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Key benefits of the Serbia-China free trade agreement for EU companies

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Serbia’s recent Free Trade Agreement (FTA) with China, which came into effect in July 2024, presents significant opportunities for EU companies seeking to expand their exports and sales both within Europe and towards the Chinese market. This agreement positions Serbia as a strategic partner for businesses looking to tap into the Chinese market while benefiting from favorable trade terms and geographic proximity to the EU.

Key benefits of the Serbia-China free trade agreement for EU companies

1. Preferential access to Chinese markets:

The FTA provides preferential access for more than 10,000 Serbian products to the Chinese market, while over 8,900 Chinese products benefit from reduced tariffs or full exemptions when entering Serbia. This agreement allows EU companies that establish operations or partnerships in Serbia to leverage these trade terms, effectively gaining easier access to China’s vast consumer and industrial markets.

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2. Integration into the Belt and Road Initiative:

As part of the agreement, Serbia and China signed a Memorandum on joint improvement of industrial and investment cooperation under the Belt and Road Initiative. This facilitates deeper integration of Serbian businesses into global supply chains and opens up new opportunities for EU companies operating in Serbia to benefit from Chinese investments and infrastructure projects.

3. Expansion of export opportunities:

EU companies can establish production or distribution facilities in Serbia to benefit from customs-free exports to China. With 60% of goods immediately exempted from customs duties under the FTA, this arrangement provides significant cost savings and a competitive edge in terms of market pricing.

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4. Enhanced R&D and technological collaboration:

The agreement includes provisions for cooperation in economic development policies and joint construction projects, which could lead to increased R&D activities and technology transfers. EU companies engaged in sectors like renewable energy, advanced manufacturing and electronics can leverage Serbia as a base for joint research and development activities with Chinese partners.

5. Strategic gateway for logistics and supply chains:

Serbia’s strategic location, along with its robust infrastructure and free trade zones, makes it an ideal hub for managing logistics and supply chains that connect the EU and Chinese markets. EU companies can utilize Serbia’s logistical advantages to facilitate more efficient trade routes and reduce transportation costs for exports to China and other Asian markets.

The Serbia-China FTA, combined with Serbia’s existing agreements with the EU and other global markets, establishes Serbia as a strategic base for EU companies looking to expand their footprint into Asia. It enables them to benefit from tariff reductions, improved access to a growing Chinese market, and participation in broader investment and industrial projects under the Belt and Road Initiative.

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