TIRANA, June 6 – Two and a half years after the first joint meeting between the Albanian and Kosovo governments, trade exchanges between the two neighboring countries have only modestly recovered as past and present barriers continue holding back the full potential on trade and investment.
Lack of communication for more than four decades during Albania’s isolation under communism until the early 1990s and Kosovo’s fight for independence and its ordeal until 2008 when it declared its independence from Serbia have made the establishment of trade and investment ties a gradual process moving at a rather slow pace despite a costly Euro 2 billion highway nicknamed the Highway of Nation cutting distance between the two countries and making movement of goods and people much easier.
In a third joint government meeting held last weekend in Prishtina, Albanian Prime Minister Edi Rama and his Kosovo counterpart Isa Mustafa reconfirmed the political willingness to step up cooperation in different sectors with a focus on the economy and the EU integration agenda of both countries with an ethnic Albanian majority.
In a joint statement, the two prime ministers agreed to set up within this month a mechanism on the implementation and follow-up of all deals and commitments undertaken by the two countries under the Strategic Partnership Document inked in January 2014 in the first joint government meeting.
“It is high time to move forward because much has been done, but much more remains to be done to accelerate the initiated process of lifting all non-tariff barriers and unifying policies and strategies in all sectors and achieving our joint ambition of consolidating the foundations of a pan-national space in the region,” said Prime Minister Rama.
“The further steps we are undertaking to establish a customs office for Kosovo in the Durres port, to harmonize excise duties, unify reference prices on transport and create a green corridor on exports and imports of seasonal agriculture products will undoubtedly give a new impetus to the economic cooperation between our two countries,” he added.
Kosovo Prime Minister Isa Mustafa said cooperation between the two countries is on track and that recent deals have already facilitated cooperation in the trade, security, agriculture, education and culture sectors.
Neighboring Kosovo which has been recognized by 112 countries since its independence eight years ago, has recently been given the green light for visa free travel in the Schengen area and achieved historic membership in the FIFA and UEFA football governing bodies in milestone achievement for its integration aspirations.
“Neighborhood and cooperation have never been more brotherly than now because we now have a same political and Euro-Atlantic integration orientation, we have a same language on economy, integration and competition but also the state language to strengthen rule of law and fight crime and corruption,” said Prime Minister Mustafa.
The Albanian and Kosovo finance ministers announced ahead of the third joint government meeting, the two countries have agreed the Durres port will offer unique procedures for Kosovo exporters, meaning this will be the only stop for Kosovo businesses.
Albania and Kosovo held their first joint government meeting in Prizren in January 2014. The second meeting was held one year later in Tirana in March 2015.
As the Tirana-Prishtina interconnection line is on track to finish by mid-2016, Albania and Kosovo have also stepped up efforts to integrate their energy markets into a joint power exchange. The project would considerably diversify energy resources for both Kosovo which relies on lignite-fired power plants and Albania’s hydro-dependent electricity system.
Kosovo has emerged as Albania’s second most important trading partner for exports with 8.6 percent of the total but imports from the neighboring country are five times lower accounting for only 1 percent of Albania’s total imports.
Albania’s trade exchanges with Kosovo increased to 26.4 billion lek (€187.6 million) in 2015, up 6.7 percent compared to 2014 but more than double compared to about 10 billion lek (€72 million) in 2009 when Albania completed the Durres-Kukes highway but Kosovo had not built its part of the Highway of Nation yet.
Ongoing trade disputes between Albania and Kosovo over potatoes, cement, milk, flower, wine and pharmaceutical products have considerably curbed trade exchanges between the two neighboring countries in the past few years.
Kosovo companies almost doubled their presence in Albania to 411 companies in 2015 while their stock of foreign direct investment was reported at only Euro 15 million until 2014, according to INSTAT and Bank of Albania data.
The presence of Albanian companies in Kosovo is estimated much bigger and the FDI stock at about 100 million euros at the end of 2014.
Tourists from landlocked Kosovo account for almost half of foreign tourists to Albania in what is known as ‘patriotic tourism.
