WT/REG129/R/I  
 
22 August  2017 
(17-4490) Page: 1/8 
Committee on Regional Trade Agreements  Original: English  
 
EUROPEAN UNION -THE FORMER YU GOSLAV REPUBLIC OF M ACEDONIA 
IMPLEMENTATION REPOR T 
JOINT SUBMISSION BY THE PARTIES ON THE S TABILISATION AND ASS OCIATION 
AGREEMENT BETWEEN TH E FORMER YUGOSLAV RE PUBLIC OF MACEDONIA AND THE 
EUROPEAN UNION  
 
 This Implementation Rep ort has been drafted in accordance with Article 15 of the 
Transparency Mechanism Decision and following the draft guidelines contained in JOB/REG/4 
issued in January 2013.  
 
 This report does not prejudge the Parties' position on the concept and the duratio n of the 
implementation periods in FTAs and their relationship to the "reasonable length of time" within the 
meaning of Art. XXIV:5(c) of the GATT 1994 or "the reasonable time -frame" within Art. V:1(b) of 
the GATS.  
 
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1  BACKGROUND INFORMATI ON ON THE AGREEMENT  
1.1.  All countries of the Western Balkans have a European perspective. The European perspective 
of the Western Balkan countr ies and territories was recognis ed during the Feira European Council 
in 2000 and confirmed by the Thessaloniki Europea n Council in 2003. This European perspective1 
is integrated into the Stabilisation and Association Process, which is the EU's policy in relation to 
the countries of the Western Balkans.  
1.2.  The Stabilisation and Association Agreements (SAAs), which the EU has progressively 
concluded with the countries and territories of the Western Balkans, are tools which provide for the 
economic development and political stabilisation of the countries in the region, and for the creation 
of a close, long -term association betwe en the EU and the Western Balkans. The SAAs constitute 
the legal instrument for alignment to the EU acquis and progressive integration into the EU 
market.  
1.3.  The Stabilisation and Association Agreement (SAA) between the EU and the former Yugoslav 
Republic of Macedonia was signed on 9 April 2001. With reference to trade in goods, it was 
complemented by an Interim Ag reement that entered into force on 1 June 2001 to allow the EU 
and the former Yugoslav Republic of Macedonia  to benefit from the trade and trade -related 
provisions until the entry into force of the Stabilisation and Association Agreement on 1 April 2004. 
After the last three EU enlargements, the 10+2+1 new EU Member States became contracting 
parties in 2004, 2007 and 2013 respectively.  
1.4.  The SAA contain s provisions on both goods and services. The relevant aspects of the SAA for 
the liberalization of trade in services are contained in Title V (Movement of Workers, 
Establishment, Supply of Services, Current Payments and Movement of Capital).  
                                                
1 Each year the Commission adopt s its "Enlargement package" - a set of documents explaining its policy 
on EU enlargement. Most importantly, this package includes  the Enlargement Strategy Paper  which sets out 
the way forward and takes stock of the progress made by each candidate country a nd potential candidate. In 
addition to this strategy paper, the package contains the Reports in which the Commission services present 
their assessment of what each candidate and potential candidate has achieved over the last year, and set out 
guidelines on  reform priorities.  WT/REG129/R/I  
 
