WORLD TRADE  
ORGANIZATION  WT/L/596 
3 December 2004 
 (04-5346) 
General Council 
13-14 December 2004 Original:   English 
 
 
EC – AUTONOMOUS PREFERENTIAL TREATMENT TO THE COUNTRIES 
OF THE WESTERN BALKANS 
 
Report of the European Community under the Decision of 8 December 20001 
 
  The following communication, dated 3 December 2004, is being circulated at the request of 
the Delegation of the European Commission.  
_______________ 
  
1. Introduction 
1. On 8 December 2000, the EU was granted a wa iver (WT/L/380) from its obligations under 
paragraph 1 of Article I of the GATT 1994 to the extent necessary to permit the European Community 
to afford duty-free or preferential treatment to e ligible products originating in Albania, Bosnia-
Herzegovina, Croatia, the former  Yugoslav Republic of Macedonia and Serbia and Montenegro, 
without being required to extend the same duty-free or  preferential treatment to like products of any 
other member.  This waiver will expire on 31 December 2006. 
2. Under the terms of this waiver, the European Community is required to submit to the General 
Council an annual report on the implementation of th e autonomous preferential treatment with a view 
to facilitating the annual review pr ovided for in paragraph 4 of Artic le IX of the WTO Agreement.  
This report covers calendar year 2004. 
3. The EU trade regime vis-à-vis  these countries is currently regulated by the granting of 
autonomous trade preferences and by the conclusion of Stabilization and Association Agreements.  
4. As of 1 May 2004, the ten new EU Member States took over the above-mentioned EU trade 
regime towards the Western Balkans. To reflect this development, trade statistics presented below 
were recalculated for the EU at 25 Member States. As data for the full current year are not yet 
available, statistics presented relate to the year 2003. 
2. Autonomous trade preferences 
5. Before 2000, the European Union already had a liberal trade regime towards the Western 
Balkans, allowing more than 80 per cent of regional exports to enter the European Union duty-free.  
On 1 December 2000 the EU Council of Ministers ex tended the duty-free access to the EU market for 
products originating from this area even further. 
6. The reason for such an extension was that th e general level of imports from the Western 
Balkans countries remained very low, being less than  0.5 per cent of all Community imports.  It was, 
therefore, considered appropriate to further im prove the Community's autonomous trade preferences 
                                                     
 
1 WT/L/380. WT/L/596 
Page 2  
 
by removing all remaining tariff ceilings for indu strial and agricultural products and by further 
improving access to the Community market for agricultural and fishery products. 
7. Further market opening is expected to contribute to the process of political and economic 
stabilisation in the region.  Fully liberalized access  to the markets of the European Union is also 
foreseen as part of the Stabilization and Association Agreements. 
3. The Stabilization and Association Agreements 
8. The Stabilization and Association Agreements, which the EU is progressively concluding 
with the countries of the Western Balkans, are tools  which provide, much as the Europe Agreements 
did for the candidate countries in Central Euro pe, for the economic development and political 
stabilisation of the countries in the region, and to establish a close, long-term association between the 
EU and the Western Balkans. 
9. The Stabilization and Association Agreements aim at creating a free trade area for goods 
among the parties over a transitional period in line with Article XXIV of the GATT 1994 and 
envisages a progressive and reciprocal liberalisation of trade in services. Associated disciplines in 
areas such as competition and state aid rules, intell ectual property, public procurement, etc. are also 
envisaged. 
10. Two agreements of this kind ha ve been concluded so far.  One with the former Yugoslav 
Republic of Macedonia and one with Croatia.  The trade provisions of these two agreements entered 
into force on, respectively, 1 June 2001 for the former Yugoslav Republic of Macedonia and 
1 March 2002 for Croatia, by means of interim ag reements. Both agreements establish a free trade 
area with the concerned country in line with th e obligations foreseen in Article XXIV of the 
GATT 1994.  At the same time they allow the c ontinuation of the autonomous preferences where 
these provide more favourable conditions for the export  of the goods originating in Croatia and in the 
former Yugoslav Republic of Macedonia.  
11. The Stabilisation and Association Agreemen t with the former Yugoslav Republic of 
Macedonia entered into force on 1 April 2004. The na tional ratification procedures in the EU Member 
States of the Stabilisation and Association Agreemen t with Croatia where completed in the course of 
2004. The EU procedure for the entry into force of this agreement is ongoing. 
12. Negotiations on a Stabilisation and Association Agreement with Albania started on 
31 January 2003 and are ongoing.  
4. Trade with the countries of the Western Balkans 
13. In the year 2003 EU imports from the Western Ba lkans concentrated primarily on agricultural 
and textile products. However, the trade balance fo r the countries of the Western Balkans remained 
negative for all sectors.  Total trade with the Western Balkans remained also low, at 0.6% of total EU 
trade with the rest of the world. The stabili zation of the area and the new export opportunities 
described in the precedent paragraphs should help the Western Balkans countries to diversify their 
economies and to ameliorate such a trade balance. 
14. Statistical annexes are provided to present a de tailed description of the EU trade relations 
with the countries of the Western Balkans for the year 2003.  The first annex describes the trade 
relations with the countries of the Western Balkan s as a whole, while the remaining annexes describe 
in detail the trade relations with each country of the region.  WT/L/596 
 Page 3 
 
