Agreement on Customs Tax on Croatian Cigarettes is Yet to be Reached

Source from:  InSerbia News 10/17/2013

The talks on a customs tax rate that will be levied on Croatian cigarettes entering Serbia are in the final phase, but an agreement is yet to be reached, nothing has been signed, and the decision has to be confirmed in the parliament in the end, Serbian Minister of Trade Rasim Ljajic said on Wednesday.

Replying to the opposition's question in the Serbian parliament, Ljajic said that Serbia sent a letter to the European Commission on Tuesday, saying that it accepted the methodology, which means, as he explained, that Serbia "wants to talk".

"It is true, we were under great pressure. I have never said that our chances are great. I have said that we are entering the negotiations, that our hands are tied. We had an unfavorable customs tax rate, and a majority of other states already accepted that," Ljajic said.

Since November last year, the negotiations have been held with the European Commission, and not with Croatia, he noted, adding that it had nothing to do with Croatian President Ivo Josipovic's visit to Serbia, but rather with the European Commission's report, and that Serbia had been warned that "the report would be tainted by the fact that no agreement has been reached."

That is not an exception, but rather the rule that the European Union is applying when a state joins the bloc, so as to protect it and enable it to be as prepared as possible for the fully-fledged membership, the Serbian minister explained.

Croatia also had to abide by the rules when Romania, Bulgaria, Hungary, Slovakia joined the EU, Ljajic said.

The unfavorable position of Serbia regarding Croatian cigarette imports stems from the agreement with Croatia on customs duties for certain goods, which defined that the customs tax rate for cigarette imports be 15 percent, and for Serbian exports to Croatia -38 percent.

"That led to Serbia not selling a single truck on an annual level, and Croatia as many as 1,600 tons," he explained.

Upon entry to CEFTA, customs tax rates were kept that were valid based on the agreement that the countries previously concluded.

Nevertheless, Serbia could expect certain favorable terms for cigarette exports to Croatia, he said, adding that Belgrade is also trying to raise the quota for sugar exports to the EU.

"This is the first time that we can expect an increase in these quotas," Ljajic said.

Dejan Mihajlov, an MP of the Democratic Party of Serbia (DSS) noted earlier that "not even bilingual name plates can be installed in Croatia, while Serbia is importing cigarettes from the Tobacco Factory Rovinj under unfavorable conditions."

Bozidar Djelic, an MP of the Democratic Party (DS) called on the Serbian government not to accept the negotiating framework until Serbia gets something in return. Enditem