with the support of the european commission 1 bilateral free trade liberalisation macedonia with the...

With the support of the European Commission

1

BILATERAL FREE TRADE LIBERALISATION

MACEDONIA

With the support of the European Commission

With the support of the European Commission 2


The Republic of Macedonia currently applies eleven freetrade agreements (FTAs).

Nine of these agreements are applied on bilateral basisand two on multilateral basis

• Serbia and Montenegro, the FTA was concluded on 04.09.1996, implemented as of 16.10.1996

• Republic of Croatia, the FTA was concluded on 09.05.1997, implemented as of 30.10.1997

• Republic of Bulgaria, the FTA was concluded on 13.10.1999, implemented as of 01.01.2000



• Republic of Turkey, the FTA was concluded on 07.09.1999, implemented as of 01.09.2000

• Ukraine, the FTA was concluded on 18.01.2001, implemented as of 10.09.2001

• Bosnia and Herzegovina, the FTA was concluded on 24.04.2002, implemented as of 01.07.2002

• Republic of Albania, the FTA was concluded on 29.03.2002, implemented as of 15.07.2002

• Romania, the FTA was concluded on 07.02.2003, implemented as of 01.01.2004



• Republic of Moldova, the FTA was concluded on 28.01.2004, implemented as of 01.01.2005

• Free Trade Agreement with the EFTA states (Switzerland, Norway, Iceland and Liechtenstein), concluded on 19.06.2000, implemented as of 01.05.2002

• Stabilisation and Association Agreement with the European Communities and their Member States (Interim Agreement on Trade and Trade Related Matters) implemented as of 01.06.2001.



• Macedonia has concluded symmetrical free trade agreements with: Serbia and Montenegro, Republic of Croatia, Republic of Albania, Republic of Bulgaria, Romania, and with the Republic of Moldova.

• There are also asymmetrical Free Trade Agreements in favour of the Republic of Macedonia concluded with: the Ukraine, Republic of Turkey, EFTA states and EU member-states.

• The only asymmetrical free trade agreement that the Republic of Macedonia has concluded in favour of the other contracting party is the FTA with Bosnia and Herzegovina.



• At present, the Republic of Macedonia has more than 95% liberalisation of the trade in industrial and agricultural products with: Serbia and Montenegro (99%), Republic of Croatia (97%) and Bosnia and Herzegovina (97%).

• The trade liberalization level with the Albania is 60%. The liberalization level in the trade with industrial products is 70%, (100% from 01.01.2007) while the liberalization level in the trade with agricultural products is 50%.

• Macedonia has about 90% liberalization level of the trade only in industrial products with: Bulgaria, Romania, and Moldova.



ECONOMIC COOPERATION:

REPUBLIC OF ALBANIAThe economic cooperation between the two countries is not at the desired level. It consists mainly of trade and lacks higher forms of cooperation. The 2003 trade volume between the two countries was increased, primarily as a result of the increase of imports from Albania, which in the period thereto was significantly lower. During 2004, the same trend is maintained, as compared with the same period in 2003. The Republic of Albania has a 0.6% share in the total foreign trade of the Republic of Macedonia.



REPUBLIC OF BULGARIA

The economic cooperation between the Republic of Macedonia and the Republic of Bulgaria has been of varying intensity in the last period. The trade volume between the Republic of Macedonia and the Republic of Bulgaria in the last two years, is featured by increase, in terms of exports from the Republic of Macedonia, contributing towards a more balanced bilateral trade.



SERBIA AND MONTENEGRO

The bilateral trade is based on the signed Trade Agreement under which a larger number of goods are traded freely, by payment of 1% customs handling duty, while only a small number of goods are under the contingent regime. Serbia and Montenegro is the second ranked trading partner of the Republic of Macedonia, with a 12.9% share in the total foreign trade.The export share is significant, resulting into a surplus in the bilateral trade on the side of Macedonia.



ROMANIA

Economic Cooperation is not at the satisfactory level, in terms of volume and quality, and is mainly reduced to trade, which in the last period has had a decreasing trend. 2004 is an exception with progressive trend especially in terms of import.



TURKEY

Turkey is the eighth ranked trading partner in terms of volume of the trade with the Republic of Macedonia, with a 3.3% share in the total foreign trade. The Republic of Macedonia has had a deficit in the trade with the Republic of Turkey for several years. In 2004, there is an increasing trend in the exports from the Republic of Macedonia, indicating a tendency towards a more balanced trade. The opportunities for economic cooperation have not been sufficiently explored.



REPUBLIC OF CROATIA

Croatia is the ninth ranked trading partner of the Republic of Macedonia, having a 3.2% share in the total foreign trade. The trade between the two countries is almost totally balanced, featured, but not burdened, by a slight surplus and there are further possibilities to enlarge and enhance the economic cooperation.