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  1.5.  Statistical d ata on trade in goods and on trade in services between the Parties as well as 
some indications on Parties' import coverage after full implementation of the SAA can be found in 
Annexes 1 and 2 of this report.  
2  PROVISIONS ON TRADE IN GOODS  
2.1  Import duties and charges, and quantitative restrictions  
2.1.  Trade liberalisation between the EU and the former Yugoslav Republic of Macedonia has been 
completed over a maximum period of ten years.  More specifically, all imports of industrial and 
agricultural goods (except for baby beef and wine) originating in the former Yugoslav Republic of 
Macedonia were totally liberalised from the entry into force of the Agreement.  Only imports into 
the EU of some fishery products originating in the former Yugoslav Republic of Macedonia wer e 
subject to a tariff reduction over a period of three years (Annex V(a)). Imports into the former 
Yugoslav Republic of Macedonia of industrial products originating in the EU were liberalised over a 
ten-year period (Annex I and II) while agricultural produ cts (Annex IV), processed agricultural 
products (Annex VI) and fishery products (Annex V(b)) were subject to a shorter liberalisation 
period of six years.  Some goods as explained further below were subject to Tariff Rate Quotas.  
2.2.  During the implementation p eriod, no change was made to the original liberalisation 
schedules.  
2.1.1   Tariffs  
2.3.  Please refer to Annexes I to V of the Agreement:  
 EU's tariff elimination schedule:  
 
http://eur -lex.europa.eu/legal -
content/EN/TXT/?uri=uriserv:OJ.L_.2004.084.01.0013.01.ENG&toc=OJ:L:2004:084:TOC  
 
  The former Yugoslav Republic of Macedonia's tariff elimination schedule:  
http://customs.gov.mk/images/documents/vodicTarifa/Vodic_za_carinenje_na_stoki_en2.xls  
 
2.1.2   Tariff quotas  
2.4.  The tariff rate quotas that are in place under the Agreement have been applied as of its  entry 
into force, in accordance with the conditions mentioned in Art. 27 and in Annex IV of the 
Agreement. These quotas are managed on a first -come first -served basis.  
2.5.  The EU maintained tariff -rate quotas on baby -beef products; the former Yugoslav Republ ic of 
Macedonia maintained tariff -rate quotas on some agricultural products including meat, butter, 
milk, cheese, citrus fruits, olives, maize, sugar, and crude oil.  
2.6.  Since the entry into force of the Agreement, there were no particular issues to report. T he 
Agreement has been amended to take into account the consecutive enlargements of the EU in 
2004, 2007 and 2013.  
2.1.3   Products excluded from liberalization  
2.7.  In the Agreement, the EU has liberalised all of its trade with the former Yugoslav Republic of 
Macedonia  with the exception of wine, the trade arrangements of which are defined in a separate 
wine and spirit agreement.  
2.8.  In the former Yugoslav Republic of Macedonia's schedule of concessions, some tariff lines are 
excluded from tariff concessions, in particular some fruits and vegetables as well as some 
processed agricultural products.  WT/REG129/R/I  
 
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  2.1.4   Final tariff schedule applied by RTA parties  
2.9.  Final data to be found in the EC -IDB submission 2016, provided to the WTO Secretariat in 
March 2016.  
2.2  Export duties and charges, and qu antitative restrictions  
2.10.   Under the Agreement, the Parties have abolished any export duties and charges, and 
quantitative restrictions in accordance with Article 20 of the Agreement. Special provisions as 
outlined in the Standstill, General Safeguard and Sho rtage clauses have not been applied.   
2.3  Regulatory provisions on trade in goods  
2.3.1   Rules of origin  
2.11.   The Rules of Origin applied under the Agreement and set out in its Protocol 4 has been 
amended in April 20162 in order to make reference to the Regional Conventi on on pan -Euro-
Mediterranean preferential rules of origin.  
2.3.2   Standards  
2.12.   The Agreement contains specific co -operation provisions with regards to consumer 
protection as well as the gradual harmonisation of veterinary and phytosanitary legislation of the 
former Yugoslav Republic of Macedonia with that of the EU.  
2.3.3   Trade defence instruments  
2.13.   Article 36 of the Agreement reads that a Party "may take appropriate measures against this 
practice in accordance with the Agreement on implementation of Article VI of the GATT 1 994 and 
its own related internal legislation". Neither the EU nor the former Yugoslav Republic of Macedonia 
have used bilateral safeguards against each other; however, the EU had anti -dumping measures in 
force concerning imports of ferro -silicon from the f ormer Yugoslav Republic of Macedonia. 
Definitive measures were imposed on 28 February 2008 and repealed on 30 December 2009.  
3  PROVISIONS ON TRADE IN SERVICES  
3.1  Commitments  
3.1.  The provisions related to trade in services (Title V of the Agreement and Annex VI, con taining 
a list of definitions of financial services) entered into force on 1 April 2004 and cover all the four 
modes of supply,  including movement of workers, establishment, supply of services and capital.  
3.2.  The only excluded sectors are: air transport servi ces; inland waterways transport services 
and maritime cabotage services.  
3.3.  The structure of the Agreement follows neither a typical "negative" nor "positive" list 
approach. Its structure reflects one of its main objectives, that is, the approximation of the former 
Yugoslav Republic of Macedonia's legislation to that of the EU.  
3.2  Regulatory provisions  
3.4.  There is no provision per se in the Agreement on domestic regulation in line with GATS 
Article  VI. However, the approximation process also covers measures govern ed by GATS Article  VI. 
3.3  Cooperation  
3.5.  The Parties have undertook cooperation policies on a broad range of activities: including 
economic policy; statistical cooperation; banking, insurance and other financial services; 
                                                
