Prospects of CEFTA

Macedonian Chamber of Commerce Skopje, 6 December 2012

Press Conference

CEFTA SECRETARIAT

IMPLEMENTATION OF CEFTA

CEFTA SECRETARIAT

Joint Committee

Subcommittee on Agriculture and

SPS

Subcommittee on Customs and RO

Subcommittee on NTBs and TBT

Working Group on TBT

Working Group on Trade in

Services

Secretariat

Structure

Working Group on Customs Risk

Management

Deputy Ministers

CEFTA SECRETARIAT

“CEFTA Approach”

• Harmonisation efforts within CEFTA are aligned with the common objective to join the EU.

• All decisions are promoting and not in anyway jeopardising the accession process of respective Parties.

• No CEFTA specific standards or practice are introduced. • Implementation is carried out in a number of interdependent

and coherent steps: • Analyse trade flows • Assess existing and potential barriers to trade • Articulate respective Parties interest • Identify potential area of multilateral/plurilateral interest • Cross-check with the respective EU accession priorities/plans • Agree on the scope of CEFTA negotiations

CEFTA SECRETARIAT

MAIN FEATURES OF CEFTA TRADE

CEFTA SECRETARIAT

Intra-CEFTA exports account for about 26% of total CEFTA exports ...

*This designation is without prejudice to positions on status, and is in line with UNSC 1244 and the ICJ Opinion on the Kosovo declaration of independence

CEFTA SECRETARIAT

... while intra-CEFTA imports for 13%.

CEFTA SECRETARIAT

Intra-CEFTA trade is balanced.

• Although smaller than the trade volume with the EU, relative importance remains

high taking into account relatively small size of the CEFTA market.

Source: CEFTA Parties

CEFTA SECRETARIAT

Share of intra-CEFTA trade in agricultural trade is close to 40% and below 20% in non-agricultural

trade.

Source: CEFTA Parties

CEFTA SECRETARIAT

Dependence on Intra-CEFTA varies among the CEFTA Parties.

Intra-CEFTA trade in agricultural products as % of total trade (3Q2011)

Intra-CEFTA trade in non-agricultural products as % of total trade (3Q2011)

0

10

20

30

40

50

60

70

80

90

100

Exports Imports

AL BA HR MK MD ME RS KOS* Average

0

10

20

30

40

50

60

70

80

90

100

Exports Imports

AL BA HR MK MD ME RS KOS* Average

Source: CEFTA Parties

CEFTA SECRETARIAT

MARKET ACCESS ISSUES

CEFTA SECRETARIAT

•Non-tariff barriers are addressed ex post (Market Access Database) and ex ante (Multilateral Monitoring Framework). •The number of ex post notified NTBs is rather limited i.e. 100 over a period of four years. •The percentage of solved issues is satisfactory (60 percent).

new 4%

pending 35%

solved 60%

non classified 1%

Distirbution of Cases by Status

28

23

19

9

9

5

3

1

1

1

1

0 5 10 15 20 25 30

Prepared Foodstuffs; Beverages, Spirits and …

All

Live animals

Vegetable Products

Animal or Vegetable Fats and Oils and Their …

Mineral Products

Products of the Chemical or Allied Industries

Base Metals and Articles of Base Metal

Machinery and Mechanical Appliances; Electrical …

Non classified

Disitribution of cases by sector

26

7

18

8

6

15

2

1

1

1

1

3

0 5 10 15 20 25 30

A Sanitary and phytosanitary measures (SPS)

B Technical barriers to trade (TBT)

C Pre-shipment inspection and other formalities

D Price control measures

E Licenses, quotas, prohibition & other quantity control …

F Charges, taxes and other para-tariff measures

G Finance measures

H Anti-competitive measures

I Trade-related investment measures

J Distribution restrictions

L Subsidies (excluding export subsidies)

M Government procurement restrictions

Number of Cases by Problem Category

CEFTA SECRETARIAT

OBJECTIVES AND CHALLENGES

CEFTA SECRETARIAT

Objectives

CEFTA 2008 - 2012

• All commitments and deadlines met • Liberalisation of trade in goods • Diagonal cumulation • Opening of PP Market • TBT notification • State Aid notification • IPR review • Non-discrimination in Investment • CEFTA Trade Portal

CEFTA 2013 - 2020

• CEFTA implementation focused on • Liberalisation of trade in services • Elimination of NTBs • Trade Facilitation • Transparency

• Strategic synergies through SEE 2020 • Investment • Supply chains • Transportation channels etc.

