RESTRICTED  
  
WT/TPR/S/290  
23 October 2013  
(13-5778)  Page: 1/95  
Trade Policy Review Body   
 
 TRADE POLICY REVIEW 
REPORT BY THE SECRETARIAT 
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA  
This report, prepared for the first Trade Policy Review of the former Yugoslav Republic of 
Macedonia, has been drawn up by the WTO Secret ariat on its own responsibility. The Secretariat 
has, as required by the Agreement establishing  the Trade Policy Review Mechanism (Annex 3 of 
the Marrakesh Agreement Establishing the World Trad e Organization), sought clarification from the 
former Yugoslav Republic of Macedonia on its trade policies and practices. 
 Any technical questions arising from this report may be addressed to Mr. Mario Kakabadse (tel.: 022 739 5172). 
 
Document WT/TPR/G/290 contains the policy st atement submitted by the former Yugoslav 
Republic of Macedonia. 
 
 
Note:  This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review  Body on the former Yugoslav Republic of 
Macedonia. This report was drafted in English. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  CONTENTS 
SUMMARY ....................................................................................................................... . 6 
Economic developments ..................................................................................................... 6  
Trade policy fr amework ..................................................................................................... 6  
Trade policy instruments and practices ................................................................................. 7  
Sectoral policies ............................................................................................................. .. 8 
Outlook ....................................................................................................................... .... 9 
1   ECONOMIC ENVIRONMENT ........................................................................................ 10  
1.1   Introduction ............................................................................................................. 10 
1.2   Recent Econ omic Developments.................................................................................. 10 
1.3   Trade and invest ment-related  reform .......................................................................... 13 
1.4   Internat ional Trade ................................................................................................... 14 
1.4.1   Goods ................................................................................................................. . 14 
1.4.2   Services .............................................................................................................. . 16 
1.5   Foreign Dire ct Invest ment ......................................................................................... 18 
1.6   Outlook ................................................................................................................... 20 
2   TRADE POLICY REGIME: FR AMEWORK AND OB JECTIVES .......................................... 21  
2.1   Introduction ............................................................................................................. 21 
2.2   General legal and institutional framework ..................................................................... 21 
2.3   Main trade-re lated legislation ..................................................................................... 22 
2.4   Participation in the WTO ............................................................................................ 22 
2.5   Preferential Trade Ag reements and A rrangements ......................................................... 26 
2.5.1   Stabilization and As sociation Agr eement ( SAA) .......................................................... 26 
2.5.2   Central European Fr ee Trade Area (CEFTA) 2006 ........................................................ 27 
2.5.3   Free-Trade Agreement with the Eu ropean Free Trade A ssociation (EFTA) ....................... 27 
2.5.4   Bilateral Free-Trade Agreements .............................................................................. 27 
2.5.5   Other arrangements ............................................................................................... 28 
2.6   Investme nt regime ................................................................................................... 28 
3   TRADE POLICIES AND PRACTICES BY MEASURE ........................................................ 30  
3.1   Introduction ............................................................................................................. 30 
3.2   Measures direct ly affectin g imports ............................................................................. 30 
3.2.1   Customs procedures ............................................................................................... 30 
3.2.2   Customs valuation and Pr e-shipment insp ection (PSI) ................................................. 31 
3.2.3   Rules of origin .......................................................................................................  32 
3.2.4   Tariffs ............................................................................................................... ... 32 
3.2.5   Other du ties and taxes ........................................................................................... 38 
3.2.6   Import prohibitions, restrictions an d licensing ............................................................ 39 
3.2.7   Contingenc y trade me asures ................................................................................... 41 
3.2.8   Governme nt procurement ....................................................................................... 41 
3.2.9   State-trad ing enterprises ........................................................................................ 42 WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  3.2.10   Transit .............................................................................................................. . 42 
3.3   Measures direct ly affectin g exports ............................................................................. 43 
3.3.1   Procedures and export taxes ................................................................................... 43 
3.3.2   Export restrictions ................................................................................................. 43 
3.3.3   Export subsidies and inward pr ocessing .................................................................... 44 
3.3.4   Export finance and export promotion ........................................................................ 44 
3.3.5   Technological industri al development zones (T IDZs) ................................................... 46 
3.4   Internal policies and measures affecting production and trade ......................................... 48 
3.4.1   Regi stration ..........................................................................................................  48 
3.4.2   Standards, testing and certification, and labelling ....................................................... 48 
3.4.3   Sanitary and phyt osanitary (SPS ) measures .............................................................. 50 
3.4.4   Industrial poli cy including subsidies .......................................................................... 52 
3.4.5   Competition policy, st ate aid and pric e controls .......................................................... 53 
3.4.6   Privatization .......................................................................................................... 54 
3.4.7   Protection of inte llectual proper ty rights .................................................................... 54 
4   TRADE POLICIES BY SECTOR ..................................................................................... 58  
4.1   Overview ................................................................................................................. 58 
4.2   Agriculture ............................................................................................................. . 59 
4.2.1   Policy developments ............................................................................................... 60 
4.2.2   Trade policy aspects ............................................................................................... 62 
4.3   Mining and energy .................................................................................................... 64 
4.4   Manuf acturi ng .......................................................................................................... 66 
4.5   Policies affectin g trade in services ............................................................................... 69 
4.5.1   Trade agreements .................................................................................................. 69 
4.5.2   Financial services ................................................................................................... 70 
4.5.3   Telecommunications ............................................................................................... 73 
4.5.4   Transpor t and logi stics ........................................................................................... 74 
4.5.5   Tourism ................................................................................................................ 79 
REFERENCES .................................................................................................................. 8 0 
5   APPENDIX  TABLES .................................................................................................... 82  
 
CHARTS 
 Chart 1.1 Composition of merc handise trade, 2006 and 2012 ................................................. 15
 
Chart 1.2 Direction of merchandise trade, 2006 and 2012 ...................................................... 16 
Chart 1.3 Trade in services, 2006 and 2012 ......................................................................... 17 
Chart 1.4 FDI inflows and stock by sector and origin, 2011 .................................................... 19 
Chart 3.1 Average applied MFN tariff ra tes, by HS sect ion, 2004 an d 2013 ............................... 34 
Chart 3.2 Breakdown of applied MFN tariffs, 2013 ................................................................. 35 
 WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  TABLES 
 Table 1.1 Selected macroeco nomic indicators 2006-12 .......................................................... 11
 
