Kosovo

EFTA’s objectives in the free trade negotiations with the Republic of Kosovo

General overview

EFTA aims at achieving an ambitious free trade agreement with Kosovo covering the relevant fields on the free trade agenda and in line with the respective trade interests and sensitivities of all Parties. The goal is to conclude an agreement that promotes preferential trade relations, which contribute to sustainable development and is beneficial to all.

In 2016, the European Union and Kosovo strengthened their relations by completing the implementation of the Stabilisation and Association Agreement, which covers important elements of interest to EFTA and its business community.

In 2018, EFTA and Kosovo formalised their shared ambition of strengthening their economic relations by signing a Joint Declaration on Cooperation (JDC). They met in the Joint Committee under the JDC on 19 November 2020 to review bilateral trade flows and decided to start free trade negotiations once the necessary mandates were in place.

Trade picture

Exports from the EFTA States to Kosovo have increased by 50 % since 2012 and amounted to almost 70 million USD in 2021. Key exports include vehicles, tobacco, and pharmaceutical products.

The EFTA States import furniture, plastics, and articles of iron and steel from Kosovo. Import figures are growing rapidly and are almost 9 times higher in 2021 than in 2012. Last year, EFTA’s imports from Kosovo amounted to almost 60 million USD.

Trade in goods

EFTA will aim for elimination of all customs duties on industrial products, as well as fish and other marine products from the entry into force of the agreement. For agricultural products, market access will be negotiated individually by each EFTA State based on their specific trade interests. The respective sensitivities related to domestic production and policies of the individual EFTA States will be considered. EFTA aims at excluding the use of export duties and building on the central GATT provisions from the World Trade Organisation agreements for trade in goods.

Rules of origin and customs cooperation

As Kosovo and the EFTA States are all Parties to the pan-Euro-Mediterranean (PEM) Convention on preferential rules of origin, EFTA foresees a link to the PEM rules with the option of using the transitional more trade-friendly rules as an alternative.

Trade Facilitation

To ease the movement of goods and reduce costs in trade between the Parties, EFTA will work for expedited procedures and transparent rules for trade in goods and related services. EFTA will aim at introducing border and customs procedures in line with or exceeding relevant international standards and agreements.

Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS)

In the fields of technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS) EFTA aims at including core provisions building on the WTO agreements on SPS and TBT.

Trade remedies

Based on the WTO legal framework, EFTA aims to limit the possibility for all parties to take trade remedy measures between them, i.e. to prohibit anti-dumping measures and to exclude products from global safeguard measures if they do not cause or threaten to cause a serious injury to the importing Party. EFTA further seeks to include bilateral safeguard measures and elements going beyond its WTO obligations for notifications and pre-emptive consultations.

Investment, Services and Government Procurement

EFTA intends to cover these three areas in a joint chapter, focusing on cooperation and the possibility for the Joint Committee to review the provisions after entry into force. EFTA’s proposal covers transparency and non-discrimination in Government Procurement and Investment promotion, in addition to referring to ongoing work under the auspices of the WTO.

Intellectual property rights

EFTA’s objective is to ensure the protection and enforcement of intellectual property rights by building upon and where appropriate enhancing standards of protection recognised and provided for in relevant international treaties such as the WTO TRIPS agreement, as well as treaties administered by WIPO.

Competition

EFTA aims to negotiate disciplines that ensure that trade liberalisation will not be impaired by anti-competitive practices of private or public undertakings that may prevent, restrict, or distort competition.

Trade and sustainable development

With the view to ensure preferential trade relations that contribute to sustainable development, EFTA aims to include a dedicated chapter on trade and sustainable development in which the Parties commit to and affirm obligations under relevant international environmental agreements and labour instruments.

The Parties shall further promote trade and investment favouring sustainable development and commit to the sustainable management of natural resources through specific provisions in areas such as forestry, biological diversity, fisheries and aquaculture, agriculture and food systems and associated trade, including a commitment to effectively implement the United Nations Framework Convention on Climate Change and the Paris Agreement. The chapter shall also provide the possibility to establish a panel of experts competent to issue recommendations towards the resolution of a matter regarding the implementation of the chapter.

Horizontal Issues, Institutional Provisions and Dispute Settlement

EFTA’s proposal for a preamble (i.e. an introductory part) to the Agreement refers to general principles and affirmation of the Parties’ commitments under relevant international instruments in the areas of human rights, labour standards and environment protection.

EFTA seeks to establish a Joint Committee between the Parties that shall review the implementation and operation of the Agreement and further develop and expand it as deemed appropriate. The Joint Committee shall make recommendations and take decisions by consensus. It shall be empowered to amend the annexes and appendices of the Agreement.

Lastly, a procedure shall be established allowing for consultations and amicable solutions in the Joint Committee, and for arbitration in case of disputes that the Parties have not been able to resolve.