With $ 5.3 billion in trade last year, China has become Serbia’s second foreign trade partner. The announcement of the signing of the Free Trade Agreement announces that these results could be even better, both in total and in terms of the structure of exports. Except for copper and the growth of exports of agricultural and food items, the score for all other products is still on the Chinese side.
The free trade agreement with China will be a logical continuation of the long-established relations through the launch of the “Belt and Road” initiative, and then the signing of the Comprehensive Strategic Partnership in 2016, which put Serbia on the Chinese map of partners in the world.
The agreements from 2019, which harmonized phytosanitary and veterinary certificates, enabled the export of agricultural products, primarily pork.
Tatjana Matic, Minister of Trade, Tourism and Telecommunications, says that all line ministries and other competent institutions must give their opinion regarding the agreement in question, whether it is and to what extent useful for Serbia.
“A negotiating team is being formed, which consists of experts, of course, and which will then be formed, formalized by the Government through one conclusion, and which will then begin to negotiate,” Matic explains.
A small number of countries can boast of a Free Trade Agreement with China, only about 30, above all East Asian countries, and of the European countries only Switzerland and Iceland. The Chamber of Commerce warns that the gap between our economies is large.
“In general, there is always a certain number or groups of products that are protected in a certain way, whether by quotas or withholding duties or some transitional periods when the agreement is applied, and these are instruments of how a state can protect a more sensitive part of its economy”, says Mihailo Vesović, director of the Sector for Strategic Analysis of the SCC.
Which we trade the most with China
We mostly import medical equipment, telephones and other electronic equipment from China, and we export food and agricultural products.
Aleksandar Markovic, general director of “Budimka”, states that for the group of their products, sour-sweet program and juices, the customs rate on imports to China was between 20 and 30 percent.
“Now with the agreement we eagerly await to be signed, we hope this year those rates will be reduced many times over and enable us to be competitive on the Chinese market and increase our production capacities,” Markovic points out.
Stefan Pantić, technologist of “Stemine”, says that the Chinese mostly like red wines, and they are not interested in white.
“As far as I understood somewhere, white is not something popular with them. We like red wine with a red label, so they really liked it,” adds Pantic.
The contract allows only the export of domestic products
The free trade agreement opens the possibility only for the export of domestic products, which means that the minimum is 50 percent of the products from domestic raw materials, which opens wider possibilities than the exchange of goods.
Professor from the Faculty of Economics, Predrag Bjelic, says that bilateral agreements are more of a supplement, when you want to give someone, for example, much more favorable conditions for trade outside the WTO.
“It will be an incentive for foreign investment because if these companies meet the conditions of domestic origin, they will have to use our domestic raw materials, usually required to be incorporated 50 percent into the product – to be able to export to China on preferential terms,” professor explains.
So far, Serbia has such agreements with the European Union, CEFTA, EFTA countries and the Eurasian Union, RTS writes.