Kosovo signed an agreement with the European Free Trade Association (EFTA) on January 22, after negotiations that lasted more than two and a half years. Who is part of the association, how will Kosovo producers benefit from the free trade agreement and what are the benefits for them? Ekrem Idrizi brings us the details.
If a local Kosovar producer has been forced to pay an additional 10 percent customs duty to export his goods to a country with a large diaspora, like Switzerland, from now on he will not only not pay an additional price, but he will not pay any customs duty at all.
This has been made possible by a newly signed agreement between Kosovo and the European Free Trade Association (EFTA), which, in addition to Switzerland, also includes Iceland, Liechtenstein, and Norway.
The removal of tariffs is one of the facilities that will be enjoyed by Kosovo companies that export or want to export to EFTA member countries, with which Kosovo signed a Free Trade Agreement on January 22, less than three years after opening negotiations with this organization.
The agreement offers many opportunities, including for importing and exporting goods. Consumers and companies can enjoy cheaper prices, while domestic companies can sell their products more easily in foreign markets.
The agreement allows companies in contracting countries similar or better access than their competitors from third countries, according to EFTA.
The President of the Kosovo Chamber of Commerce, Lulzim Rafuna, tells Radio Free Europe that this agreement means a lot for Kosovo.
"Such agreements, for a small market, such as Kosovo, should have a strategic purpose as much as possible, because this helps foreign investments, because every investor who comes to Kosovo produces and exports goods to these EFTA countries," Rafuna asserts.
Kosovo Prime Minister Albin Kurti expressed confidence after signing the agreement in Davos, Switzerland, that it "will bring benefits to businesses, industries and citizens of all [participating] countries."
Who benefits the most from this agreement?
The agreement between Kosovo and EFTA covers areas such as trade in goods and services, intellectual property rights, trade facilitation, sustainable trade development, and legal and horizontal provisions.
According to Rafuna, local producers will benefit the most from this agreement, because they will have the opportunity to export all products originating in Kosovo to these countries, without having to pay customs duties. The same will apply to goods entering Kosovo from these countries.
"We have a very large diaspora in Switzerland, and thanks to this agreement they will benefit, to attract Kosovo products to the Swiss market, but also their products, or those of their partners, to the Kosovo market, without customs duties," says Rafuna.
The company "S//Sprint", based in Podujeva, which manufactures sportswear, has been exporting its products to EFTA member Switzerland, as well as other regional and European countries, for years.
Its owner, Sami Sopa, tells Radio Free Europe that the company has faced difficulties in the past in exporting to the Swiss market, being forced to pay additional customs fees.
"When Kosovo goods were imported into Switzerland, they thought they were European, later they found out they were from Kosovo, and they demanded an additional payment of up to 10 percent," says Sopa.
He hopes that the agreement will facilitate exports to the Swiss market, which he described as "very convenient and important for us, because we have many expatriates there who buy our products."
Around 115,000 Kosovars live in Switzerland, according to the latest data from the Swiss State Secretariat for Immigration from 2022. The Kosovo Agency of Statistics has not yet published the 2024 census data for Kosovars living in Switzerland.
Sopa says that his company will also aim to take advantage of the opportunity that the new agreement between Kosovo and EFTA offers to Kosovar companies to export goods to the markets of other countries.
What is the trade balance between Kosovo and EFTA?
Bilateral trade between Kosovo and EFTA began in 2008, after the country's independence.
Since then, it has recorded continuous growth, and in 2023 it reached its highest figure: 176 million euros, according to data on the organization's website.
During 2023, Kosovo exported goods worth 76 million euros to EFTA countries, while importing products from them worth 99 million euros.
The average import rate increased by 20.4 percent in the last five years, while the export rate increased by 26.6 percent during that period.
Trade between Kosovo and Switzerland during 2023 reached the value of 141 million euros. Kosovo exported goods worth 75 million euros to Switzerland, while importing 66 million euros from it. The data on trade with Switzerland also includes Liechtenstein, as these two countries have a common customs, according to EFTA.
Kosovo exports to EFTA countries mainly goods such as furniture, plastics, iron and steel, as well as wood products, while importing from them mainly cars, pharmaceutical products, tobacco and machinery./ REL (A2 Televizion)
A2 CNN Livestream
MUND TE LEXONI GJITHASHTU
