TIRANA, May.2 – The CEFTA agreement, which should have been implemented on May 1, has been postponed by one month as only three states have yet to ratify the agreement. Additionally, the postponement might last longer than one month as local business communities oppose the effects of the agreement. Increasingly, negative trade balances seem to be the main obstacle towards a free regional market. Up to now the states which have accepted CEFTA have been Montenegro, Albania and Kosovo.
The Central European Free Trade Agreement (CEFTA) welcomed in December nine new members from southeast Europe. Nine countries plus Kosovo signed the agreement which enlarged the free trade zone and realized yet another important step towards joining the European Union. The new members of CEFTA were Albania, Bosnia and Herzegovina, Moldova, Montenegro, Serbia and Kosovo. “The CEFTA complements the EU’s stabilization and association agreements for the countries of the western Balkans. It makes an important contribution to economic development and regional co-operation. For the [EU] candidate and potential candidate countries, CEFTA is a stepping stone towards closer economic cooperation that is an inevitable part of membership in the European Union,” Olli Rehn said on the occasion. The initiative, which created a common market of some 29 million people, was first resisted by some countries with special needs of economic protection such as Bosnia and Serbia. The other eight parties initialed the new CEFTA accord in November. It was undertaken by the Stability Pact for Southeast Europe and the European Union. Bosnia signed the agreement after more favorable conditions for its farm products were agreed to with neighboring Croatia. Serbia had to consider its interest in the tobacco industry, which in the past few years has attracted large investors such as British American Tobacco, Philip Morris and Japan Tobacco. Serbia has relatively low taxes on cigarette imports but protects its producers with high excise duties. Initially Serbia decided to not be part of the trade group, however, later decided to sign the CEFTA deal and try to solve the outstanding issues before ratification next year, according to Serbian government officials. Poland, Hungary, Slovakia and the Czech Republic founded CEFTA in 1992 to help countries aspiring to EU membership bring their economic and legal systems into conformity with EU standards. Slovenia, Romania, Bulgaria, Croatia and Macedonia joined later, and as each country entered the EU they left CEFTA. Bulgaria and Romania left in January 2007.
Trade deficit: Kosovo is the only country to which Albania has a positive trade balance though the intensity of the exchange has not reached its potential, which currently stands at $48 million. Exports have accounted for $30.2 million and imports $18 million
Macedonia : The trade exchanges with Macedonia, one of the most intensive trade partners of Albania, reached $75 million in 2006, with a negative trade deficit given Albanian exports of $12.7 million and imports of $62.8 million. Importantly, the growth of 22 percent of Albanian exports has been counteracted by a growth of 60 percent of imports from Macedonia. Macedonia accounts for 1.8 percent of Albania’s trade activity.
Bulgaria: For the first half of this year the trade volume with Bulgaria reached $103.9 million, from which $3.3 million are exports and $99 million imports.
Rumania: Imports from Romania reached $53 million while exports were $650,000.
Croatia: The trade deficit is also large with Croatia, with exports amounting to $2.4 million and imports $35.5 million.
Serbia and Montenegro: 2006 imports from Serbia and Montenegro reached $33.3 million versus exports of $10.8 million.
Bosnia Herzegovina: The total trade volume has been $ 13.5 million from which $9.17 million were imports and $4.2 million in exports.
Roundup: Albania’s 2006 trade deficit within the region is $252 million. This year has seen the doubling of import figures and the free trade agreements have hit hard at local producers which face unprotected and fierce regional competition.