2 Official Gazette of the former Yugoslav Republic of Macedonia,  No.71 from 11 April 2016 . WT/REG129/R/I  
 
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  investment promotion and protection; in dustrial cooperation; small and medium -sized enterprises; 
tourism; agriculture and the agro -industrial sector; customs; taxation, social and cultural 
cooperation. Specific services sectors mentioned in the Title on Cooperation include education and 
trainin g, audio -visual, electronic communications networks and services, transport, energy, 
environment, and research and technological development.  
3.6.  Title IX of the Agreement addresses Financial Cooperation under which the former Yugoslav 
Republic of Macedonia  may receive financial assistance from the EU in the forms of grants and 
loans, including loans from the European Investment Bank.  
INDICATIVE ALLOCATIONS (million EUR) per policy areas and sectors  
the former Yugoslav  Republic of 
Macedonia   2014  2015  2016  2017 2018 -
2020  Of which 
climate  
change 
relevant (%) Total  
2014 -
2020  
a. Reforms in preparation for 
Union membership   39.7  17.9  35.6  26.9  85.8    205.9   
Democracy and governance  66.1 56.8   122.9  
Rule of law and fundamental rights  54.0 29.0   83.0 
b. Socio -economic and Regional 
development  41.0  38.7  38.0  46.0  135.1     298.8   
Environment and climate action  61.3 51.6 100%  112.9  
Transport  56.4 56.5 60% 112.9  
Competitiveness and innovation  46.0 27.0   73.0 
c. Employment, social policies, 
educati on, promotion of gender 
equality, and human resources 
development  0.0  14.0  13.0  0.0  26.2    53.2  
Education, employment and social 
policies  27.0 26.2   53.2 
d. Agriculture and rural 
development   5.0  18.3  5.0  22.0  56.0    106.3   
Agriculture and rural development  50.3 56.0 10% 106.3  
TOTAL   85.7  88.9  91.6  94.9  303.1     664.2   
Please note that the figures included in the table are indicative and that actual annual allocations might be 
subject to changes of the total and/or sector amounts.  
 