 
 
 ANNEX 1 
 
WESTERN BALKANS 
 
 
Population:  2003 24.2  Mio 
Area: (1,000skm) 264  
 
 
Gross Domestic Prod. 2003 60 Bn euro 
GDP Per Capita  2003 2,255 Euro 
 
 
EU-25 TRADE WITH WESTERN BALKANS (MIO ECU/EURO) 
 
 1999 2000 2002 2003  1999 2000 2002 2003 
Imports 4,422 5,532 6,238 6,641 Exports 10,262 12,468 16,788 17,274
Share of EU total 
(%) 0.6 0.6 0.7 0.7 1.5 1.5 1.9 1.9
Trade balance 5,840 6,936 10,551 10,663   
 
 
MAIN PRODUCTS IN 2003 (MIO EURO AND %)  
 
EU Imports    EU Exports     
Products Value Western 
Balkans 
share by 
prod. Products Value Western 
Balkans 
share by 
prod. Balance  
Agricultural products 1,076 1.3 Agricultural products 2,074 3.6 998
Energy 215 0.1 Energy 493 2.15 278
Machinery 724 0.3 Machinery 3,948 1.6 3,224
Transport. Material 335 0.4 Transport. Material 2,108 1.4 1,773
Chemical products 395 0.5 Chemical products 2,058 1.5 1,663
Textiles and clothing 1,179 1.7 Textiles and clothing 1,423 4.2 244
 
World*:  Intra-EU excluded. 
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM). WT/L/596 
Page 4  
 
ANNEX 2 
 
ALBANIA 
 
 
Population:  2003 3.2 Mio 
Area: (1000qkm) 2003 29  
 
Gross Domestic Product  2003 5Bn euro 
GDP Per Capita  2003 1,682 euro 
 
 
EU-25 TRADE WITH ALBANIA (MIO ECU/EURO AND %) 
 
Rank  Imports 1999 2000 2002 2003 Rank Exports 1999 2000 2002 2003 
92 232 279 336 360 63 728 836 1,117 1,115 
Share of EU total 0.03 0.03 0.04 0.04  0.1 0.1 0.1 0.1 
Trade balance 496 557 781 755      
 
 
 
 
MAIN PRODUCTS IN 2003 (MIO EURO AND %)  
 
EU Imports EU Exports Balance 
       
Products Value Albania % of EU 
total by products Products Value Albania % of EU 
total by products  
Agricultural 
products 36 0.05 Agricultural 
products 201 0.34 165 
Energy 4 - Energy 30 0.13 26 
Machinery 19 0.01 Machinery 223 0.1 204 
Transport 
material 2 - Transport 
material 59 0.04 57 
Chemical 
products 2 - Chemical 
products 91 0.06 89 
Textiles and 
clothing 107 0.16 Textiles and 
clothing 152 0.45 45 
 
World*:  Intra-EU excluded 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM). 
 