Table 1.2 Foreign direct investment flows by activity ............................................................. 18 
Table 2.1 Main trade-related laws, 2013 .............................................................................. 23 
Table 2.2 Trade under Preferential Agreements, 2012 ........................................................... 26 
Table 3.1 Structure of MFN ta riffs 2013 ............................................................................... 33 
Table 3.2 Applied MFN tariff summary, 2013 ........................................................................ 34 
Table 3.3 Binding of tariff lines,  2003-12  ............................................................................. 36 
Table 3.4 MFN bound tariffs ............................................................................................... 36 
Table 3.5 Applied MFN and preferential simple average tariffs, 2013 ........................................ 37 
Table 3.6 Excise  duties , 2013  ............................................................................................ 38 
Table 3.7 Main products subj ect to import  licensing .............................................................. 40 
Table 3.8 Required permits and approvals for export ............................................................. 43 
Table 3.9 Main  TIDZs,  2013 .............................................................................................. 47 
Table 3.10 Main IPR enforcement in stitutions and agencies, 2013 ........................................... 57 
Table 4.1 Sector overview by share of GDP 2006 -12 ............................................................. 58 
Table 4.2 Sector overview by  employment share, 2006-10 .................................................... 59 
Table 4.3 Non- ad valorem  tariffs under applied MFN re gimes by HS 2-digit level ....................... 63 
Table 4.4 Doing busi ness perfor mance ................................................................................ 67 
Table 4.5 Pipeline Greenfield FDI projects by leading industries, 2012-15 ................................. 68 
Table 4.6 Structure of the financial system .......................................................................... 70 
Table 4.7 Number of subscribers in th e electronic communi cations ma rket ............................... 74 
Table 4.8 Passenger and freight transport by mode ............................................................... 75 
Table 4.9 Transport action plan .......................................................................................... 76 
Table 4.10 Tourism indica tors, select ed years ...................................................................... 79 
 
BOXES 
 Box 3.1 USAID Investment Development and Export Advancement Support (IDEAS) Project ....................................................................................................................... .... 46
 
Box 3.2 Labelling of food ................................................................................................... 50 
Box 4.1 Direct support policy ............................................................................................. 64 
 
APPENDIX TABLES 
 Table A1.1 Merchandise exports by group of products, 2006-12 .............................................. 82
 
Table A1.2 Merchandise imports by group of pr oducts, 2006-12  ............................................. 84 
Table A1.3 Merchandise export s by destinat ion, 2006- 12 ....................................................... 86 
Table A1.4 Merchandise im ports by orig in, 2006- 12 .............................................................. 87 
Table A1.5 Foreign di rect inve stment .................................................................................. 88 
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  Table A3.1 Non- ad valorem  tariffs under applied MFN re gimes by HS 2-digit level ..................... 89 
Table A3.2 Tariff quot as under FT As, 2012  .......................................................................... 90 
 
Table A4.1 Applied MFN tariff averag es by HS2-digit le vel, 2004 an d 2013 ............................... 91 
 
 WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  SUMMARY 
1. The former Yugoslav Republic of Macedonia,  a small, landlocked country of two million 
people with a GDP of around US$10 billion, is open to trade, with exports and imports in goods and services accounting for 127% of GDP in 2012.  Despite the inherent disadvantages of small 
size and limited resources, the Government has established and maintained  a policy framework 
that has had considerable success in several areas: promoting growth; stabilizing the macroeconomic and financial environment in the face of external shocks; enabling reforms to 
speed up EU accession and facilitate export of Macedonian products to EU markets; facilitating 
access to other important markets through accession to the WTO and signing free-trade agreements; as well as improving the business environment to attract foreign direct investment. 
2. The country is on the threshold of EU accessi on, having achieved candidate status in 2005 
although formal accession negotiations have not commenced, pending, inter alia, resolution of the 
name issue. The focus of economic and trad e-related reform has been on adopting the acquis 
communautaire, the regulations and common policies that define the EU as a single market, with 
considerable achievements in movement of goods, freedom to provide services, public 
procurement, financial services, customs reform , food safety, transport, and agriculture. 
Economic developments 
3. Economic output expanded vigorously between 2006 and 2008, when it averaged 5.3% per 
annum. Due to the international economic crisis, growth slowed in 2009 but less than in regional neighbours. The subsequent recovery was relatively  r a p i d ,  w i t h  g r o w t h  r e a c h i n g  n e a r l y  3 %  i n  
2010 and 2011. Due to the euro-zone crisis an d weaker demand for exports, the economy 
contracted by an estimated 0.2% in 2012. Monetary policy has been anchored for over 15 years by 
the currency peg to the euro and previously to the DM. As a result, inflation was low and stable, government debt fell to under 21% of GDP while, at around 49% of GDP, external debt remained 
moderate. The country has made progress towards becoming a market economy and needs to 
continue reforms to further lower the cost of doing business, including infrastructure investments and regulatory reforms, as well as those to improv e the functioning of the labour market and raise 
worker skill levels, given high and persistent unemployment. 
4. Regarding improvement of the business clim ate, the country has been investing in 
technological industrial development zones (TIDZs),  characterized by good access to infrastructure 
and tax incentives. These are encouraging business to invest in the country, making foreign direct 
investment (FDI) the cornerstone of future export -oriented growth. The authorities are aware that 
supportive macroeconomic policies and continued structural reforms to improve competitiveness are crucial to increasing investment and productivity. 
5. Given that both domestic and foreign investment are crucial to future competitiveness, the 
authorities are committed to making the investment climate more stable and predictable in order to stimulate greater investment levels. Recently, the country has been successful in attracting 
significant greenfield FDI, in particular in the automotive components sector. The shift towards 
greenfield FDI reflects the country's investment-related strengths, including: low labour costs and taxes; geographical proximity to assembly plants  in central and western Europe and Turkey; duty-
free access to the large European market; and a number of investment incentives, including tax 
holidays. 
Trade policy framework 6. The Ministry of Economy is the main government institution responsible for formulating and 
implementing policies relating to foreign trade. It is responsible for concluding and signing trade 
treaties and other trade-related agreements with third countries. Foreign trade policy is formulated in close contact with the Ministry of Finance, which is also responsible for cooperation with 
international financial institutions and policies concerning banking and credit, foreign exchange, 
and customs. 
7. The WTO Agreements and the country's current and future trade relations with the EU are 
the main factors influencing the trading system. Since its accession to the WTO in 2003, the 
former Yugoslav Republic of Macedonia has reformed its policies in trade and related areas with WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  the aim of bringing domestic legislation into line with WTO requirements and with the EU acquis 
communautaire . This has entailed a broad review and the updating of almost all trade-related 
legislation, a process that is continuing. 
8. Macedonian trade is strongly oriented to wards its FTA partners. Currently, 90% of 
Macedonia's exports and nearly 80% of its imports are carried out under FTAs, with the EU 
accounting for 63% of exports and 58% of imports. Around 80% of trading is free of custom duties 
and 7% takes place with preferential custom duti es. The FTAs allow the former Yugoslav Republic 
of Macedonia to be included in the system of diag onal accumulation of origin of goods concerning 
the EU, EFTA, the countries of central and ea stern Europe, and Turkey and CEFTA (Central 
European Free Trade Area). 
9. The Government attaches considerable importance to the Doha Development Agenda 
negotiations. As a landlocked country, the former Yugoslav Republic of Macedonia closely monitors 
progress in the trade facilitation negotiations. On agriculture, it agrees with the position of recently acceded Members that such Members should not be required to undertake reduction commitments 
in all pillars. On non-agricultural market access, the country supports the position that it should be 
excluded from further tariff reductions, considering the numerous market-access commitments undertaken during accession. Similarly, in the services area, the Government is of the view that 
account should be taken of the extensive market access commitments made. 
Trade policy instruments and practices 10. In addition to making extensive trade-related commitments in the WTO, trade and 
investment policies have been oriented towards the goal of accession to the EU. The country has 
made progress with adopting the acquis, in line with its candidate status, and has initiated new 
and amended legislation in several domains, including company registration, customs, government procurement, standards and SPS measures, competition policy, and intellectual property. The 
overall trade-related regulatory framework has improved significantly in recent years, and the 
Government is focusing on consolidating and e ffectively implementing the recently adopted and 
amended laws and regulations. 
11. Imported goods are generally subject to custom s duties, excise duties, and value-added tax. 
As a share of total tax revenue, customs duties declined steadily from 9.4% in 2006 to 5.7% in 2012, reflecting the trend in trade liberalizatio n and tariff reduction. Although revenue from 
customs duties has been in decline, trade-related taxes (customs duties + VAT on imports + 
excise duty on imports) overall accounted for 58% of the country's total tax revenue in 2006 and 
68.9% in 2012, due to the growing importance of VAT and excise duties on imports. 
12. The simple average applied MFN tariff declined from 11.1% in 2004 to 8.5% in 2013. While 
average tariffs are low, dispersion of rates is relatively high, ranging from zero to 70%. Prepared 
foods, footwear and headgear, arms and ammuniti on, and vegetable products, have average tariff 
rates above or well above the average. All non-pref erential partners are subject to MFN treatment. 
The former Yugoslav Republic of Macedonia bound 79.4% of its tariff lines in 2003, increasing to 
100% by 2012, and with acceptance of sectoral tariff harmonization agreements, thousands of 
tariff lines were eventually bound at zero. Agricultural products are bound at 17.5% and industrial products at 6.2%. 
13. Upon accession to the WTO the former Yugo slav Republic of Macedonia undertook to 
eliminate and not reintroduce or apply quantitative restrictions on imports, or other non-tariff measures such as licensing, quotas, bans, permits, prior authorization requirements, licensing 
requirements, and other restrictions having equiva lent effect, that cannot be justified under WTO 
rules. The authorities maintain that the current import licensing regime is in full compliance with WTO rules. 
14. The Government committed itself to ensuring enforcement of its WTO obligations in its 
(then) free economic zones, which meant eliminating any requirements for use of local goods or for export performance. In addition, goods produced in these zones with imports and imported inputs free of tariffs and certain taxes, would be subject to normal customs formalities when 
entering the rest of the country's territory, incl uding payment of tariffs and taxes. These basic 
principles continue to apply to the TIDZs, established to provide favourable conditions for the WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  development of business activities by offering prepar ed industrial sites with investor-ready physical 
and legal infrastructure, support services, and tax, customs, and other incentives. The zones are established to develop modern technologies and efficient resource utilization by applying high environmental standards. 
15. The Government has mostly harmonized its technical standards legislation with the relevant 
EU Directives and the country has achieved a high level of transposition of the European technical legislation into domestic legislation, related, inter alia, to the horizontal legal framework 
concerning standardization, accreditation, me trology, conformity assessment, and market 
surveillance. 
16. In the WTO, the former Yugoslav Republic of Macedonia committed itself to amending 
existing legislation to comply with the SPS Agreem ent in the area of veterinary and phytosanitary 
measures, with regard to: new regulations on animal protection based on World Organization for 
Animal Health (OIE) recommendations and standards; new regulations on plant protection in conformity with International Plant Protection Convention (IPPC) standards; examination and 
harmonization of national legislation with Codex Alimentarius (CA) standards; reorganization of a 
national reference laboratory in compliance with ISO/IEC standards; and preparation of a national food safety programme. This has increasingly allowed the country to accept the principle of 
equivalence, to perform control, inspection, and approval procedures consistent with WTO rules, 
and to take account of risk-assessment techniques developed by the relevant international organizations. 
17. In the area of food safety and veterinary po licy, the country has achieved a high level of 
harmonization of its legislation with international SPS standards. In terms of phytosanitary policy, 
new regulations on plant protection in conformity with IPPC standards have been adopted and several others are slated for adoption in 2013/14. The authorities recognize that training is need 
for relevant bodies on implementing SPS measures. In addition to assuring consistency with WTO 
rules, the Government has focused in recent years on improving the capacity of the competent authorities to implement the EU acquis regarding: field inspection services, food and feed safety, 
animal disease control, plant health and plant protection products, control of veterinary medicinal 
products, and enhancement of border-post import control. 
18. Privatization of state-owned enterprises (SOEs) was relatively rapid and largely completed 
during the 1990s, mostly through sales to the ma nagement and employees of the companies. Out 
of around 2,000 SOEs, fewer than 70 are still not privatized; according to the authorities, state 
capital in these enterprises as a share of GDP is approximately 15%. State capital remains concentrated in the energy sector (power ge neration and transmission companies are state-
owned), public utilities, and public enterprises asso ciated with the railways. The State also owns a 
significant minority stake in the profitable telecommunications company, Makedonski Telekom. Competition law is well developed and the focus is on strengthening the competition authority to 
implement it. 
19. The former Yugoslav Republic of Macedonia has a relatively comprehensive and recently 
updated legal framework for intellectual property  (IP) protection, which includes the Law on 
Industrial Property (covering patents, trademarks , industrial designs, appellations of origin, and 
geographical indications) and the Law on Copyri ght and Related Rights, which are in accordance 
with relevant EU Directives and pertinent international conventions. However, progress in IP rights protection has been uneven and intermittent and fu rther work is required to enforce IPRs in a 
transparent and consistent manner. Although a solid track record on investigation, prosecution, 
and trials of IPR-related cases has yet to be established, a promising basis was created in 2012, when a methodology was adopted for the collection and processing of statistical data for 
enforcement purposes. 
Sectoral policies 20. The economy is characterized by a large services sector, a medium-sized industrial sector, 
and a small agriculture sector. Services contribute over half of GDP and en gage over half of the 
employed labour force, while nearly a quarter of GD P is generated by the industrial sector, which is 
dominated by iron and steel, garments, construction, and mining. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  21. Regarding agriculture, upon WTO accession the country committed to the termination of 
quotas (other than tariff quotas in existing free-trade agreements), abolition of variable levies and export subsidies, phased reduction of import tariffs, and reform of the State Office for Commodity Reserves. The border protection regime is more restrictive for agriculture than for industrial 
products, similar to the pattern in many other countries. MFN tariffs on imports from some 
preferential and non-preferential partners remain relatively high. Periodically, the Government has introduced export restrictions, including temporary export bans on wheat flour to prevent serious 
shortages in the domestic market, resulting from insufficient production of wheat in the country. 
Instruments used for domestic support are being harmonized with those of the EU with most of the funding going to income support measures. 
22. Manufacturing accounts for the large majority of exports and over one-sixth of total 
employment if food production and processing is included. Its strengths are in the areas of ferrous 
and non-ferrous metallurgy, the machinery, automotive and electrical equipment industry, the chemical industry, the textile industry, processed food and beverages, and the construction 
industry. The strategy of attracting FDI is starting to show positive results as new investments in 
manufacturing located in the TIDZs are transformi ng the country's export basket. Chemicals have 
become a significant export sector (after metals  and apparel), accounting for an estimated 10% of 
total exports in 2010. This is a direct consequenc e of new investment for production of emission 
control catalysts, which is contributing to diversification towards more competitive products.  
23. Despite its small share in world services trade,  the former Yugoslav Republic of Macedonia 
made commitments in 115 of 155 services sectors (the same overall number as the EU) when it 
acceded to the WTO. It scheduled extensive commitments, including on financial services, 
telecommunications, transport, tourism, and professional services. 
24. In relation to the overall economy, the size of the financial sector is considered to be broadly 
consistent with Balkan region norms in terms of deposits (53% of GDP in 2012), stock market 
capitalization (24% of GDP), and insurance (insur ance premiums were 1.5% of GDP in 2012). The 
critical ratio of bank credit to GDP (47% in 2012) is lower than the regional average and lags far 
behind the more developed eurozone region, which is used as a global benchmark. In 2012, the 
intermediation rate (measured as total assets/GDP) rose to 86%, which is considered relatively low by regional standards. Access to financial se rvices is difficult and apart from banks, the 
financial sector remains relatively unsophisticated, and plays a limited role as an engine of 
economic growth. The leasing market is underdeve loped and the share of savings houses in the 
total assets of the banking system remains low at around 1%, while other institutions providing financial services have a total market share of around 10%. 
25. The country is aiming to establish efficient transport services and logistics, which are critical 
for a land-locked country. However, significant challenges such as poor road safety, low competitiveness of railway operations and infrastructural shortcomings mean that limited progress 
has been achieved in transport policy. The smal l Macedonian air transport sector has gradually 
resumed growth and the Government has overhauled the institutional framework and concessioned the two airports to a private operator. More frequent and cheaper flights would help promote inbound tourism, which currently generates around 6% of the country's services exports. 
Outlook 
26. The short-term outlook for the former Yugoslav Republic of Macedonia is uncertain given the 
current global turmoil and doubts about recovery in the eurozone. Growth is expected to pick up to 
around 2% for 2013, and possibly to subsequent rates of over 3%, provided that global conditions 
improve significantly and the authorities continue to pursue structural reforms and supportive macroeconomic policies, and realize planned FDI to further diversify the export basket. Reforms to 
improve competitiveness will be key to further bo osting investment and increasing productivity. 
Continuing reforms that aim to lower costs for business, including infrastructure and regulatory reforms, as well as those that improve the functioning of the labour market, are also central to future growth.  However, the downside risks may be  significant, with any further deterioration in 
the external environment likely to spill-over into the former Yugoslav Republic of Macedonia mainly 
through trade and investment channels, possibly leading to stagnant or even declining economic output. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  1  ECONOMIC ENVIRONMENT 
1.1  Introduction 1.1.   The former Yugoslav Republic of Macedonia is a small, landlocked, trade-dependent country 
in the Balkan peninsular. It is surrounded by Greece, Bulgaria, Albania and Serbia, including the 
territory of Kosovo.
1 As a small country of two million people with a GDP of around US$10 billion, 
the internal market is not big enough to sustain high growth rates in the medium and long term. Relatively open to trade, with exports and imports in goods and services accounting for 127% of 
GDP in 2012, the country's external trade prospects are closely tied to the European economy, 
where key trade partners such as Greece are und ergoing prolonged recessions. Being a landlocked 
country, the former Yugoslav Republic of Macedo nia's goods exports depend on the quality of 
neighbouring infrastructure, not only its own, making  it difficult to take advantage of the country's 
location at the crossroads of two major European transit corridors. 
1.2.  The country gained independence from the Socialist Federal Republic of Yugoslavia in 1991 
and since then has undergone a significant transformation into a market economy. A key feature 
of this transformation has been a process of privatization which is now largely complete with the 
share of the private sector in the production of  GDP doubling to an estimated 83% over the past 
20 years. However, the legacy of the transition ye ars continues to limit productivity as access to 
essential inputs such as land is constrained by the ownership structure.  
1.3.  Despite the inherent disadvantages of sm all size and limited resources, the Macedonian 
Government established and maintains a policy fr amework that has: promoted growth; stabilized 
the macroeconomic and financial environment in the face of external shocks; enabled reforms to 
speed up EU accession and facilitate export of Macedonian products to EU markets; facilitated 
access to other important markets through accession to the WTO and signing free-trade agreements; and improved the business environment, inter alia, to attract foreign direct 
investment. 
1.4.  The country is on the threshold of EU acce ssion, having achieved candidate status in 2005. 
The focus of economic, including trade-related, reform has been on adopting the acquis 
communautaire, the regulations and common policies that define the EU as a single market. 
Financial assistance for pre-accession reform increased through the instrument for pre-accession assistance, focusing on institution building, cross-border cooperation, and regional and rural development.  The European Commission recommended the opening  of formal accession 
negotiations in 2009 but these had still not comm enced by mid-2013, pending resolution of the 
name issue with Greece. 
1.2  Recent Economic Developments 
1.5.  Economic performance improved considerably prior to the global crisis. Considered a laggard 
in terms of economic growth for much of its transition period, the former Yugoslav Republic of Macedonia's output expanded vigorously between  2006 and 2008, when it averaged 5.3% per 
annum and approached the regional average (T able 1.1). Macroeconomic policies supported 
stability and growth and monetary policy also responded adequately to price and foreign exchange developments. Monetary policy has been anchored  for over 15 years by the currency peg to the 
euro and previously to the DM. As a result, inflation was low and stable (despite picking up in 2008 
due to the surge in world prices for food and energy), government debt fell to under 21% of GDP 
while, at around 49% of GDP, external debt remained moderate.  
1.6.  Structural reforms have also been implemen ted. Fees and charges were reduced, procedures 
eliminated, and labour relations overhauled, while reforms in the judiciary and cadastre improved 
creditor and property rights. Tax policy and administration reforms reduced the fiscal burden and sound banking regulation and supervision have helped to keep risks manageable while stronger 
competition has reduced the cost of finance. 
 