4  OTHER PROVISIONS IN TH E AGREEMENT  
4.1  Sector -specific provisions on iron and steel products  
4.1.  Protocol 2 of the Agreement contains a special derogation from the competition and other 
economic provisions for steel products. During the first five years following th e entry into force of 
the Agreement, producers of the former Yugoslav Republic of Macedonia  could exceptionally 
receive State -aid for restructuring purposes under certain conditions.  
4.2.  During the implementation period, the former Yugoslav Republic of Macedo nia did not make 
use of this possibility and did not take any decision to grant State -aid to its iron and steel industry.   
4.2  Stabilisation and Association Council  
4.3.  The Parties have established the Stabilisation and Association Council and Committee that 
meet once a year. The main activities of these institutional bodies consist of supervising the 
application and implementation of the Agreement, examining any major issues arising and any 
other bilateral or international issues of mutual interest.   
4.3  Dispute settl ement  
4.4.  The Agreement does not contain a fully -fledged dispute settlement mechanism but rather 
includes a possibility for each Party to refer to the Stabilisation and Association Council any dispute 
relating to the application or interpretation of the Agree ment. The Stabilisation and Association 
Council may settle the dispute by means of a binding decision; the Parties have not made use of 
this mechanism.  WT/REG129/R/I  
 
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  ANNEX 1  
STATISTICS ON TRADE IN GOODS  
Table A1. 1 EU (28): Imports from the f ormer Yugoslav Republic of Macedonia (million €)  
Year Total  Agricultural products*  Non-agricultural products*  
2008  1,949  175.6  1,770  
2009  1,321  169.6  1,145  
2010  1,852  182.8  1,665  
2011  2,281  185.2  2,092  
2012  2,110  204.2  1,901  
2013  2,386  231.4  2,150  
2014 3,012  259.3  2,746  
* WTO definition.  
Source:  EUROSTAT (Comext).  
Table A1. 2 EU (28): Exports to the former Yugoslav Republic of Macedonia (million €)  
Year Total  Agricultural products*  Non-agricultural products*  
2008  2,643  259.6 2,358  
2009  2,170  235.2  1,911  
2010  2,532  259.9  2,259  
2011  3,038  322.7  2,705  
2012  3,372  345.5  3,017  
2013  3,397  338.5  3,046  
2014  3,819  325.2  3,483  
* WTO definition.  
Source:  EUROSTAT (Comext) . 
Table A1. 3 EU (28) import co verage after full implementation of the Agreement   
Coverage  2008  2009  2010  2011  2012  2013  2014  
% of tariff lines  98.0%  98.0%  97.9%  97.6%  98.0%  98.0%  97.9%  
% of imports  98.0%  97.1%  97.8%  98.3%  98.5%  98.6%  98.8%  
Note:  
Line coverage (% tariff lines)  is cal culated as duty -free quota -free EU(28) tariff lines on imports from the 
former Yugoslav Republic of Macedonia divided by total EU(28) tariff lines on imports from the former Yugoslav 
Republic of Macedonia.  
Trade coverage (% imports ) is calculated as duty -free quota -free EU(28) imports from the former Yugoslav 
Republic of Macedonia divided by total EU(28) imports from the former Yugoslav Republic of Macedonia, equal 
to EU's "substantially all trade" (SAT) definition.  
For calculation of the coverage rates the  preferential tariffs in force on 1 January of the indicated years has 
been used.  
Source:  EUROSTAT (Comext).  
Table A1. 4 the former Yugoslav Republic of  Macedonia: Imports from the EU ( 28) 
(million  €) 
Year Total  Agricultural prod ucts*  Non-agricultural products ** 
2008  2,343  249 2,094  
2009  1,984  227 1,757  
2010  2,285  249 2,036  
2011  2,846  312 2,534  
2012  3,057  348 2,709  WT/REG129/R/I  
 
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  Year Total  Agricultural prod ucts*  Non-agricultural products ** 
2013  3,125  328 2,797  
2014  3,490  319 3,172  
* Agricultural p roducts Chapters 01 to 24 of CN.  
** Non-agricultura l products Chapters 25 to 97 of CN.  
Source:  State Statistical Office of the former Yugoslav Republic of Macedonia.  
Table A1. 5 the former Yugoslav Republic of Macedonia: Exports to the EU 28 (million €)  
Year Total  Agricultural products*  Non-agricultural products* * 
2008  1,763  184 1,579  
2009  1,203  175 1,028  
2010  1,659  205 1,454  
2011  2,043  210 1,832  
2012  2,039  221 1,817  
2013  2,350 251 2,099  
2014  2,867  240 2,627  
* Agricultural products HS Chapters 1 to 24 .  
** Non-agricultural  products HS Chapters 25 to 97.  
Source:  State Statistical Office of the former Yugoslav Republic of Macedonia.  
 
