Five years after the construction of the billion euro Highway of Nation cutting distance between the two countries, the increase in Albania’s trade exchanges with Kosovo has been modest with exports to Kosovo accounting for 7.3 percent of total and imports from Kosovo at a negligible 1 percent of total
By Ervin Lisaku
TIRANA, March 24 – While the Albanian and Kosovo governments continue strengthening cooperation and signing formal bilateral agreements, the reality is trade exchanges between the two neighbouring ethnic Albanian countries remain significantly below potential and are hindered by continuous trade disputes.
More than a year after the inaugural joint meeting between the two governments in the Kosovo town of Prizren, trade exchanges between the two countries have registered only a modest recovery while Albania continues applying a ban on imports of medicines from a local Kosovo company.
Data published by the country’s state statistical institute, INSTAT, shows that five years after the construction of the billion euro Highway of Nation cutting distance between the two countries, the increase in trade exchanges with Kosovo has been modest with exports to Kosovo accounting for 7.3 percent of total and imports from Kosovo at a negligible 1 percent of total.
In the second joint meeting of the two governments held this week in Tirana, the two Prime Ministers signed 11 cooperation deals focusing on promoting trade exchanges, border control, agriculture and education while business associations submitted a list of 16 concrete proposals to ease trade exchanges and lift barriers between the two countries.
After previous disputes with the trade of potatoes, milk and flour, Albania continues imposing a ban on imports of medicines from Kosovo despite Kosovo companies importing medicines produced in Albania.
“The blockade is officially in force due to a law on procurement of medicinal products in Albania which requires that pharmaceutical products should also be registered at least in another EU country,” said Pranvera Behrama, an official of the Kosovo Medicines Agency, as quoted by Kosovo’s daily Zeri this week.
The Kosovo Chamber of Commerce says Albania has been banning imports of Kosovo pharmaceutical products since 2010 despite significant evidence of the quality and standards met by the local Trepharm company.
Safet Gerxhalliu, the head of the Kosovo Chamber of Commerce says some 65 Albanian pharmaceutical products are currently traded in Kosovo while none of the 60 products produced by the local Kosovo company are allowed to be traded in Albania because of “an illegal blockade and unacceptable and banal reasons.”
“Relations with Albania are turning more and more into idyllic and theatrical shows in front of the cameras. There is no reason to explain the unacceptable blockade of Kosovo pharmaceutical producer Trepharm,” said Gerxhalliu back in summer 2014.
Seven years after Kosovo’s independence, Albania and Kosovo have made a significant step in overcoming frequent barriers in trade exchanges by establishing the first joint transit corridor at their largest border crossing point under a deal signed earlier this year.
The transit corridor significantly reduces costs for both Albanian and Kosovo businesses by speeding the circulation of goods and significantly cutting staying time in customs points, officials say.
Trade exchanges and movement of people between the two countries have considerably increased in the past few years, especially after the construction of the Highway of Nation cutting travel time between Tirana and Prishtina, but remain significantly below potential.
Plans to impose Euro 5 tolls on the Highway of Nation by both Albania and Kosovo could further pose a barrier on trade exchanges and the movement of people.
Ongoing trade disputes between Albania and Kosovo have considerably curbed trade exchanges between the two neighboring countries in the past couple of years. The latest dispute erupted last October when Albanian food authorities temporarily banned the import of flour from Kosovo because of allegedly not meeting the required protein content, causing considerable damage to Kosovo traders, considering that flour accounts for around 15 percent of total Kosovo exports to Albania.
Back in 2013, Albania also temporarily banned the entry of Kosovo flour to Albania in retaliation for the ban of Albania milk to Kosovo due to alleged higher toxic and carcinogenic substances known as Aflatoxins. The ban, apparently on competition grounds, led to the bankruptcy of a big milk company in Albania and losses of millions of euros.
Albania’s exports to Kosovo registered a 15 percent increase in 2014, climbing to a record high of 18.7 billion lek (Euro 131 million), ranking the neighbouring country the country’s second most important destination of exports, according to INSTAT.
Back in 2013, several disputes over tariffs and barriers considerably affected trade exchanges between the two countries and for the first time since 2009, Albania’s exports to Kosovo registered negative growth rates.
Albania is Kosovo’s second most important trade partner after Italy accounting for 15 percent of its exports and 4.5 percent of imports, most of which are still covered by Serbia with 11.7 percent, according to data by the Kosovo Agency of Statistics for 2013.
Business community unveils concrete proposals
On the eve of the second joint meeting between the two Albanian governments this week, the National Chamber of Commerce, a newly established association representing businesses from both Albania and Kosovo, submitted a list of 16 concrete proposals to boost trade cooperation and exchanges between the two countries.
The most important proposals include the application of the EUR 1 movement certificate, the lift of customs duties on raw materials and packaging and the establishment of chains of production, processing and trade in both Albania and Kosovo.
Agim Shahini, the president of the National Chamber of Commerce, said the application of the proposals would increase trade exchanges and justify the billions of euros of investments in the Highway of Nation linking the two countries.
“This makes us more attractive to investments and more competitive to imports. We love each other but we should also love each other’s products. We sing in Albanian all day and night but don’t consume in Albanian. This is a barrier and low awareness by consumers,” he added.
Luan Bregasi, the deputy head of the National Chamber of Commerce, called for more action to promote the economies of both countries in order to have a joint market of 6 million consumers.
“We want a package of measures so that the reciprocal products get the EUR 1 certificate which creates a lot of advantages in competition with other European products which put pressure on our local products,” said Bregasi.