                                               
1 UN Security Council Resolution 1244 of 1999 authorized  an international civil and military presence in 
Kosovo and remains in force. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Table 1.1 Selected macroe conomic indicators 2006-12 
 2006  2007  2008  2009  2010 2011 2012  
Miscellaneousa        
Current GDP (MDen million) 320,059  364,989  411,728  410,735  434,112 459,789 462,587  
Current GDP (US$ million) 6,561  8,162  9,835  9,319  9,344 10,396 9,616  
Current GDP (€ million) 5,231  5,965  6,720  6,703  7,057 7,473 7,486  
GDP growth rate (constant 2005 
prices, %) 5.0 6.1 5.0 -0.9 2.9 2.8 -0.2  
GDP per capita at current market 
price (US$) 3,216  6,994  4,805  4,544  4,547 5,050 4,664  
Unemployment rate (%) 36.0  34.9 33.8 32.2 32.0 31.4 31.0  
Fiscal policy (% of GDP)b (% of current GDP, unless otherwise indicated) 
Total revenue 32.5  32.8 33.1 31.3 30.4 29.8 30.0  
  Tax revenue 29.9 29.4 29.0 28.8 28.1 26.8 26.6 
    of which:  VA T 8.5  9.0 8.8 8.6 8.7 9.1 8.3  
       Excise 3.6 3.4 3.3 3.4 3.3 2.9 3.4 
       Custom duties 1.7  1.7 1.5 1.3 1.1 0.8 0.9  
Total expenditure 33.0 32.2 34.1 33.9 32.9 32.3 33.8 
Overall fiscal balance -0.5  0.6 -0.9 -2.7 -2.4 -2.5 -3.8  
Central government gross debt  (as % 
of GDP) 32.0 24.0 20.6 23.9 24.2 27.8 33.8 
Savings and investment        
Gross national savings 21.9 18.5 14.8 20.3 24.3 24.8 .. 
Gross domestic investment 21.5  24.6 26.8 25.9 24.9 26.2 ..  
Savings-investment gap +0.4 -6.1 -12.0  -5.6 -0.6 -1.4 .. 
Current GDP (MDen million) 320,059  364,989  411,728  410,735  434,112 461,730 462,783  
Current GDP (US$ million) 6,558  8,160  9,834  9,314  9,339 10,439 9,663  
Current GDP (€ million) 5,227  5,965  6,717  6,706  7,051 7,506 7,518  
GDP growth rate (constant 2005 
prices, %) 5.0 6.1 5.0 -0.9 2.9 2.8 -0.3 
GDP per capita at current market 
price (US$) 3,210  3,984  4,791  4,528  4,532 5,058 ..  
Unemployment rate (%) 36.0 34.9 33.8 32.2 32.0 31.4 31.0 
Fiscal policy (% of GDP)b (% of current GDP, unless otherwise indicated) 
Total revenue 32.0 32.2 32.5 30.5 30.2 29.6 30.0 
  Tax revenue 27.9  27.8 27.4 26.0 25.7 25.6 25.5  
    of which:  VA T 8.5 9.0 8.8 8.6 8.9 9.4 9.4 
       Excise 3.8  3.6 3.5 3.5 3.5 3.5 3.4  
       Custom duties 1.7 1.7 1.5 1.3 1.1 0.8 0.8 
Total expenditure 32.5  31.6 33.4 33.2 32.7 32.1 32.6  
Overall fiscal balance -0.5 0.6 -0.9 -2.7 -2.5 -2.6 -2.6 
Central government gross debt (as % 
of GDP) 32.0 24.0 20.6 23.8 24.8 28.6 32.3  
Savings and investment        
Gross national savings ..  17.6 14.0 19.1 21.5 22.7 ..  
Gross domestic investment .. 24.6 26.8 25.9 23.7 25.4 .. 
Savings-investment gap ..  -7.0 -12.8  -6.8 -2.2 -2.7 ..  
Prices, interest rates, and 
exchange rate        
Inflation (CPI, %age change)  3.2 2.3 8.3 -0.8 1.6 3.9 3.3  
Interest rates, discount rate 6.5 6.5 6.5 6.5 5.0 4.0 3.8 
Interest rates, deposit rate 4.7  4.9 5.9 7.0 7.1 5.9 5.1  
MDen/US$ (annual average) 48.8 44.7 41.9 44.1 46.5 44.2 47.9 
Real effective exchange rate 
(2005=100)c 100.1  100.8  101.9  103.9  102.2 103.7 102.5  
Nominal exchange rate (2005=100)c 99.8 99.9 103.0  102.9  100.4 102.1 98.1 WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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   2006  2007  2008  2009  2010 2011 2012  
External sector (% of current GDP, unless otherwise indicated) 
Current account balance -0.4 -7.4 -12.6  -6.5 -2.1 -3.0 -4.0 
Net merchandise trade -19.2  -20.1  -26.3  -23.3  -20.5 -22.3 -23.8  
   Merchandise exports 36.8 41.6 40.5 29.0 35.8 42.4 41.1 
   Merchandise imports -56.0  -61.6  -66.8  -52.3  -56.4 -64.8 -64.9  
Services balance 0.3 0.5 0.1 0.2 0.5 1.3 0.3 
   Services exports 9.2  10.0 10.3 9.2 9.7 10.7 11.0  
   Services imports -8.8 -9.5 -10.2  -9.0 -9.1 -9.4 -10.7  
Gross foreign reserves (stock, end of 
period in € million) 1,417  1,524  1,495  1,598  1,715 2,069 2,193  
Import coverage (gross foreign 
reserves in €/import f.o.b plus 
payments for services from current 
year), in months 5.0 4.3 3.5 4.7 4.5 4.5 4.6 
Gross external debt (stock, end of 
period, in € million) 2,503.4
0 2,841.10  3,304.20  3,780.40  4,105.70 4,846.60 5,163.20  
Gross external debt (% of GDP) 47.9 47.6 49.2 56.4 58.2 64.6 68.6 
Personal remittances, received (% of 
GDP) 4.1 4.2 4.1 4.1 4.2 4.2 ..  
FDI inflows (% of GDP) 6.6 8.5 6.0 2.2 2.3 4.5 1.4 
 
