WORLD TRADE
ORGANIZATIONWT/L/551
5 December 2003
(03-6501)
General Council
15, 16 and 18 December 2003Original:  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 5 December 2003, has been received from the
Permanent Delegation of the European Commission.
_______________
1. Introduction
1. On 8 December 2000, the EU was granted a waiver (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 eligible 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 Co mmunity is required to submit to the General
Council an annual report on the implementation of the autonomous preferential treatment with a viewto facilitating the annual review provided for in  paragraph 4 of Article IX of the WTO Agreement.
This report covers calendar year 2003.
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.  As
trade statistics for the current year are not yet available, those presented in the annex relate to the fullyear 2002.
2. Autonomous trade preferences
4. 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 extended the duty-free access to the EU market forproducts originating from this area even further.
5. The reason for such an extension was that the 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 improve the Community's autonomous trade preferences
                                                     
1 Document WT/L/380 of 8 December 2000.WT/L/551
Page 2
by removing all remaining tariff ceilings for industrial and agricultural products and by further
improving access to the Community market for agricultural and fishery products.
6. 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
7. 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 Europe, 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.
8. 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, intellectual property, public procurement, etc. are also
envisaged.
9. Two agreements of this kind have 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 agreements. Both agreements establish a free trade
area with the concerned country in line with the obligations foreseen in Article XXIV of the
GATT 1994.  At the same time they allow the continuation of the autonomous preferences wherethese provide more favourable conditions for the export of the goods originating in Croatia and in the
former Yugoslav Republic of Macedonia. Negotiatio ns 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
10. In the year 2002 EU imports from the Western Balkans concentrated primarily on agricultural
and textile products. However, the trade balance for the countries of the Western Balkans remained
negative for all sectors.  The stabilization 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.
11. Statistical annexes are provided to present a detailed description of the EU trade relations
with the countries of the Western Balkans for the year 2002.  The first annex describes the trade
relations with the countries of the Western Balkans as a whole, while the remaining annexes describein detail the trade relations with each country of the region.WT/L/551
Page 3
ANNEX 1
WESTERN BALKANS
Population: 2002 24  Mio
Area: (1,000skm) 264
Gross Domestic Prod. 2002 54 Bn euro
GDP Per Capita 2002 2,255 Euro
EU TRADE WITH WESTERN BALKANS (MIO ECU/EURO)
Rank 1993 1995 2001 2002 Rank 1993 1995 2001 2002
37 Imports 2,148 2,688 5,190 5,297 24 Exports 3,250 5,407 11,497 12,943
Share of EU
total (%)0.8 0.6 0.5 0.5 1.5 1.4 1.2 1.3
Trade balance 1,102 2,723 6,307 7,646
MAIN PRODUCTS IN 2002 (MIO EURO AND %)
EU Imports EU Exports
Products ValueWestern
Balkans
share by
prod.Products ValueWestern
Balkans
share by
prod.Balance
Agricultural products 907 1.1 Agricultural products 1,423 2.2 516
Energy 82 0.1 Energy 361 1.5 234
Machinery 546 0.2 Machinery 3,137 1.1 2,591
Transport. Material 190 0.2 Transport. Material 1,706 1.0 1,516
Chemical products 238 0.3 Chemical products 1,453 1.0 1,215
Textiles and clothing 1,142 1.6 Textiles and clothing 1,248 9.6 106
World*:  Intra-EU excluded.
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM).WT/L/551
Page 4
ANNEX 2
ALBANIA
Population: 2002 3 Mio
Area: (1000qkm) 2002 29
Gross Domestic Product 2002 5Bn euro
GDP Per Capita 2002 1.623 euro
EU TRADE WITH ALBANIA (MIO ECU/EURO AND %)
Rank Imports 1993 1995 2001 2002 Rank Exports 1993 1995 2001 2002
107 81 151 352 335 77 405 517 1094 1.08
2
Share of EU total 0.02 0.03 0.03 0.5 0.1 0.1 0.1 2.6
Trade balance 324 366 742 747
MAIN PRODUCTS IN 2002 (MIO EURO AND %)
EU Imports EU Exports Balance
Products Value Albania %
of EU total
by productsProducts Value Albania %
of EU total
by products
Agriculturalproducts41 0.05 Agricultural
products192 0.3 151
Energy 7 0.01 Energy 56 0.2 49
Machinery 14 0.01 Machinery 220 0.1 206
Transport
material2 0.001 Transport
material45 0.03 43
Chemical
products2 0.002 Chemical
products78 0.1 76
Textiles and
clothing97 0.1 Textiles and
clothing137 0.3 40
World*:  Intra-EU excluded
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).WT/L/551
Page 5
PLACE OF ALBANIA IN EU TRADE (2002)
EU Imports EU exports
Products Rank € M Share by
productsShare of
totalRank € M Share by
productsShare of
total
Total 107 335 0.03 100 77 1.082 0.1 100
Agricultural
products109 41 0.05 12.2 56 192 0.3 17.8
Energy 77 7 0.01 2.1 43 56 0.2 5.2
Non agr.
