the end of 2005, have contributed to an increase in the Western Balkans' exports to the EU, thus meeting their objective so far. Indeed, between 2000 and 2004, imports from these countries into the EU have increased by approximately 8 % per annum.
However, despite some progress, the economic transition and reform process in the Western Balkans is not complete. Given the importance of the EU as the Western Balkans' dominant export destination, the continuation of the current scheme of trade preferences will preserve an economic advantage for the beneficiary countries and territories, thus contributing to establishing the best economic conditions possible for the continued pursuit of much needed reforms.
The Commission proposal will now be discussed with the Member States in order to have this initiative approved in autumn to enter into force on 31 December 2005 at the latest.
By Regulation (EC) No 2007/2000, the European Communities granted exceptional unlimited duty-free access to the EU market for nearly all products originating in the countries and territories benefiting from the Stabilisation and Association Process.
In accordance with the EU Stabilisation and Association Process, the granting of these exceptional trade preferences is subject to certain conditions, namely the respect by the beneficiary countries and territories of fundamental principles of democracy and human rights, the readiness of the countries concerned to develop mutual economic relations and to engage in economic reforms and regional integration through trade. Entitlement to the exceptional trade preferences is conditional on the beneficiaries' involvement in effective administrative co-operation with the Community in order to prevent any risk of fraud.
The present proposal of the Commission aims at continuing the current system of trade preferences for an additional period of 5 years after their expiry on December 31.
The preferences in detail
All products originating in the countries and territories concerned can be imported into the EU duty and quota free. The only exceptions apply to the following:
- Wine and certain fisheries products are subject to preferential tariff quotas;
- Sugar is subject to preferential tariff quotas (except for Croatia where this is currently being negotiated);
- "Baby beef": only the specific import duty is eliminated- ad valorem duties of 20 % continue to apply;
- Quotas apply on imports of textile products originating in the customs territories of Montenegro and Kosovo.
 As defined in UNSC resolution 1244
 as defined in UNSC resolution 1244