The implementation of the Agreement between Serbia and the Eurasian Economic Union (EAEU), which was signed in 2019, began on July 10. The members of the EAEU are Armenia, Kazakhstan, Kyrgyzstan, Russia, but also Belarus, which was imposed by the European Union through sanctions in the previous period. As a candidate country, Serbia partially agreed with those sanctions, so the question arises whether the sanctions against Belarus and the agreement with the EAEU are in some kind of collision.
After the presidential elections in Belarus and the forced landing of the “Ryanair” plane in Minsk and the arrest of journalist Roman Protashevich, the European Union adopted several packages of sanctions against Belarus, its leaders, and even companies. The latest package was adopted on June 21st and includes restrictive measures against 78 individuals from Belarus and eight entities, with whom “non-EU” “third countries” have agreed.
Although Serbia, as a candidate country, is expected to fully harmonize its foreign policy with the policy of Brussels, only partial support has arrived from Belgrade for this latest package of sanctions. Serbia supported only the second part of that package, which added another entity to the list of sanctions, and it is a state-owned company for air traffic control.
It is interesting that the time of the announcement of the (non) harmonization of Serbia with the sanctions coincided with the period of entry into force of the agreement between Serbia and the EAEU. That does not mean that Serbia joins that alliance, says Vladimir Medjak from the European Movement in Serbia, and notes that Serbia had to sign that agreement in order not to lose the Russian market.
As he says, the SAA and the agreement with the EAEU are legally compatible, but he notes that Serbia is already under political pressure because of that.
“We have practically replaced one agreement with another with these countries, and in the past nine months it has been presented to the public as if we had joined the Eurasian Union. It would be much smarter if the government did not glorify this agreement so much. The closer we are to the EU, the more the question will arise as to what we are doing. It is not wise to brag about five percent of exports to the EAEU, and thus endanger the 65 percent we have with the EU,” says Vladimir.
He also points out that it would be inadmissible if Serbia did not impose sanctions on Belarus in air traffic, because “hijacking planes in the airspace is a value issue and our country has been made clear that if it does not, it has no place in the EU.”
The vice president of the Center for Foreign Policy, Suzana Grubjesic, has a slightly different opinion, saying that the fact that the EU imposed sanctions on Belarus, which Serbia supported only in one part, will not affect the Agreement with the countries of the Eurasian Union.
“The EU imposed sanctions on Russia in 2014, so we trade with them unhindered. It is not a political issue, but an economic one,” she said.
However, Suzana Grubjesic adds: “In essence, they are certainly not happy that the candidate country is doing that, but with this move, we are getting a big market and we should do it.”
We expect a gradual harmonization of policy
In Brussels, they do not officially speak openly whether they are happy or unhappy because of the agreement between Serbia and the EAEU, but they also use the opportunity to point out that Serbia has not become part of that alliance. EU spokesman for foreign affairs and security policy Peter Stano told Euronews Serbia that he expects Serbia, as a candidate country for EU membership, to gradually align with EU foreign policy.
“At this moment, Serbia has not harmonized the sanctions with most of the EU sanctions against Belarus, so at this stage they are not legally binding for it. Serbia can enter into agreements with other countries or organizations before EU accession, but by the day of EU accession withdraw from all bilateral free trade agreements. This is not a new condition, but a general rule that applies to all candidate countries wishing to join the EU,” says Peter Stano.
He points out that the EU remains Serbia’s most important trade partner, covering more than 61 percent of total trade, with very good growth dynamics, and notes that trade with Russia accounts for less than six percent of Serbia’s total trade. In addition, he notes that European investments in Serbia are approximately 10 times higher than Russian ones.
“The Serbian government has identified EU integration as a strategic priority for the country and has reaffirmed this several times, recently on Monday at the Western Balkans summit in Berlin. This includes progressive alignment with the EU’s common foreign and security policy. We expect Serbia to act in accordance with this commitment,” says Peter Stano.
The agreement is complementary to European policy
Both the State Secretary in the Ministry of Foreign Affairs of Serbia, Nemanja Starovic, and the coordinator of Cluster 6, which refers to economic relations with foreign countries, confirm that Serbia, when it joins the common market and enters the EU, will have to terminate all other trade agreements. But he believes that it is in Serbia’s interest to have as many such agreements as possible by then.