.. Not available.  a Preliminary data for 2011 and estimated data for 2012. b Projection for 2012 data. c Using the consumer price index. An increase in the index reflects appreciation.  Source: Republic of Macedonia Stat e Statistical Office. Viewed at 
http://www.stat.gov.mk/Default  _en.aspx 
(access to database 29 May 2013); National Bank of  the Republic of Macedo nia; IMF International 
Financial Statistics (IFS). Viewed at: http://e library-data.imf.org/ [29 May 2013]; and IMF (2011), 
Country Report No. 12/133. 
1.7.  As a consequence of the international economic crisis, growth began to slow sharply in early 
2009, owing to declining export revenues and lower foreign direct investment (FDI) inflows. Nevertheless, the Macedonian economy was less affected by the global economic and financial crisis than many of its regional peers. In 2009, output contracted by only 0.9% compared with an 
average regional GDP decline of more than 5% for south-eastern European countries, and the 
subsequent recovery in the former Yugoslav Republic of Macedonia was also more robust and rapid than in most neighbouring countries. The economy grew by nearly 3% in 2010 and 2011 due to an 
expansion in exports, a recovery in househol d consumption, and a significant increase in 
investment in 2011. FDI performed particularly well in 2011 through airport concessions, financial and insurance activities, the automotive industry, mining, agri-processing, and real estate, 
reaching 4.5% of GDP. 
1.8.  Due to the eurozone crisis, the Macedonian economy contracted by an estimated 0.2% in 
2012. Growth was affected by weaker demand for exports in particular from the eurozone, the country's main export market, lower FDI, and su bdued domestic demand. The banking sector has 
remained stable. Banks have relied mainly on domestic deposits to fund lending, so they were not 
as exposed as those in the region to the pressure s caused by to the global financial and eurozone 
crisis. Overall, external imbalances have remained relatively low in recent years and largely funded 
through FDI and steady inflows of emigrant remittances. The current account deficit is estimated 
to have declined from 12.8% of GDP in 2008 to  3.9% of GDP in 2012. International reserves 
continue to provide a comfortable coverage of 4 to 5 months of imports of goods and services.  
1.9.  In terms of tax revenue, trade-related taxe s (customs duties + excise tax on imports + VAT 
on imports) continue to account for more than ha lf of total tax revenue, rising from 58% in 2006 
to 68.9% in 2012 according to Ministry of Finance data. VAT on imports accounts for most of the revenue, while revenue generated by customs duti es has declined in absolute terms and as a 
share of total tax revenue (from 9.4% to 5.7% over the same time period), reflecting the 
significant tariff liberalization that took place during the review period.  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  1.3  Trade and investment-related reform 
1.10.  The Government's reform policy framework has been characterized in recent years by its 
emphasis on promoting growth, ensuring macroeconomic stability, regional economic integration, and investment promotion. Successful actions have included: stabilizing the macroeconomic and 
financial environment in the face of serious external shocks; advancing reforms to accelerate EU 
accession and facilitate entry of Macedonian products into European markets; entering the WTO and signing free-trade agreements to enable access to other markets; instituting a more attractive 
business environment, and establishing technological development zones to increase investment 
and upgrade and diversify the country's exports. 
1.11.  During the review period, EU accession wa s the basis of reform in nearly every area of 
public policy, including trade and investment. The Macedonian authorities are harmonizing national 
legislation with the EU acquis communautaire with specific achievements in many areas, including: 
the movement of goods, freedom to provide services, public procurement, financial services, customs administration, food safety, transport policy, and agriculture. The European Commission's 
2012 progress report
2 notes that the country continues to fulfil the criteria of a candidate State 
and has made progress towards becoming a market economy. However it underlines the need to continue reforms to reduce structural weaknesse s in particular regarding high unemployment. 
1.12.  The country is suffering from low activity and high unemployment rate estimated at 31.4% 
in 2011 and 31.0% in 2012, which is among the high est in Europe. The figure may be overstated 
due to unregistered employment in the extensive informal sector, which is estimated to be the equivalent of 12%-15% of GDP. Long-term unemp loyment is widespread among youth, the rural 
population, ethnic minorities, and less educated people. One of the key challenges for the country 
is to create employment and to integrate the yout h, women, and people employed in the informal 
sector into the official job market. Given the stagnant labour market, improvements in poverty are 
unlikely to have been significant in recent years.  Poverty was persistent even during the years of 
accelerating growth prior to the crisis, with 30%  of the population living in poverty in 2011, 
according to data of the State Statistical Office. 
1.13.  Despite the difficult economic environment,  the former Yugoslav Republic of Macedonia has 
made significant progress in improving the business climate, reflected in its 23
rd place in the 2013 
Doing Business  ranking (94th in 2006), the best in eastern Europe.3 For example, as a result of the 
new Law on Business Registration, the time to register a company was cut from 48 days in 2006 
to 4 in 2009. Business regulation was also reduced by introducing a regulatory guillotine, which 
reviewed more than 2,000 laws and by-laws out of which 64 laws and 482 by-laws were amended.  
The guillotine procedure continues, in order to achieve further reductions in administrative barriers 
and to simplify licensing procedures for doing business.  
1.14.  However, the World Bank considers that further reforms are needed to better safeguard the 
rule of law and control corruption4, which remain a problem in certain areas, including public 
procurement.5 The authorities have made some headway in combatting corruption through, 
inter alia, establishing a one-stop-shop for enterprise creation, strengthening the institutional and 
legal framework, and introducing regulatory reforms. Reflecting this progress, the 2012 Transparency International Corruption Perception Index  ranked the former Yugoslav Republic of 
Macedonia 69
th out of 176 countries (103rd out of 159 countries in 2005), one of the best scores in 
south-eastern Europe.6 The State Commission for Prevention of Corruption continues to develop 
and promote inter-institutional cooperation to prevent corruption and conflicts of interest. 
                                               
