Kosovo on Wednesday (21 November) raised customs tariffs on Serbian and Bosnian goods from 10 to 100% after Serbia blocked its former province from joining Interpol, the international police organisation.
Its retaliation, which was criticised by the European Union, also required authorities to remove or prevent from entering any goods that did not address Kosovo by its constitutional name, Republic of Kosovo, which Serbia and Bosnia do not recognise.
“This will halt any trade between Serbia and Kosovo,” Serbia’s Trade Minister Rasim Ljajić said.
President Aleksandar Vučić called a meeting of Serbia’s National Security Council to review the tariffs.
Bosnia, Kosovo and Serbia – along with Albania, Montenegro and Moldova – are part of the Central European Free Trade Agreement (CEFTA) set up to help ex-communist states harmonise their economic and legal systems with EU demands.
The EU’s foreign policy chief, Federica Mogherini, said Kosovo’s move was a clear violation of CEFTA and of the spirit of the Stabilisation and Association Agreement between the European Union and Kosovo.
“The Kosovo government has to immediately revoke these decisions,” Mogherini said in a statement.
— European External Action Service – EEAS 🇪🇺 (@eu_eeas) November 21, 2018
Bosnia’s Foreign Trade and Economic Relations Minister Mirko Sarović said: “This is the biggest blow to the regional free trade zone.”
According to official figures, Serbia’s exports to Kosovo amounted to €440 million, while imports amounted to €21 million. Bosnia’s exports to Kosovo reached €80 million last year.
Two weeks ago Kosovo imposed a 10% import tax on goods coming from Serbia and Bosnia. The European Union has urged Pristina to reverse that decision.
Kosovo’s mostly ethnic Albanian population declared independence from Serbia in 2008, a decade after a NATO bombing campaign to end the killing of Albanian civilians by Serb forces during a two-year insurgency.
It is now recognised by more than 110 nations but not by Serbia, Russia or five EU states. Belgrade and Moscow have blocked Kosovo from joining the United Nations.
In 2013 both countries agreed to an EU-sponsored dialogue to resolve outstanding issues, but little progress has been made.
Kosovo blamed a campaign by Serbia for its failure to join Interpol and said Serbia was against normalizing relations, key for both countries if they are to join the European Union. Bosnia also voted against Kosovo’s membership.
“The government has decided to impose a tax of 100% on imported goods coming from Serbia and Bosnia,” Prime Minister Ramush Haradinaj said.