All regional markets must join the Open Balkan Initiative to achieve its full potential
The conference focused on the key impacts of existing regional economic cooperation platforms, in particular the implementation of agreements adopted as part of the Open Balkan Initiative, and the real needs of companies that can be met through continued economic integration across the region.
The conference panel comprised Tanja Miščević, Minister for European Integration, Tomislav Momirović, Minister of Internal and Foreign Trade, H.E. Christopher Hill, US Ambassador to Serbia, as well as representatives of the Ministry of Agriculture, Forestry and Water Management, Ministry of Internal and Foreign Trade, Ministry of Health, Ministry of Finance, National Bank of Serbia, and other relevant institutions.
For the research analysis presented at the event please follow this link: AmChams regional economic cooperation EN
‘American companies planning to come to Serbia think not only about infrastructure and local conditions, but also about the potential for growing their regional presence thanks to harmonised standards that apply across the region. This is why Open Balkan Initiative matters above all for the economy and business and as an opportunity to attract foreign investors’, said H.E. Christopher Hill, US Ambassador to Serbia.
The conference also featured a presentation of the regional research conducted by the American Chamber of Commerce in Albania, North Macedonia, and Serbia. The results of this research should help all regional stakeholders to make progress with regional economic integration.
‘The business community plays a major role in both regional economic integrations and continued integration into the European Union. The Open Balkan Initiative, which aims to create a single regional market, along the lines of the EU common market, enjoys support from the private sector. This initiative has made headway in addressing long-standing non-tariff barriers and obstacles, facilitating trade in the region and in particular easing imports and exports of food’, said Stefan Lazarević, President of AmCham Serbia. ‘The findings of these surveys show that, in some cases, it now takes up to 50 percent less time to import or export food, with direct costs of fees and charges reduced by up to 80 percent, which has together boosted trade between the Open Balkan countries by nearly 30 percent. Businesses believe this initiative can achieve its full potential only if it expands to cover all regional markets that are still not in the EU and if it offers all four EU freedoms, namely free movement of goods, people, capital, and services.’
Areas where businesses expect more improvements
Whilst substantial progress has been made with free movement of goods, much room for improvement still remains in other fields. The companies surveyed for the AmCham study expect full implementation of the recently signed agreement on free access to the labor market, which would allow firms in Open Balkan countries to benefit from streamlined administrative procedures and so more easily attract scarce specialized staff. The Open Balkan Initiative is yet to address the issue of free movement of capital across the region, whereas liberalization of service provision has begun with limited and non-binding memorandums in tourism and the film industry. Clear and transparent governance structures and a functional grievance redress mechanism for businesses, that will ensure agreements are implemented consistently by all signatories, are key preconditions for regional economic cooperation platforms – such as Open Balkan – to live up to their full promise.
Free movement of goods
Businesses believe the key achievement of Open Balkan has been the streamlining of import/export procedures for products of plant and animal origin (which has involved removing border inspections, recognizing foreign laboratory findings, and cutting fees and charges), which has directly shortened the time needed for these procedures and reduced costs of trade. The interviewed companies feel this is a good example of how reducing barriers to trade can benefit businesses and potentially reduce costs for consumers.
The firms consider uniform and consistent implementation of all ratified agreements by all signatories as a crucial step forward in improving free movement of goods across the region. This would ensure all exporters in all three Open Balkan countries would fully benefit from the treaties and result in the extension of the agreements to cover all categories of goods traded and all inspections bodies, in particular sanitary inspections.
Free movement of capital
The surveys revealed a need to initiate new agreements to help dismantle barriers to cross-border movements of capital, reduce transaction costs, and liberalize financial services. The Serbian foreign exchange regime poses the most constraints, with the North Macedonian rules less restrictive and Albanian regulations the least so.
Removing these obstacles and allowing free movement of capital throughout the region is crucially important for foreign investors planning to expand to the region, domestic investors eyeing regional growth, and micro-and small enterprises facing constraints on their ability to access finance using modern fintech platforms.