2 European Commission (2012), the former Yugoslav Republic of Macedonia 2012 Progress Report, 
Commission Staff Working Document, SWD (2012) 332 final, Brussels. Viewed at: http://ec.europa.eu/  
enlargement/pdf/key_documents/2012/package/mk_rapport_2012_en.pdf. 
3 World Bank (2013). 
4 World Bank (2012), Country Partnership Strategy Progress Report for the Republic of Macedonia for 
the Period FY11-FY14, p.5. Viewed at: http://documents.worldbank.org/curated/en/2012/11/16926571/  
macedonia-country-partnership-strate gy-progress-report-period-fy11-14. 
5 The authorities have undertaken measures to tackle the problem notably through better transparency 
requirements for even low value contracts and the development of the national electronic public procurement system used for publication of notices, e-tendering and e-auctions. 
6 Transparency International online informat ion. Viewed at: www.transparency.org/country MKD. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 14 - 
 
  Nevertheless, according to UNCTAD, corruption is still a significant problem despite progress in the 
institutional setting and adoption of most of the necessary laws.7 
1.15.  In addition to improving the business climate, the country has been investing in 
technological industrial development zones (TIDZs) with good access to infrastructure and tax 
incentives. These are encouraging business to in vest in the former Yugoslav Republic of 
Macedonia, making FDI the cornerstone of future export-oriented growth. A new patent portal has 
been launched with the aim of stimulating pate nt registrations and promoting innovation. The 
authorities are aware that supportive macroeconomic policies and continued structural reforms to 
improve competitiveness are crucial to increasing investment and productivity. Future growth will 
require reforms that aim to further lower the co st of doing business, including infrastructure 
investments and regulatory reforms, as well as those that improve the functioning of the labour 
market and raise worker skill levels. 
1.16.  The former Yugoslav Republic of Macedo nia has gradually reduced trade protection under 
the umbrella of the EU Stabilization and Associ ation Agreement (SAA), signed in 2001; the WTO 
Agreement, signed in 2003; and the Central Euro pean Free Trade Agreement (CEFTA), signed in 
2006. Over 90% of trade is transacted under free-trade agreements and the Government has signed around 20 new bilateral agreements on free transit, and increased the number of bilateral 
individual transport licences. Most agri-processors have been privatized and around 80% of arable 
land is owned by private farmers, although th e land market functions poorly. Progress with 
privatization of manufacturing and services has slowed, and efficiency and productivity levels in these sectors remain low. 
1.4  International Trade 
1.4.1  Goods 1.17.  As a small country that is relatively op en to trade, the former Yugoslav Republic of 
Macedonia is highly dependent on the international economy and is susceptible to external shocks. 
Between 2006 and 2012 while exports grew from €1. 9 billion to €3.1 billion (41% of GDP) imports 
rose from €3 billion to €5.1 billion (65% of GDP)  (Chart 1.1 and Appendix tables A1.1 and A1.2). 
The large trade deficit can be partly explained by  the importation of large items essential for the 
expansion of the economy: petroleum, iron and steel, textile yarn, road vehicles, and electrical energy. 
1.18.  The manufacturing sector dominated exports during the review period, accounting for 
around 70% of the total. However, notable shif ts have occurred within manufacturing. In 2006, 
the former Yugoslav Republic of Macedonia's export s were quite highly concentrated, with iron and 
steel, textiles and clothing, and food and beverages accounting for 67% of the total; by 2012, 
their share had fallen to 52% of the total. Clothing products, including blouses, shirts, and trousers 
are leading export commodities, reflecting the count ry's reliance on outward processing trade. The 
share of chemicals, and especially catalysts and ca talytic preparations, has increased from 4.2% to 
17% of exports during 2006-12, reflecting recent  successes in attracting manufacturing FDI. 
1.19.  The most important export partners are the EU member states, which in 2012 accounted for 
63% of exports and the CEFTA countries for 24% (Chart 1.2 and Appendix Tables A1.3 and A1.4). 
1.20.  Consequently, the Macedonian economy is highly dependent on external developments and 
is especially vulnerable to external shocks. Fo r example, Greece is an important trading partner 
(accounting for 12% of imports and 5% of export s) and a prolonged recession in Greece could 
negatively affect growth prospects. A decline in export trade with Greece has so far been mitigated 
by increased trade with other countries. Greece is also a major transport corridor for critical 
products like oil, iron, and steel, which pass mainly through the port of Thessaloniki. On the import side, the EU's share has increased, as has th at of China whereas the share of the Russian 
Federation, which used to be the largest source of imports, has declined markedly. 
                                               
