The relations between Serbia and Kosovo have long been tense. After many years of conflict, Kosovo declared its independence from Serbia in 2008. Since then, Serbia has refused to recognize Kosovo as an independent state. In recent years, however, Kosovo and Serbia have commenced discussions to normalize their relations and come to an agreement. Part of the motivation for this is because a compromise between Kosovo and Serbia is required before either can join the European Union. In September 2018, it appeared that talks were moving forward, as Serbia and Kosovo were considering a border correction. Unfortunately, these discussions have come to a standstill due to tariffs imposed by Kosovo on Serbian imports.
Back in November 2018, Kosovo declared a 10% tariff on all products coming from Serbia and Bosnia-Herzegovina due to “Serbia’s ‘negative behavior’ towards Kosovo”. Shortly after, Kosovo was denied entrance into the Interpol. Kosovo believes Serbia actively lobbied to have Kosovo excluded from Interpol, and that Serbia pressured other countries to reverse their recognition of Kosovo. In response, Kosovo increased this tariff to 100%. This massive increase caused Serbia to boycott the normalization discussion with Kosovo until the tariffs are removed.
The European Union has warned Kosovo that the tariff is a clear violation of the Central European Free Trade Agreement (CEFTA), of which Kosovo, Serbia, Bosnia, Albania, Croatia, Macedonia, Montenegro, and Moldova are all parties. The EU declared that Kosovo must “immediately revoke these decisions.” One main objective of CEFTA is to expand trade in the Balkan region by use of fair rules and elimination of trade barriers between the Parties. Unsurprisingly, the tariffs have had a significantly negative effect on trade in the region. In the first month of the increased tariff, imports from Serbia and Bosnia were a total of €290,000, whereas the previous year imports from the two countries were a combined €35 million.
The United States, one of Kosovo’s most powerful allies, has not stayed silent on this tariff. In February, the U.S. issued a letter to Kosovo, pressuring the Prime Minister to remove the tariff. Several U.S. officials stated in a letter to Kosovo’s Prime Minister that “it is incredible that after all we have done together, Kosovo values our friendship so lightly as to ignore our advice.” The diplomats went on to state that the tariff undermines the relationship, not only with Serbia, but with the U.S. as well. These diplomats threatened that until the tariffs are suspended, the U.S. cannot restore the relationship to the “previous robust level.” Kosovo’s Prime Minister responded, requesting understanding from the United States, but refused to remove the tariff until Serbia stops blocking its recognition. There was discussion of suspending the tariff, but for now it remains in place.
Instead, Kosovo has released its conditions for revoking the tariff. Kosovo demands that negotiations with Serbia be based on “principles of mutual recognition” and requested an EU-US backed international conference to be held in order to come to a legally binding agreement with Serbia. Interestingly, Kosovo’s Prime Minister demanded that the US and EU reject any proposals for border correction, which had been originally proposed by Kosovo in late 2018, in a potential agreement with Serbia. On Monday, Serbia’s President stated that “although everything seems difficult…we are determined to reach a compromise”, but reiterated that it will not negotiate with Kosovo until the tariff is removed.
Regardless of outside pressure, Kosovo refuses to remove its tariff. Until it does, Serbia refuses to resume negotiations. With neither country willing to budge on their stances, it appears that Serbia and Kosovo will continue this stalemate with regard to negotiations. Until Serbia and Kosovo come to a compromise, neither can enter the European Union. Thus, it seems to be in the best interest of both nations to return to negotiating a mutually beneficial agreement.
- Fatos Bytyci, Amid Recognition Row, Kosovo Hits Serbia with More Customs Tariffs, Reuters (Dec. 28, 2018, 9:48 AM), https://www.reuters.com/article/us-kosovo-serbia-tariffs/amid-recognition-row-kosovo-hits-serbia-with-more-customs-tariffs-idUSKCN1OR18Q. ↑
- Id. ↑
- Maja Zivanovic, Normalising Ties Essential, EU Tells Serbia, Kosovo, BalkanInsight (June 27, 2018), https://balkaninsight.com/2018/06/27/normalisation-between-serbia-and-kosovo-essential-eu-warns-06-27-2018/. ↑
- Fatos Bytyci, Kosovo President Says Wants to “Correct” Border with Serbia, Reuters (Aug. 14, 2018, 8:29 AM), https://www.reuters.com/article/us-kosovo-president/kosovo-president-says-wants-to-correct-border-with-serbia-idUSKBN1KZ1O4. ↑
- Id. ↑
- Die Morina, Kosovo Sets Conditions to Drop Tariffs on Serbian Imports, BalkanInsight (Jan. 29, 2019), https://balkaninsight.com/2019/01/29/kosovo-uses-tariffs-as-bait-for-a-final-agreement-with-serbia-01-29-2019/ [hereinafter Kosovo Sets Conditions]. Die Morina & Maja Zivanovic, Kosovo Imposes Customs Tariff on Serbia, Bosnia, BalkanInsight (Nov. 6, 2018), https://balkaninsight.com/2018/11/06/kosovo-imposes-customs-tariffs-for-serbia-and-bosnia-and-herzegovina-11-06-2018/. ↑
- Kosovo Sets Conditions, supra note 3. ↑
- Id.; Kosovo Hits Serbia with 100% Trade Tariffs Amid Interpol Row, BBC (Nov. 21, 2018), https://www.bbc.com/news/world-europe-46287975. ↑
- Kosovo Hits Serbia with 100% Trade Tariffs Amid Interpol Row, supra note 5. ↑
- EU Parliament Calls on Kosovo to Suspend Tax on Serb Goods, The Roanoke Times (Mar. 2, 2019), https://www.roanoke.com/news/politics/wire/eu-parliament-calls-on-k…pend-tax-on-serb/article_b6b5f233-56f8-5f64-83c2-12b02b4cb47e.html. ↑
- Statement by the High Representative/Vice-President Federica Mogherin, The Government Decision on Taxing Goods from Serbia and Bosnia and Herzegovina (Nov. 21, 2018). ↑
- Id. ↑
- Central European Free Trade Agreement, Alb.-Bosn. & Herz.-Croat.-Kos.-Maced.-Mold.-Montenegro-Rom.-Serb., April 6, 2006, http://cefta.int/cefta-parties/. ↑
- Fatos Bytyci, supra note 1. ↑
- Misha Savic, U.S. Pressures Kosovo over Stalled Talks with Serbia, Bloomberg (Feb. 13, 2019, 1:42 AM), https://www.bloomberg.com/news/articles/2019-02-13/u-s-puts-pressure-on-kosovo-over-stalled-talks-with-serbia. ↑
- Id. ↑
- Id. ↑
- Id. ↑
- Id. ↑
- Kosovo Sets Conditions, supra note 5. ↑
- Id. ↑
- Id. ↑
- Id.; Fatos Bytyci, supra note 3. ↑
- Tanjug Beta, “It’s My Duty to Explain to Serbs the Importance of Compromise”, B92 (Mar. 5, 2019, 9:54 AM), https://www.b92.net/eng/news/politics.php?yyyy=2019&mm=03&dd=05&nav_id=106342. ↑