 
 
 
  WT/L/596 
 Page 5 
 
 
 
  
 
 
 
PLACE OF ALBANIA IN EU TRADE (2003) 
 
EU Imports EU exports 
Products Rank € M  Share by 
products Share of 
total Rank € M  Share by 
products Share of 
total 
Total 92 360 0.04 100 63 1,115 0.13 100 
Agricultural products 108 36 0.05 10.1 45 201 0.34 18,1 
Energy 70 4 - 1.1 46 30 0.13 2.7 
Non agr. Raw materials 81 2 - 0.5 70 24 0.1 2.2 
Office machinery and 
telec equipment 60 4 - 1.1 70 54 0.07 4.8 
Power generating 
machinery 57 10 0.02 2.8 78 96 0.07 8.6 
Transport materials 104 2 - 0.6 99 59 0.04 5.3 
Chemicals 99 2 - 0.5 75 91 0.06 8.1 
Textiles and clothing 45 107 0.16 29.7 33 152 0.45 13.7 
Iron and steel 44 17 0.13 4.7 61 27 0.14 2.4 
 
  
 
Source:  EUROSTAT (COMEST). 
 WT/L/596 
Page 6  
 
ANNEX 3 
 
BOSNIA HERZEGOVINA 
 
Population:  2003 4.2  Mio 
Area: (1000skm) 2003 51
 
Gross Domestic Product  2003 6 Bn euro 
GDP Per Capita  2003 1,495 euro 
 
 
EU-25 TRADE WITH BOSNIA HERZ EGOVINA (MIO ECU/EURO AND %) 
 
 
 
Rank  Imports 1999 2000 2002 2003 Rank Exports 1999 2000 2002 2003 
69 421 610 719 847 47 1,153 1,853 2,273 2190 
Share of EU total 0.06 0.06 0.08 0.09  0.23 0.22 0.25 0.25 
Trade balance 1,132 1,243 1,554 1,343      
 
 
 
 
MAIN PRODUCTS IN 2003 (MIO EURO AND %) 
 
 
EU Imports EU Exports Balance 
       
Products Value BiH % of EU total 
by products Products Value BiH % of EU total 
by products  
Agricultural 
products 126 0.16 Agricultural 
products 467 0.80 341 
Energy 36 0.02 Energy 84 0.37 48 
Machinery 39 0.02 Machinery 378 0.15 339 
Transport 
material 69 0.07 Transport 
material 210 0.14 141 
Chemical 
products 4 0.01 Chemical 
products 231 0.16 227 
Textiles and 
clothing 121 0.18 Textiles and 
clothing 155 0.46 34 
 
 
 
 
 
World*:  Intra-EU exclu. 
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM).   WT/L/596 
 Page 7 
 
 
 
  
PLACE OF BOSNIA HERZEGOVINA IN EU TRADE (2003) 
 
EU Imports EU exports 
Products Rank € M  Share by 
products Share of 
total Rank € M  Share by 
products Share of 
total 
Total 69 847 0.09 100 47 2,190 0.25 100 
Agricultural products 78 126 0.16 14.9 26 467 0.80 21.3 
Energy 57 36 0.02 4.2 24 84 0.37 3.8 
Non agr. Raw 
materials 52 21 0.02 2.5 49 83 0.41 3.8 
Office 
machinery 
and telec equipment 78 1 - 0.2 60 79 0.11 3.6 
Power 
generating 
machinery 44 32 0.05 3.8 57 216 0.16 9.9 
Transport 
materials 52 69 0.07 8.2 66 210 0.14 9.6 
Chemicals 78 4 0.01 0.5 52 231 0.16 10.6 
Textiles and 
clothing 43 121 0.18 14.3 30 155 0.46 7.1 
Iron and steel 42 23 0.18 2.7 46 57 0.31 2.6 
 