Raw
materials109 0.01 0 0 80 4 0.1 0.3
Office
machinery
and telecequipment65 6 0.004 1.7 67 71 0.1 6.6
Power
generating
machinery81 4 0.01 1.3 90 89 0.1 8.2
Transport
materials108 2 0.001 0.5 116 45 0.03 4.1
Chemicals 110 2 0.002 0.5 86 78 0.1 7.2
Textiles and
clothing55 97 0.1 28.9 41 137 0.3 12.7
Iron and
steel54 10 0.1 2.9 70 25 0.1 2.3
Source:  EUROSTAT (COMEST).WT/L/551
Page 6
ANNEX 3
BOSNIA HERZEGOVINA
Population: 2002 4  Mio
Area: (1000skm) 2001 51
Gross Domestic Product 2001 6 Bn euro
GDP Per Capita 2001 1,473 euro
EU TRADE WITH BOSNIA HERZEGOVINA (MIO ECU/EURO)
Rank Imports 1993 1995 2001 2002 Rank Exports 1993 1995 2001 2002
83 31 24 609 633 70 73 157 1.22
41.34
1
Share of EU total 0.01 0.004 0.1 0.9 0.02 0.02 0.1 3.2
Trade balance -289 -687 615 708
MAIN PRODUCTS IN 2002 (MIO EURO AND %)
EU Imports EU Exports Balance
Products Value BiH % of EU
total by
productsProducts Value BiH % of
EU total by
products
Agriculturalproducts94 0.1 Agricultural
products222 0.3 128
Energy 29 0.1 Energy 6 0.03 -23
Machinery 23 0.01 Machinery 305 0.1 282
Transport
material18 0.02 Transport
material153 0.1 135
Chemical
products4 0.01 Chemical
products126 0.1 122
Textiles and
clothing115 0.2 Textiles and
clothing119 0.3 4
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM).WT/L/551
Page 7
PLACE OF BOSNIA HERZEGOVINA IN EU TRADE (2002)
EU Imports EU exports
Products Rank € M Share by
productsShare of
totalRank € M Share by
productsShare of
total
Total 83 633 0.1 100 70 1.341 0.1 100
Agricultural
products91 94 0.1 14.9 50 222 0.3 16.6
Energy 66 29 0 4.5 89 6 0.03 0.5
Non agr.
Raw
materials99 0.02 0 0 74 4 0.1 0.3
Office
machinery
and telecequipment103 1 0.001 0.2 61 94 0.1 7
Power
generating
machinery59 21 0.03 3.4 74 164 0.1 12.3
Transport
materials75 18 0.02 2.9 76 153 0.1 11.4
Chemicals 94 4 0.01 0.7 73 126 0.1 9.4
Textiles and
clothing52 115 0.2 18.2 47 119 0.3 8.9
Iron and
steel51 12 0.1 1.9 71 25 0.1 1.8
source:  EUROSTAT (COMEXT).WT/L/551
Page 8
ANNEX 4
CROATIA
Population: 2002 4 Mio
Area: (1000qkm) 2002 57
Gross Domestic Product 2002 23Bn euro
GDP Per Capita 2002 5,143 Euro
EU TRADE WITH CROATIA (MIO ECU/EURO AND %)
Rank Imports 1980 1990 2001 2002 Rank Exports 1980 1990 2001 2002
53 203 427 2.470 2.457 33 122 179 5.41
56.47
8
Share of EU total 0.1 0.1 0.2 0.2 0.1 0.01 0.6 0.7
Trade balance -81 -248 2.945 4.021
MAIN PRODUCTS IN 2002 (MIO EURO AND %)
EU Imports EU Exports Balance
Products Value Croatia %
of EU total
by productsProducts Value Croatia %
of EU total
by products
Agriculturalproducts302 0.4 Agricultural
products563 0.9 261
Energy 35 0.03 Energy 169 0.7 134
Machinery 418 0.2 Machinery 1.564 0.6 1.146
Transport
material82 0.1 Transport
material1.109 0.7 1.027
Chemical
products178 0.2 Chemical
products742 0.5 564
Textiles and
clothing546 0.8 Textiles and
clothing563 1.3 17
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).WT/L/551
Page 9
PLACE OF CROATIA IN EU TRADE (2002)
EU Imports EU exports
Products Rank € M Share by
productsShare of
totalRank € M Share by
productsShare of
total
Total 53 2.457 0.2 100 33 6.478 0.7 100
Agricultural
products53 302 0.4 12.3 24 563 0.9 8.7
Energy 64 35 0.03 1.4 21 169 0.7 2.6
Non agr.