BOSNIA AND HERZEGOVINA

The cooperation does not correspond with the possibilities of the two countries. Bosnia, having a 1.1% share in the total foreign trade of the Republic of Macedonia is among countries with which there are opportunities to enhance

the trade and the overall economic cooperation



import ( $ million) Country 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Serbia and Montenegro 101.45 161.07 165.60 206.02 245.56 183.85 190.36 158.02 185.19 212.80 243.22Bulgaria 241.65 255.95 107.45 99.02 86.28 91.63 97.64 103.33 128.48 149.21 208.82Slovenia 162.19 116.49 124.28 137.56 148.67 156.70 144.18 118.91 129.67 139.07 140.32Ukraine 10,89 37.28 31.38 92.04 119.55 114.79 205.77 86.20 72.75 88.03 74.10Turkey 47.68 55.17 44.27 49.52 51.19 53.67 52.43 46.61 59.26 78.82 94.84Croatia 59.46 56.28 48.90 69.45 64.58 62.22 57.86 46.39 55.23 63.55 65.25Bosnia and Herzegovina 0.89 0.76 46447 43282 21732 30164 12540 42095 14.30 27699 16.31Romania 17.36 16.77 46327 13.42 45200 38573 38456 13.19 27638 14.38 113.04Albania 8.17 8.17 5.15 3.92 1.99 3.16 3.09 1.31 1.13 3.96 6.35



export ( $ million) Country 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Serbia and Montenegro 39.94 84.78 245.84 273.55 240.04 254.48 335.10 267.01 246.38 274.99 347.51Croatia 29.93 32.13 34.04 39.29 54.01 48.99 47.69 58.49 59.08 66.17 80.16Slovenia 71.44 72.42 82.12 58.93 41.32 34.00 26.42 20.98 21.66 21.34 27.21Bulgaria 239.69 256.03 38.23 35.27 42.47 26.11 26.94 20.80 21.78 25.83 51.53Bosnia and Herzegovina 0.59 0.68 18.12 20.98 19.64 19.38 23.20 16.28 18.31 23.79 33.23Albania 27.98 24.68 32.60 34.03 13.30 15.00 12.83 10.02 13.87 17.42 23.62Turkey 35.38 38.27 18.17 24.30 9.12 8.38 10.31 8.59 8.46 32.81 53.95Romania 11.16 13.40 3.48 4.11 6.04 1.47 1.10 0.96 0.95 1.39 1.83Ukraine 17.43 29.24 4.89 2.51 3.68 3.52 0.47 0.78 0.48 1.78 2.16



no. country signing dateimplementation

dateimport export import export import export

1Serbia and Montenegro 04,09,1996 16,10,1996 positive positive 2 1 3 2

2 Croatia 09,05,1997 30,10,1997 none positive 9 9 13 7

3 Ukraine 18,01,2001 10,09,2001 none minor positive 8 30 8 29

4 Bulgaria 13,10,1999 01,01,2000 positive positive 7 10 5 11

5Bosnia and

Hertzegovina 24,04,2002 01,07,2002 positive positive 24 13 22 13

6 Albania 29,03,2002 15,07,2002 positive positive 33 16 38 17

7 Turkey 07,09,1999 01,09,2000 positive positive 11 19 12 18

8 Romania 07,02,2003 01,01,2004 positive minor positive 25 28 29 24

9 Slovenia* 01,07,1996 none negative 3 4 6 10

10 EFTA 19,06,2000 01,05,2002 none negative

*note: this agrement was terminated when Slovenia entered the EU

trade partner in 2004The effects of the agreements from its implementation's date

Free trade agreements trade partner before

implementation



2000 2002 2004 effects788.56 885.59 1155.06 positive563.19 568.17 900.20 positive

importexport

signing and implementation date:01.06.2001(interim agreement)Trade with the EU ( $ million)

Dynamics of the asynchronous liberalisation between the EU and the Republic of Macedonia

DEADLINE PROGRESSIVE REDUCTION ON CUSTOM DUTIES (IN %)

ON 1 JANUARY OF THE FIRST YEAR AFTER THE ENTRY INTO FORCE OF THE AGREEMENT

90

ON 1 JANUARY OF THE TENTH YEAR AFTER THE ENTRY INTO FORCE OF THE AGREEMENT

COMPLETE REDUCTION OF CUSTOM DUTIES



• The Republic of Macedonia could overcome disadvantage of a small market economy through free trade agreements, since it provides duty free access for goods originating from its territory. With these agreements it could be achieved a regional trade integration of the countries in South-East Europe, preparing the economic entities easier to accomplish their integration in the EU.

with the support of the european commission 1 bilateral free trade liberalisation macedonia with the...

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