Source:  EUROSTAT (COMEXT). WT/L/596 
Page 8  
 
ANNEX 4 
 
CROATIA 
 
Population:  2003 4.4 Mio 
Area: (1000qkm) 2003 57  
Gross Domestic Product  2003 20Bn euro 
GDP Per Capita  2003 4,567 euro 
 
 
EU-25 TRADE WITH CROATIA (MIO ECU/EURO AND %) 
 
 
Rank  Imports 1999 2000 2002 2003 Rank Exports 1999 2000 2002 2003 
41 2,465 2,860 3,078 3,301 24 5,059 5,893 8,261 8,889 
Share of EU total 0.33 0.29 0.33 0.35  0.73 0.69 0.92 1.01 
Trade balance 2,594 3,033 5,183 5,587      
 
 
 
 
MAIN PRODUCTS IN 2003 (MIO EURO AND %)  
 
 
EU Imports EU Exports Balance 
       
Products Value Croatia % of 
EU total by 
products Products Value Croatia % of 
EU total by 
products  
Agricultural 
products 479 0.61 Agricultural 
products 844 1.45 365 
 
Energy 133 0.09 Energy 266 1.16 133 
Machinery 548 0.23 Machinery 2,001 0.81 1453 
Transport 
material 207 0.22 Transport 
material 1,366 0.93 1159 
Chemical 
products 298 0.37 Chemical 
products 1,055 0.74 757 
Textiles and 
clothing 541 0.81 Textiles and 
clothing 642 1.90 101 
 
 
 
World*:  Intra-EU exclu. Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).   WT/L/596 
 Page 9 
 
 
 
 PLACE OF CROATIA IN EU TRADE (2003) 
  
EU Imports EU exports 
Products Rank € M  Share by 
products Share of 
total Rank € M  Share by 
products Share of 
total 
Total 41 3,301 0.35 100 24 8,889 1.01 100 
Agricultural products 35 479 0.61 14.5 15 844 1.45 9.5 
Energy 43 133 0.09 4.0 12 266 1.16 3.0 
Non agr. Raw 
materials 23 86 0.07 2.6 35 153 0.75 1.7 
Office 
machinery and telec 
equipment 30 65 0.05 2.0 29 474 0.65 5.3 
Power 
generating machinery 25 197 0.32 6.0 27 1,031 0.77 11.6 
Transport 
materials 35 207 0.22 6.3 21 1,366 0.93 15.4 
Chemicals 24 298 0.37 9.0 28 1,055 0.74 11.9 
Textiles and 
clothing 23 541 0.81 16.4 14 642 1.90 7.2 
Iron and steel 41 26 0.20 0.8 17 310 1.65 3.5 
 
Source:  EUROSTAT (COMEXT). 
 WT/L/596 
Page 10  
 
ANNEX 5 
 
FORMER YUGOSLAV REPUBLIC OF MACEDONIA (FYROM) 
 
Population:  2003 2.1 Mio 
Area:  (1000skm) 2003 26  
 
 
Gross Domestic 
Product  2003 4 Bn euro 
GDP Per Capita  2003 1,993 euro 
 
 
EU-25 TRADE WITH FYROM (MIO ECU/EURO AND %) 
 
Rank  Imports 1999 2000 2002 2003 Rank Exports 1999 2000 2002 2003 
73 642 813 593 674 60 1,417 1,584 1,264 1,152 
Share of EU total 0.09 0.08 0.06 0.07  0.21 0.18 0.14 0.13 
Trade balance 775 771 671 478      
 
 
 
MAIN PRODUCTS IN 2003 (MIO EURO AND %)  
 
EU Imports EU Exports Balance 
Products Value FYROM 
Share of EU 
total by 
products Products Value FYROM 
Share of EU 
total by 
products  
Agricultural 
products 82 0.10 Agricultural 
products 177 0.30 95 
Energy 21 0.01 Energy 42 0.18 
 21 
Machinery 24 0.01 Machinery 209 0.08 185 
Transport material 4 - Transport 
material 73 0.05 69 
Chemical products 6 0.01 Chemical 
products 135 0.10 129 
Textiles and 
clothing 257 0.39 Textiles and 
clothing 236 0.70 -21 
 
World*:  Intra-EU exclu. Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM). 
 