CEFTA SECRETARIAT

Challenges

• In the years to come, implementation of CEFTA is involving the domains for which • Objectives of liberalisation are not explicitly defined by the Agreement; • Ministries responsible for Trade might not always have a direct

mandate over these domains, thus requiring involvement of other governmental bodies (e.g. elimination of NTBs, trade facilitation, liberalisation of trade in services, etc.);

• These areas require technically complex discussions, as well as coordinated efforts of both policy making Ministries and law enforcement authorities at the same time;

• Trade policy alone is not sufficient to optimise the impact of regional

trade liberalisation and European integration. Relevant synergies have to be identified and exploited in the programming and implementation of the SEE 2020 Strategy.

CEFTA SECRETARIAT

INTEGRATED GROWTH

Pillar 1 of the Strategy SEE 2020

CEFTA SECRETARIAT

From the Statement of the Ministerial Conference “South East Europe 2020- Towards Convergence and Growth”

Tirana, 9 November 2012

• SEE 2020 Headline targets • In order to raise regional competitiveness and future growth prospects, particularly in the face of the

global economic crisis, it is hereby agreed that the following regional headline targets should be met by 2020, using 2010 as the basis year:

• Overall strategic goals unifying the five pillars of SEE 2020: • Increase regional GDP PPP per capita from 38% to 46% of the EU-27 average • Grow the region’s total value of trade in goods and services by more than 130% • Reduce the region’s trade deficit from 14.1 to 11.6 % of regional GDP

• Headline targets to support the integrated growth pillar: • Increase intra-regional trade in goods by more than 230% • Increase overall FDI inflows to the region by at least 120%

• Headline targets to support the smart growth pillar: • Increase GDP per person employed by 33%

• Headline targets to support the sustainable growth pillar: • Increase the rate of enterprise creation to 20% • Increase exports of goods and services per capita from the region by 130%

• Headline targets to support the inclusive growth pillar: • Increase the overall employment rate by 12% • Add 300.000 highly educated people to the region’s workforce

• Headline targets to support the governance for growth pillar: • Increase government effectiveness by 20% by 2020.

CEFTA SECRETARIAT

From Ministerial Conclusions 6th CEFTA Joint Committee Meeting

Tirana, 8 November 2012

• The Ministers gave mandate to the CEFTA Structures to be actively involved in the programming and implementation of the SEE 2020 Strategy. • WE welcome the initiative of the South East Europe Investment

Committee to agree on key indicators for the regional economic growth to be accomplished by 2020, and emphasize the importance of trade policy, as a core component to achieving economic growth in an integrated and inclusive manner.

• Perceiving CEFTA as a genuine regional forum for all trade related discussions, we support active involvement of the CEFTA Structures and their cooperation with other regional actors and with the European Commission in relevant regional programmes and initiatives.

CEFTA SECRETARIAT

Programming Dimensions

Trade Liberalisation

Zero tariffs in agriculture

GATS Plus in services

Convergence to EU Common External Tariff

Elimination of peak tariff rates

Trade Facilitation

Synchronised harmonisation with

EU and WTO

Mutual recognition

Simplification

Risk based approach

Investment Climate

Investment Promotion

Facilitating the conditions for

investment

Coordination of investment policies

CEFTA SECRETARIAT

Instruments (schematic)

•Multilateral Investment Agreement

•Mutual Recognition Agreements (TBT, SPS, AEO etc)

•Agreement on trade in services Agreements

•Simplification of trade related procedures

•Abolishment of use of trade defence instruments in the Region

•Notification mechanisms

•Risk profiles

Decisions

•Network of Competition and State Aid Authorities

•Network of CEFTA Academia

•Network of CEFTA Private Sector

Regional networks

CEFTA SECRETARIAT

Wider Regional Integration

MED Countries

Russia, Turkey, EFTA, and

Ukraine, and other ENP

EU MS (Italy, Austria, Slovenia,

Hungary, Romania,

Bulgaria, Greece)

CEFTA

CEFTA SECRETARIAT

Key players

CEFTA Structures

Regional Projects

Other Regional Organisations and

Initiatives

SEE 2020 Integrated growth

THANK YOU.