7 UNCTAD (2012), Investment Policy Review of the former Yugoslav Republic of Macedonia, p. 57. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 15 - 
 
  Chart 1.1 Composition of merchandise trade, 2006 and 2012 
2006 2012
(a)    Exports (f.o.b.)
Manufactures
69.4
Iron and steel
20.8 Chemicals
17.0Textiles
1.5Clothing
14.9
Other semi-
manufactures
3.2Machinery and 
transport 
equip.
9.9Food
14.9Agricultural raw 
material
0.6
Ores and other 
minerals
5.9
Fuels
6.4
Total:   €1.9 billion Total:  €3.1 billion  
(b)    Imports (c.i.f.)
Chemicals
9.7Transport 
equipment  
6.3
Manufactures
62.8Electrical 
machines
6.6Fuels
20.2
Iron and steel
9.9Food
11.7Agricultural 
raw material
1.2
Ores and other 
materials
2.2
Non-ferrous 
metals
1.8Textiles
9.0Clothing
1.7
Non-electrical
machinery
5.0
Iron and steel
5.7Food
13.0Agricultural 
raw material
0.9
Non-ferrous 
metals
7.3Clothing 
1.0Other
0.1
Textiles 
6.7
Agri-
culture
12.9
Other semi-
manufactures
8.4Transport 
equipment  
4.4
Chemicals
11.3Manufactures
53.8
Total:   €3.0 billion Total:   €5.1 billion Per cent
Manufactures
71.8
Other 
consumer 
goods
4.9Other
0.1Other 
consumer 
goods
4.3
Mining
13.6
Chemicals
4.2
Electrical 
machines
6.5Mining
12.6Agriculture
15.5
Non-electrical 
machinery
5.5Other 
consumer 
goods
5.2
Mining
32.2Other semi-
manufactures
5.5
Other semi-
manufactures
9.0Clothing
21.2Other 
consumer 
goods
4.0
Mining
24.1Agri-
culture
13.9Other
0.2 Other
0.0
Ores and 
other 
materials
3.5
Fuels
21.3Other 
mining
0.4Textiles
1.9Agriculture
16.8
Iron and steel
27.8Food
16.1
Agricultural raw 
material
0.8
Ores and other 
minerals
3.9
Fuels
9.4
Other mining
0.3Machinery and 
transport equip.
4.9
 
Source: WTO Secretariat calculations, based on UNSD, comtrade database (SITCF Rev.3). 
 
  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 16 - 
 
  Chart 1.2 Direction of merchandise trade, 2006 and 2012 
2006 2012
(a)    Exports (f.o.b.)
Total:   €1.9 billion Total:  €3.1 billion
(b)    Imports (c.i.f.)
EU(27)  52.9Europe  68.5Russian 
Federation
15.1
Turkey 3.3Other CIS
3.4China  3.7Other 
0.8
Asia
8.2
CIS  18.5
EFTA 1.6EU(27)  58.4Europe 77.1Other Asia
5.9
Turkey 5.0
CEFTA 11.4China  5.8Other 
0.9
Asia
11.6
CIS  
7.1
EFTA 2.3America
3.3
Total:   €3.0 billion Total:   €5.1 billionPer cent
Other CIS 1.6America
1.0America
1.7
Russian 
Federation
5.5EU(27)
62.8
Other Asia
4.5EU(27)
61.2Other Europe 
2.5
CEFTA
24.4
CEFTA 10.6Other   
2.0
America
3.9Other
1.9
Europe
96.8CEFTA
32.8Asia 
0.4
Europe
89.7Asia   
6.6Other Europe
2.7
a
 
a  Republic of Moldova included in CEFTA for calculation purpose. 
Source: WTO Secretariat calculations, based on UNSD, comtrade database (SITCF Rev.3). 
1.4.2  Services 
1.21.  Exports and imports of services each a ccounted for about 11% of GDP in 2012 (Chart 1.3) 
with transportation and travel services accounting for over half of exports. The transport services 
trade deficit lessened during the review period, and other categories such as communication, 
computer and IT services grew relatively rapidly. The authorities state that the trade policy objective for services is to create the necessary conditions for modernization in order to ensure WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 17 - 
 
  competitiveness. Export promotion activities are important in some sectors, such as tourism where 
the Government provides incentives, and the ITC sector, which has been identified as a growth 
sector. 
Chart 1.3 Trade in services, 2006 and 2012 
2006 2012
(a)    Exports 
Other business 
services
18.1Other business 
services
22.9Communication
7.1
Total:   €479. 1 million Total:  €828.9 million
(b)    Imports 
Travel
12.2Other business 
services
23.1Construction
0.5Transportation
39.4
Computer & 
information
6.9
a
Travel
10.7Construction
4.0
aOther
13.7Travel
22.0
Other business 
services
27.2
Total:   €461.7 million Total:   €806.3 millionPer cent
Construction
5.5
Travel
21.4Other
4.3
Transportation
32.1
Communication
10.1Transportation
30.9Construction
8.0Other 
7.6
Communication
3.3Transportation
36.7Computer & 
information
6.1
Other
13.2
Computer & 
information
4.5Communication
4.8Computer & 
information
3.9
aa
 
 
a Other business servic es refer to merchanting and other trade-related services, operational 
leasing services, miscellaneous business, professional, and technical services, and personal and cultural services. 
 