  WT/L/596 
 Page 11 
 
 
 
 PLACE OF FYROM IN EU TRADE – 2003 
 
 
EU Imports EU exports 
Products Rank € M  Share by 
products Share of 
total Rank € M  Share by 
products Share of 
total 
Total 73 674 0.07 100 60 1,152 0.13 100 
Agricultural products 88 82 0.10 12.2 51 177 0.30 15.3 
Energy 61 21 0.01 3.1 39 42 0.18 3.6 
Non agr. Raw materials 71 17 0.01 2.5 93 29 0.14 2.5 
Office machinery and 
telec equipment 79 1 - 0.2 61 78 0.11 6.8 
Power generating 
machinery 72 5 0.01 0.7 83 92 0.07 8.0 
Transport materials 87 4 - 0.7 89 73 0.05 6.3 
Chemicals 71 6 0.01 0.9 61 135 0.10 11.7 
Textiles and clothing 32 257 0.39 38.1 25 236 0.70 20.5 
Iron and steel 21 160 1.24 23.7 64 25 0.14 2.2 
 
  
Source: Eurostat (Comext).WT/L/596 
Page 12  
 
ANNEX 6 
 
SERBIA AND MONTENEGRO 
 
 
Population:  2003 10.5 Mio 
Area:  (1000qkm) 102  
Gross Domestic 
Product  2003 18 Bn euro 
GDP Per Capita  2003 1,725 euro 
 
 
 
EU-25 TRADE WITH SERBIA AND MON TENEGRO (MIO ECU/EURO AND %) 
 
Rank  Imports 1999 2000 2002 2003 Rank Exports 1999 2000 2002 2003 
56 662 970 1,511 1,459 35 1,505 2,302 3,873 3,929 
Share of EU total 0.09 0.10 0.16 0.16  0.22 0.27 0.43 0.45 
Trade balance 843 1,332 2,362 2,470      
 
  
 
MAIN PRODUCTS IN 2003 (MIO EURO AND %) 
 
 
EU Imports EU Exports Balance 
       
Products Value Serbia and 
Montenegro 
% of EU total 
by products Products Value Serbia and 
Montenegro  
% of EU total 
by products  
Agricultural 
products 353 0.45 Agricultural 
products 386 0.66 33 
Energy 21 0.01 Energy 71 0.31 50 
Machinery 94 0.04 Machinery 1,137 0.46 1,043 
Transport 
material 52 0.06 Transport 
material 400 0.27 348 
Chemical 
products 85 0.11 Chemical 
products 546 0.38 461 
Textiles and 
clothing 153 0.23 Textiles and 
clothing 237 0.70 84 
 
 
 World*:  Intra-EU exclu. 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM). WT/L/596 
Page 13 
 
 PLACE OF SERBIA-MONTENEGRO IN EU TRADE (2003) 
  
EU Imports EU exports 
Products Rank € M  Share by 
products Share 
of total Rank € M  Share by 
products Share 
of total 
Total 56 1,459 0.16 100 35 3,929 0.45 100 
Agricultural products 42 353 0.45 24.2 31 386 0.66 9.8 
Energy 62 21 0.01 1.4 31 71 0.31 1.8 
Non agr. Raw 
materials 22 17 0.01 1.2 41 55 0.27 1.4 
Office machinery 
and telec equipment 48 10 0.01 0.7 34 333 0.45 8.5 
Power generating 
machinery 37 63 0.10 4.3 38 606 0.45 15.4 
Transport materials 58 52 0.06 3.6 48 400 0.27 10.2 
Chemicals 40 85 0.11 5.8 36 546 0.38 13.9 
Textiles and clothing 40 153 0.23 10.5 24 237 0.70 6.0 
Iron and steel 28 70 0.54 4.8 38 93 0.49 2.4 
 
Source:  EUROSTAT (COMEXT). 
 
 
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