No countermeasures by Belgrade to Pristina’s taxes?

Protest
Foto: KoSSev

The Serbian President Aleksandar Vucic announced in mid-April that Belgrade’s first countermeasures to Pristina’s taxes would arrive „around St. George’s Day.“ The decision on the countermeasures, however, has not been made yet. The Serbian Chamber of Commerce stated that the reciprocity to this measure would not have a big effect due to the small size of imports of goods from Kosovo, while any other type of countermeasures would jeopardize Serbia’s political position.

The Serbian President and SNS leader, Aleksandar Vucic announced that first countermeasures to Pristina’s decision to impose 100% tax increase on goods from Serbia would be decided at a session of the SNS “around St. George’s Day.” The announced meeting, however, was not held and no decision was made on possible countermeasures.

On the other hand, during a guest appearance on the Upitnik talk-show on RTS last week Vucic claimed that Serbia’s countermeasures could harm Kosovo Serbs.

Reciprocity would not have a significant effect due to the small size of imports of goods from Kosovo

In addition, Nenad Djurdjevic from the Chamber of Commerce of Serbia said that the countermeasures would have no economic or political significance. The import of goods from Kosovo amounts to only €20 million a year.

„The ban on the import of products from Kosovo would not affect either Serbia or Kosovo, while any other countermeasures would concern the implementation of agreements on the normalization of relations. Therefore, we would endanger the political position and affect the long-term prospects of Serbia with this kind of measure,“ Djurdjevic told RTS.

The Chargé D’affaires of the Embassy of Bosnia and Herzegovina, Zoran Perkovic confirmed for RTS that Bosnia would not introduce countermeasures during this session of the Council of Ministers.

On the other hand, Pristina’s think-tank GAP Institutes published an analysis two days ago stating that despite the fact that imports from Serbia dropped by 88% (€160 million) and from BiH by 83% (€24 million) Kosovo achieved a trade deficit again. They concluded that this points to the fact that local producers failed to exploit the space created in the market due to the taxes. Furthermore, they claim that the data indicates that taxes did not affect the accelerated growth of the processing industry in Kosovo, nor did they increase the number of jobs.

Political support of taxes on the rise in Pristina

Despite the announcements that the meeting in Berlin held at the end of April could result in the abolition of the taxes, the political support of this decision seems to have only been strengthened.

The Kosovo President, Hashim Thaci – who, in addition to the President of the Kosovo Assembly, Kadri Veseli, was one of the few high ranking Kosovo leaders who called for the abolition of the taxes – now claims that he had supported this idea from the beginning.

„The taxes are the right decision and must remain in effect. I supported this idea from the beginning. I did not call for its suspension, nor abolition – it’s a pure lie,“ Hashim Thaci said in response to Ramush Haradinaj’s allegations that Thaci asked him to abolish the taxes in Berlin.

The adviser to Kosovo president, Bekim Collaku, who was one of the first ones to say in December of last year that taxes should be abolished, told Pristina-based Zeri today that „the abolition of the taxes would be a strategic mistake“ because the „momentum for the agreement“ is gone.

„I think that abolishing the taxes at this time would be a strategic mistake. The height of international pressure passed a month ago and the government showed determination during this period,“ Collaku said, Zeri reported.

„If this government has resisted so much pressure – a positive pressure from the United States to create an opportunity for the continuation of the dialogue – and at the same time, it did not happen, what justification might there be for the cancellation of the taxes now when the momentum for a possible agreement between Kosovo and Serbia is gone. I believe that the taxes should remain in force,“ he added.

Legal mechanisms

In addition to numerous diplomatic pressures on Pristina, especially during January and February of this year – when a number of diplomats from the United States and Europe visited Pristina –and letters and calls were sent to Pristina from the State Department and the White House, there were also legal attempts to solve the problem of the taxes.

Serbia asked CEFTA to react to the introduction of the taxes. The 90-day deadline expired with no reply. The next move by Belgrade would be arbitration before that organization, RTS reminded.

„The problem is that CEFTA is a mechanism where all members have the right to vote and decisions are made unanimously, so it is almost impossible to get a legally satisfactory solution,“ Nenad Djurdjevic from the Serbian Chamber of Commerce told RTS.

He added that companies themselves could also make a compensation claim for damages. The lawsuit may only be advantageous for large international companies that can sell goods from third countries. Small and medium enterprises would suffer the biggest losses, especially those whose survival depends on placement in the Kosovo market – Djurdjevic concluded.

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