Raw
materials27 13 0.2 0.5 36 25 0.7 0.4
Office
machinery
and telecequipment35 76 0.1 3.1 34 455 0.5 7.0
Power
generating
machinery31 158 0.2 6.4 37 809 0.5 12.5
Transport
materials54 82 0.1 3.3 30 1.109 0.7 17.1
Chemicals 35 178 0.2 7.2 35 742 0.5 11.5
Textiles and
clothing27 546 0.8 22.2 20 563 1.3 8.7
Iron and
steel43 22 0.2 0.9 36 133 0.7 2.1
Source:  EUROSTAT (COMESX).WT/L/551
Page 10
ANNEX 5
FORMER YUGOSLAV REPUBLIC OF MACEDONIA (FYROM)
Population: 2002 2 Mio
Area:  (1000skm) 2002 26
Gross Domestic
Product2002 4 Bn euro
GDP Per Capita 2002 1.976 euro
EU TRADE WITH FYROM (MIO ECU/EURO)
Rank Imports 1993 1995 2001 2002 Rank Exports 1993 1995 2001 2002
90 535 664 640 562 79 675 880 1,15
91.02
1
Share of EU total 0.1 0.1 0.1 0.1 0.1 0.2 0.1 0.1
Trade balance 140 216 520 459
MAIN PRODUCTS IN 2002 (MIO EURO AND %)
EU Imports EU Exports Balance
Products Value FYROM
Share of
EU total by
productsProducts Value FYROM
Share of EU
total by
products
Agriculturalproducts78 0.1 Agricultural
products137 0.2 59
Energy 0.1 0.00012 Energy 108 0.4 108
Machinery 21 0.01 Machinery 166 0.1 145
Transport
material4 0.003 Transport
material87 0.1 83
Chemical
products6 0.01 Chemical
products86 0.1 80
Textiles and
clothing236 0.3 Textiles and
clothing208 0.5 -28
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).WT/L/551
Page 11
PLACE OF FYROM IN EU TRADE – 2002
EU Imports EU exports
Products Rank € M Share by
productsShare of
totalRank € M Share by
productsShare of
total
Total 90 562 0.1 100 79 1.021 0.1 100
Agricultural
products95 78 0.1 13.8 62 137 0.2 13.4
Energy 97 0.1 0 0.02 26 108 0.4 10.6
Non agr.
Raw
materials85 0.1 0.001 0.01 84 3 0.1 0.3
Office
machinery
and telecequipment72 3 0.003 0.6 76 56 0.1 5.5
Power
generating
machinery91 3 0.004 0.6 92 83 0.1 8.1
Transport
materials103 4 0.003 0.7 96 87 0.1 8.5
Chemicals 80 6 0.008 1.1 84 86 0.1 8.4
Textiles and
clothing41 236 0.3 42.0 33 208 0.5 20.4
Iron and
steel26 111 0.9 19.7 75 21 0.1 2.1
Source: Eurostat (Comext)WT/L/551
Page 12
ANNEX 6
SERBIA AND MONTENEGRO
Population: 2002 11 Mio
Area: (1000qkm) 102
EU TRADE WITH SERBIA AND MONTENEGRO (MIO ECU/EURO AND %)
Rank Imports 1993 1995 2001 2002 Rank Exports 1993 1995 2001 2002
65 3 32 1.097 1.310 45 83 190 2.52
13.01
6
Share of EU total 0.001 0.01 0.1 1.9 0.02 0.03 0.3 7.1
Trade balance 80 159 1.424 1.706
MAIN PRODUCTS IN 2002 (MIO EURO AND %)
EU Imports EU Exports Balance
Products Value Serbia and
Montenegro
% of EU
total byproductsProducts Value Serbia and
Montenegro
% of EU
total byproducts
Agriculturalproducts392 0.5 Agricultural
products308 0.5 -84
Energy 11 0.8 Energy 22 0.1 11
Machinery 69 0.03 Machinery 881 0.3 812
Transport
material85 0.1 Transport
material311 0.2 226
Chemical
products48 0.1 Chemical
products419 0.3 371
Textiles and
clothing148 0.2 Textiles and
clothing220 0.5 72
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).WT/L/551
Page 13
PLACE OF SERBIA-MONTENEGRO IN EU TRADE (2002)
EU Imports EU exports
Products Rank € M Share by
productsShare of
totalRank € M Share by
productsShare of
total
Total 65 1.310 0.1 100 45 3.016 0.3 100
Agriculturalproducts45 392 0.5 29.9 41 308 0.5 10.2
Energy 74 11 0.01 0.8 58 22 0.1 0.7
Non agr.
Raw
materials23 19 0.3 1.4 51 13 0.3 0.4
Office
machineryand telec
equipment57 9 0.01 0.7 43 286 0.3 9.5
Power
generating
machinery44 46 0.1 3.5 49 473 0.3 15.7
Transport
materials52 85 0.1 6.5 59 311 0.2 10.3
Chemicals 50 48 0.1 3.7 47 419 0.3 13.9
Textiles and
clothing48 148 0.2 11.3 30 220 0.5 7.3
Iron and
steel38 51 0.4 3.9 53 47 0.2 1.6
Source:  EUROSTAT (COMEXT).
__________