Kosovo-Macedonia ‘trade war’ becomes political

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Skopje has introduced a tax on Kosovar citizens who want to cross the border in response to a previous import ban by Pristina’s authorities.

The row between Macedonia and Kosovo that started as a trade dispute is threatening to escalate into a full-blown political confrontation.

While each side blames the other, the people and the economy on both sides have started to feel the strain.

The dispute is believed to have started when Skopje imposed quantitative limitations on flour and wheat from Kosovo and other neighbours to protect its domestic production. The Macedonian Chamber of Commerce insists “the measure was in line with the Central European Free Trade Agreement (CEFTA) and applied to all member countries”.

However, Kosovar Deputy Minister for Foreign Affairs Petrit Selimi told EURACTIV that the Macedonian ban had been “temporarily activated every year in the past three years, in breach of CEFTA and this year Kosovo decided to respond” by banning the import of food products from Macedonia.

Only a few hours later, Macedonia reciprocated by introducing a €2 tax on each Kosovar citizen who wants to cross the border. The tax increases to €5 for cars and €10 for buses and trucks, which led Kosovo to retaliate by imposing a full embargo.

“This was an unacceptable move as it transferred the issue from a trade dispute to an issue affecting the freedom of movement of regular people. Both sides have to cancel all decisions that break CEFTA rules, including the initial ban on grain imports to Macedonia,” says Selimi, who himself, despite his diplomatic passport, had to pay the €2 fee to enter neighbouring Macedonia.

Macedonia and Kosovo are privileged trade partners. The overall trade exchange between the two countries reached €317 million last year, with Macedonia exporting more than it imported from Kosovo. 

But the ties between the two countries are far deeper than trade. A third of Macedonia’s citizens are of ethnic Albanian origin and often have many relatives in Kosovo. Kosovar citizens regularly travel to Skopje for shopping, and represent an important part of the patients of private hospitals in Macedonia.

During the war in Serbia in 1999, Macedonia accepted more than 300,000 Kosovar refugees.

Due to these new measures, the border crossing between the two countries has been overcrowded for two days, and more and more people are crossing it by foot, while trucks remain stuck at the frontier.

The European Commission said it is still investigating all elements of the dispute in order to identify if the CEFTA agreement has been broken and by which side.

Both sides blame each other for introducing “political measures” in breach of CEFTA, while ordinary citizen, small and medium businesses pay the heaviest price.

Commenting on the damages this blockade could cost him in the long run, a Macedonian farmer told EURACTIV today “at least this problem will finally show the politicians’ true colours on both sides”.

Positions

The President of Kosovo, Atifete Jahjaga, said on Wednesday (11 September) that both sides must find a solution to the dispute according to the CEFTA rules. "Kosovo and Macedonia are engaged in the EU integration process and should help each other on that path. The free movement of people and goods is an essential condition for good-neighbourly relations and for the European integration", Jahjaga said following a meeting with her Slovenian counterpart, Borut Pahor.

Background

Kosovo unilaterally declared independence from Serbia in February 2008, nine years after the end of the 1999 war. Macedonia recognized the new state in October 2008. Currently, 101 countries in the world recognize Kosovo’s independence.  Since 2001, Pristina and Belgrade have been engaged in an EU-facilitated dialogue, which aims at normalizing diplomatic, political and economic relations.

Kosovo recognizes Macedonia’s constitutional name, which is disputed by Greece since Skopje declared independence from the former Yugoslavia in 1991.

Both countries have very high unemployment rate and fragile economies.

They are both members of the Central European Free Trade agreement, a free-trade area between Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro, Serbia and the United Nations Interim Administration Mission in Kosovo (UNMIK) on behalf of Kosovo.

Further Reading

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