CEFTA 2006 implementation - institutional and policy

perspectives

d-r Silvana Mojsovska

Institute of Economics - Skopje

d-r Krum Efremov

Ministry of foreign affairs, Macedonia

d-r Marija Ackovska

Institute of Economics - Skopje

International Conference – Regional Trade Integration of Southeast European Countries: Benefits and Challenges

Skopje, 12 December 2011

Content

WTO and CEFTA 2006 Classification of measures raised by the CEFTA

2006 parties Institutional issues related to CEFTA 2006

implementation Volume and structure of the CEFTA 2006 intra-

regional trade CEFTA 2006 parties’ policies compliance

WTO and CEFTA 2006

Basis – GATT Article 24 System of protection

Anti-dumping measures (Art. 22/CEFTA 2006) – Art. VI/GATT)

General safeguards (Art. 23/CEFTA 2006) – Art. VI/GATT Temporary measures (Art. 23bis/CEFTA 2006) Balance of payment difficulties (Art.25/CEFTA 2006)

Common declaration for implementation of the WTO rules and procedures

Mediation – means for fulfilment of the obligations (Art. 42/CEFTA 2006)

Dispute resolution by Arbitrage (Art. 43/CEFTA 2006)

WTO and CEFTA 2006 Article 23 bis/CEFTA 2006

… given the particular sensitivity of the agricultural market, if imports of products originating in one Party, which are the subject of concessions granted pursuant to Annex 3, cause serious disturbance to the markets or to their domestic regulatory mechanisms, in another Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such solution, the Party concerned may take the appropriate measures it deems necessary.

Classification of measures raised by the CEFTA 2006 parties

Special activities/measures with impact on the trade of the CEFTA 2006 parties

Issues raised between CEFTA 2006 parties in the period 2007-2011 Agriculture - 46 issues (mainly related to phytosanitary

measures) Industry – 5 issues (mainly related to technical barries of

trade) Combined (agriculture and industry) – 14 issues (mainly

related to the nontariff barriers)

Classification of measures raised by the CEFTA 2006 parties

Issues raised in agriculture: Complicated and expensive inspection procedures Introduction of safeguards and import prohibition without

notice Means of quotas allotment and abolition of concessions Prices of inspection and customs offices’ services Vine categorization Customs valuation of the import prices Obligations for products’ labeling Quantitative export restrictions Different excise rates for tobacco products Re-assessment of the rules of origin certificates Non-recognition of the phytosanitary certificates

Classification of measures raised by the CEFTA 2006 parties

Issues raised in industry: Non-sufficient transparency of the public

procurement procedures Non-recognition of the different types of licenses for

sub-contracting jobs Favoring domestic companies on tender procedures Complicated procedures for registration and mutual

recognition of the medical production Partial recognition of the certificates of rules of

origin and EUR1

Classification of measures raised by the CEFTA 2006 parties

Combined measures (industry and agriculture): Practice of adoption of legislation without

notification to the other parties Procedures of customs valuation by referent prices Procedures for obtaining transport licenses for

transit Trade embargo Introduction of additional taxes Mutual recognition of customs offices stamps Verification of EUR1 according to the rules of origin Access to the information for import/export

procedures

Institutional issues related to CEFTA 2006 implementation

Relation between the institutions and measures Measures related/deriving to/from policies (usually foreign

trade policy Introduction of different safequards Adoption of the regulation without proper notification

Measures related to the implementation of CEFTA 2006 Agreement

Different procedures and taxes related to customs procedures

Non-recognition of the standards, licenses and other trade documentation

Non-sufficient transparency and in-time notification of the introduced measures

Institutional issues related to CEFTA 2006 implementation

Treatment of the institutional issues within CEFTA 2006

Joint bodies of the CEFTA parties Joint Committee

Sub-committee for agriculture, including sanitary and phytosanitary measures

Sub-committee for tariffs and goods origin Sub-committee for technical barriers in trade

and non-tariff barriers Increase of the transparency

CEFTA 2006 web portal Exchange of information

Volume and structure of the CEFTA 2006 intra-regional trade

Table 1. Export within CEFTA 2006 and to EU

0

20

40

60

80

100

120

2006 2007 2008 2009 2010

ЦЕФТА-ЕУ извоз

Интра ЦЕФТА извоз

Volume and structure of the CEFTA 2006 intra-regional trade

Table 2. Most exported products within CEFTA 2006 (data refer to 2010)

Albania Bosnia and Hercegovina

Croatia Macedonia Moldova Montenegro

Serbia Kosovo

Iron and steel Х Х Х Х Х Х Mineral fuels Х Х Х Х Х Х Х Aluminium and aluminium products

Х Х Х

Iron and steel processed products

Х Х Х

Beverages, alcohol and vinegar

Х Х Х Х Х

Volume and structure of the CEFTA 2006 intra-regional trade

Table 2. Most imported products within CEFTA 2006 (data refer to 2010)

Albania Bosnia and Hercegovina

Croatia Macedonia Moldavia Montenegro

Serbia Kosovo

Iron and steel

Х Х Х Х Х Х Х

Mineral fuels

Х Х Х Х Х Х Х

Sugar and sugar processed products

Х Х Х

Iron and steel processed products

Х Х Х

Paper and paper products

Х Х Х

CEFTA 2006 parties’ policies compliance

Linkages of the national policies Foreign trade policy – industrial policy

Limited diversification of the export offer Foreign-trade policy – foreign exchange rate policy

Pegged exchange rate – stability instead of growth promotion?

Compliance of the domestic policies Main mechanism – undertaking safeguards

CEFTA 2006 parties’ policies compliance

CEFTA 2006 Agreement implies: Mutual notification of the parties about changes

in the agricultural policies General compliance of the national policies for

investment (through the Joint Comittee of CEFTA 2006)

Exchange of information about the introduced measures

Purposeful or indirect harmonization? Purposeful compliance or harmonization is rather

exception, then rule (principle of sovereignty of the national states in formulation of the national policies)

Indirect harmonization aiming towards increase of the intra-regional trade

Rather exceptional then regular and systematic activity in CEFTA 2006 parties

Conclusions

The main issues related to the implementation of CEFTA 2006 include introduction of safeguards, adoption of regulation without proper notification to the other parties, differentiation of the customs procedures and non-recognition of the standards

There is a need for further deepening of the institutional cooperation at the operational level within and among CEFTA 2006 parties

The policies’ compliance of the national policies within and among the CEFTA 2006 parties is rather limited on ad-hoc problems

More systematic approach towards policies compliance could be a solid platform for increase of the static and dynamic effects of CEFTA 2006

Thank yous.mojsovska@ek-inst.ukim.edu.mk

krumefremov@mfa.gov.mkmarija@ek-inst.ukim.edu.mk