“It is not in contradiction, but it is complementary to the European policy of Serbia,” claims Starovic.
He reminds that the agreement with the EAEU was signed in October 2019 in Moscow and states that it has the character of an economic, not a political agreement.
“In the past, the EU has introduced restrictive measures against Belarus, which apply to certain economic branches, such as air transport, as well as to a limited number of persons and economic entities. In addition, EU member states have developed trade and economic cooperation with Belarus,” Starovic notes.
Starovic notes that Serbia’s membership in the EU is a foreign policy priority and a strategic commitment of Serbia.
“The existence of both agreements (SAA and Free Trade Agreement with the EAEC) does not constitute an obstacle to Serbia’s future membership in the EU, while any restrictive measures against third countries, including those related to Belarus, to which the Republic of Serbia is committed – represent an international commitment that we will abide by,” said the Secretary of State.
A similar opinion is shared by the Minister of Trade, Tatjana Matic, who says that she does not see how the Agreement with the EAEU could harm Serbia’s relations with the European Union.
“Of course, we have special relations with the EU and it is our most important economic partner and it will remain so. This is a new market that we needed and it is important for completely different types of products that we place there. In the political sense, we are not yet EU member states and this type of agreement does not pose any obstacle,” she said.
Professor of the Faculty of Economics in Belgrade, Dr. Predrag Bjelic, explains that Serbia, when it comes to sanctions against Belarus, has joined only the part concerning air traffic, ie overflights, and adds that it does not endanger the trade part.
“The EU was also angry that we are cooperating with Russia, because they also imposed sanctions on them earlier. While we are not members, we do not have to apply the common EU policy. There is no reason for us to limit ourselves,” Bjelic said.
The professor also explains that the EU would certainly react if trade from other European countries were redirected through Serbia to Russia, Belarus and other EAEU members.
“They would react, because then they would be much more significant flows. These are not quantities that could worry them. On the other hand, despite sanctions against Russia, the North Stream is coming to an end, which means that the Union is not giving up,” he said.
He notes that trade is always viewed through interest and that trade should use politics, not the other way around.
“The EU is our most important partner, because we have a greater exchange with it than with the CEFTA countries, and the opportunities for export to the EAEU market are much less,” said Professor Bjelic.
The professor notes that Russia is important because of the import of energy, and that Serbia has restrictions on exports to this country, ie the EAEU, which do not exist with Europe. As an example, he states that raw materials from Macedonia cannot be processed and sold to Russia, but to Europe.
What does the Agreement between Serbia and the EAEU envisage?
According to the data of the Serbian Chamber of Commerce, the total trade between the EAEU countries and Serbia last year was 1669.9 million dollars. Of that, imports were 1,303.4 million dollars, and exports only 366.5 million dollars. About 90% of the total exports to these five countries are trade with Russia. All the products we sold to Belarus last year cost 15 million dollars, while we imported goods worth 43 million dollars from them.
PKS told Euronews Serbia that the new agreement agreed that Serbia would be able to export 2,000 tons of cigarettes, approximately 90,000 liters of brandy, 400 tons of semi-hard and hard cow’s cheese, unlimited quantities of goat’s and sheep’s cheese and fruit brandies to the EAEU countries. On the other hand, new benefits will be provided for some cheeses, alcoholic beverages, cigarettes and faucets, valves and similar devices for pipelines, for goods originating from the EAEU when imported into Serbia.
The agreement with the EAEU contains innovated provisions in the part related to preferential rules of origin, of which the most significant is the abolition of the conditions of direct purchase and improved provisions regarding the cooperation of the competent authorities.
The SCC believes that the Agreement is the most important for agriculture and the food industry, but all exporters and importers will benefit.
“Potentially interesting products for export to the EAEU market are canned fruits and vegetables, jams, fruit brandies, juices, compotes, edible fruit seedlings and rose cuttings, medicines, ceramic tiles, furniture, pet food, and cooperation in the field of construction is attractive,” states PKS, Euro News reports.