 
 WT/REG129/R/I  
 
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  ANNEX 2  
STATISTICS ON TRADE IN SERVICE S 
Table A2. 1 - Foreign direct investments EU (28) – the former Yugoslav Republic of 
Macedonia  
Year Million Euro  Year-on-year growth %  
Stocks  Flows  Stocks  Flows  
Inward  Outward  Inward  Outward  Inward  Outward  Inward  Outward  
2010 -19.0  1,848.0  -12.0  98.0  -375%  3% 66% -60% 
2011  -129.0  1,817.0  -31.0  195.0  -579%  -2% -158%  99% 
2012  -107.0  1,735.0  10.0  -149.0  17% -5% 132%  -176%  
2013  -108.8  1,914.0  3.9 174.6  -2% 10% -61% 217%  
2014  -94.9 1,879.9  -7.4 -11.8 13% -2% -290%  -107%  
Source:  Eurostat.  
 Prepared by DG Trade - Chief Economist Unit - Statistics sector.  
Chart A2.1 – EU (28): Foreign direct investments with the former Yugoslav Republic of 
Macedonia  (million €)  
 
Source:  Eurostat .  
 Prepared by DG Trade - Chief Economist Unit - Statistics sector.  
 
Table A2. 2 EU (28) trade in services with the former Yugoslav Republic of Macedonia 
(million €)   
 2010  2011  2012  2013  2014  
Debits (Imports)  
Current account, Services  446.7  492.7  559.0  560.1  558.3  
Credits (Exports)  
Current account, Services  557.6  646.5  645.6  734.8  877.1  
Net (Balance)  
Current account, Services  110.9  153.8  86.6 174.8  318.8  
Source: Euros tat. 
 Prepared by DG Trade (EU Commission) - Chief Economist Unit – Statistics sector.  
 
WT/REG129/R/I  
 
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  Table A2. 3 The former Yugoslav Republic of Macedonia: Foreign Direct Investments with 
the EU (28) countries   
Year Million Euro  Year-on-year growth %  
Stocks  Flows  Stocks  Flows  
Inward  Outward  Inward  Outward  Inward  Outward  Inward  Outward  
2010  2,665.0  18.9 135.6   5 -8 0  
2011  2,917.9  31.0 224.4   9 64 66  
2012  3,003.1  24.0 117.1  -5.6 3 -23 -48  
2013  3,355.2  25.5 226.7  0.4 12 6 94 -107 
2014  3,282.8  27.1 13.8 3.0 -2 6 -94 672 
20151   -163.3  5.9     
1  Data on FDI flows, for 2015, by countries are produced only for the categories Equity capital and the 
Loans component of other capital.  
 [Data for reinvested earnings and the remainin g components of FDI flows, based upon the Annual 
FDI Survey, are available within t+270 days.]  
 Data on FDI stocks for 2015 will be released in September 2016.  
Source:  National Bank of the former Yugoslav Republic of Macedonia.  
Table A2. 4 The former Yugoslav Republic of M acedonia: Balance of Payments - Service 
account (with all countries in the world - in million €)  
  2010  2011  2012  2013  2014  2015  
  
Current account, Services Debits 
(Import)  615.50  685.69  757.42  779.75  919.45  1,026.54  
  
Current account, Services Cr edit 
(Export)  747.48  1,044.87  1,066.83  1,154.70  1,277.49  1,368.96  
  
Current account, Services net  131.98  359.18  309.41  374.94  358.03  342.41  
Source:  National Bank of the former Yugoslav Republic of Macedonia.  
 
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