After several years, Croatian companies can again export food and agricultural products to neighbouring Bosnia and Herzegovina without paying customs duties.
After long and difficult negotiations between the European Commission and Bosnia and Herzegovina (BiH), a protocol to the Stabilisation and Association Agreement between EU and BiH has entered into force. The protocol allows for food and agricultural products from Croatia and other EU member states to be sold in Bosnia and Herzegovina without paying customs duties. Croatia had lost the right to duty-free trade in 2013, when it left the Central European Free Trade Agreement (CEFTA) and entered the European Union, reports Večernji List on February 4, 2017.
In the meantime, the loss of the Bosnia and Herzegovina’s market has been compensated by expansion to the EU internal market, which today accounts for more than 60 percent of the total exports of Croatian agricultural and food products, which is 20 percent more than in 2012, the last pre-accession year. However, Croatian companies in recent years have felt the consequences of the “loss” of the BiH market, which used to account for 30 percent of Croatian exports, and today represents only 15 percent.
From 354 million euros in exports in 2012, in 2015 Croatian exports to BiH declined to just 268 million euros, while in the first nine months of 2016 the exports reached 195 million euros, one million less than in the same period one year earlier. The most drastic decline in exports was recorded in the categories of meat, meat products, milk, dairy products and cigarettes.
“In the first half of 2014, cigarette exports fell by 63 percent compared to the same period of 2013. As for meat products, the exports declined by 85 to 100 percent, and for milk products between 40 to 100 percent, which means that for some categories of products the exports to Bosnia were completely stopped”, said Božica Marković, director of Agriculture and Food Industry Sector of the Croatian Chamber of Economy.
However, the agreed terms will apply to all EU member states. Zvjezdana Blažić, an independent consultant, said that before joining the EU the food sector had a strong export concentration on the CEFTA market, which was the destination for as much as 41 percent of all food exports, of which the BiH market accounted for 23 percent of food and 55 percent of drinks exports.
“After Bosnia introduced customs duties, some company solved the problem by covering the BiH market from their facilities located in Bosnia or Serbia. However, the latest changes will open the way for the return of many Croatian products to the shelves of supermarkets in Bosnia and Herzegovina, which will provide a new impetus for the growth of exports, which has been noticeable in the last three years”, she said.