Source: WTO Secretariat calculations, based on balance-of-payments information in National Bank of the 
  Republic of Macedonia. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  1.5  Foreign Direct Investment 
1.22.  FDI inflows were very small until 1998. They were larger between 1998 and 2006, due 
mainly to the privatization of state-owned firms and acquisitions of banks and major companies by foreign investors. The sale of the national telecommunications operator to Magyar Telekom, the 
Hungarian state affiliate of Deutsche Telekom in 2001, has been the largest FDI transaction so far. 
During the period under review, FDI inflows were the equivalent on average of 4.5% of GDP per year, although there were significant peaks and troughs (Table 1.2 and Appendix Table A1.5). 
After a record €506 million of inflows in 2007, FDI dropped again, due mainly to the deteriorating 
international environment. 
Table 1.2 Foreign direct investment flows by activity 
(% of total) 
  2006  2007  2008  2009  2010 2011 2012  
Agriculture, forestry and fishing 0.6 2.1 1.0 0.1 0.6 0.8 0.7 
Mining and quarrying 0.2 1.8 17.6 -4.0 26.3 12.9 -64.5 
Manufacturing 28.8 25.1 -3.9 33.4 53.2 61.9 40.6 
  Food products, beverages and tobacco 
  products 1.6 4.3 .. 23.5 8.5 14.4 -26.2 
  Metal & machinery products 12.3 17.4 .. -32.6 -8.2 11.8 27.1 
  Vehicles & other transport equipment 0.3 0.1 .. 37.7 43.2 26.4 -0.3 
  Other manufacturing 14.6 3.3 0.0 4.6 9.8 9.4 40.0 
Electricity, gas and water 34.6 -0.7 6.6 16.8 0.7 1.3 57.9 
Construction 0.9 2.9 5.1 6.9 11.0 6.3 -3.7 
Services 34.5 67.0 73.8 47.8 8.3 16.8 -10.8 
Non-allocated 0.4 1.9 0.0 -1.0 -0.1 0.0 0.9 
Sub-total 99.6 98.1 100.2 101.0 100.0 100.0 21.4 
  Private purchases and  sales of real estate .. .. -0.2 .. 0.0 0.0 0.0 
  Undistributed-reinvested earnings and 
  part of other capital .. .. .. .. .. .. 78.6 
Total 100.0  100.0  100.0  100.0  100.0 100.0 100.0  
Total in € million 344.8  506.0  399.0  145.0  160.0 336.8 104.8  
 
.. Not available. 
 Source: Information provided by the authorities an d National Bank of the Republic of Macedonia. 
 Viewed at: http://www.nbrm.mk/  [10 April 2013]. 
1.23.  In 2012, FDI slumped from €337 million to only €105 million; much of the decrease is due 
to the outflow of profits of foreign-owned companie s. Although the global economic crisis has no 
doubt played a role in limiting funds available for investment, rule of law concerns, governance 
problems, and stalled EU integration have affected the attraction of significant FDI. Large outflows were registered in mining and quarrying, and food products, beverages, and tobacco. The steep 
decline in FDI came despite a government campaign, including extensive media promotion in 
2012. Although FDI policy has been pursued alongside a favourable tax policy (a flat tax rate of 
10%) and further incentives for foreign investors, it appears that a number of local factors have affected investment inflows. According to the authorities, these concern the protection of 
ownership rights of foreign investors, the stability of the legal environment and consistent 
implementation of regulations, the duration of le gal procedures and their efficiency, as well as the 
transparency of administrative procedures. 
1.24.  Equity capital was the largest component of  FDI inflows during the review period, although 
reinvested earnings and other capital (intra-company  loans) played an important role in individual 
years. For example, in 2012 reinvested earnings accounted for four fifths of the total, the rest being classified as equity capital and loan s. Between 2006 and 2008, FDI inflows were 
concentrated in the services sector, in particular in financial intermediation, as well as in 
electricity, gas, and water supply. The power di stribution company AD ESM was sold in 2006 to 
EVN, an Austrian investor. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 19 - 
 
  1.25.  By origin, the largest foreign investors are EU countries, notably Greece, the Netherlands, 
Austria, and Hungary (Chart 1.4). However, in some cases the nationality of the immediate and 
final investor may differ. Most is invested in manufacturing, followed by financial and insurance activities and wholesale and retail trade. 
Chart 1.4 FDI inflows and stock by sector and origin, 2011 
Sector Origin
(a)    Flows
Other 
manufactures
9.4
EU (27)
62.4CEFTA
2.7Other Europe
20.7Americas
13.3
Total:   €336.8 m illion
(b)    Stock
Agriculture, 
forestry and 
fishing  
0.8Mining & 
quarrying
4.9
Metal & 
machinery  
12.3
Food, beverages
& tobacco  
8.0
Vehicles & transport 
equip.
6.9
Electricity, gas 
& water
6.4
Construction
2.3Financial
& insurance activities
26.8Wholesale & 
retail trade  
11.0Americas
8.1
EU (27)
78.7CEFTA
5.3Other Europe
7.0Other
0.9
Total:   €3,649.4 millionPer cent
Other
20.5Middle East
-1.0
Mining & quarrying
12.9
CIS
2.0Agriculture, 
forestry and 
fishing  
0.8
Construction
6.3
Vehicles & 
transport equip.
26.4
Metal & 
machinery  
11.8Electricity, gas 
& water
1.3
Food, beverages
& tobacco  
14.4Services
16.8
 
 
Source: Information provided by the authoritie s and National Bank of the Republic of  Macedonia.  
  Viewed at: http://www.nbrm.mk/ [10 April 2012]. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 20 - 
 
  1.26.  Significant FDI flowed into the automotive components industry between 2009 and 2011 in 
which three important transnational corporations are operating in the TIDZs (Johnson Matthey, Johnson Controls and TeknoHose). The former Yugoslav Republic of Macedonia has been successful in attracting greenfield FDI, particularly in th e automotive components sector. FDI amounted to 
€337 million or 4.5% of GDP in 2011, higher than for 2009 and 2010. Growth in FDI was 
principally due to higher equity capital and rein vested earnings. According to the IMF, based on 
improvements in the business climate and implem entation of further structural reforms, a 
significant pipeline of ongoing and planned projects should lead to a continuing increase in FDI 
matching the levels of the most favourable pre-crisis years.
8 
1.6  Outlook 1.27.  The short-term outlook for the former Yugosl av Republic of Macedonia (and for its regional 
neighbours), is uncertain given the current global turmoil and doubts about recovery in the 
eurozone. Growth is expected to pick up to around 2% for 2013, and possibly to subsequent rates of over 3%, provided that global conditions improve significantly and the authorities continue to 
pursue structural reforms and supportive macroe conomic policies, and realize planned FDI to 
further diversify the export basket. In its latest country report, the IMF expects economic activity 
to pick up to around 2% with inflation expected to moderate to 2.5% in 2013.
9 The IMF expects 
the current account deficit to deteriorate in 2013 due to increased FDI-related imports, with 
exports coming on stream only gradually. 
1.28.  Reforms to improve competitiveness will be key in further boosting investment and 
increasing productivity. Continuing reforms th at aim to lower costs for business, including 
infrastructure and regulatory reforms, as well as those that improve the functioning of the labour 
market, are also central to future growth. However, the downside risks are significant, with any further deterioration in the external environment likely to spill-over into the former Yugoslav 
Republic of Macedonia mainly through trade and investment channels, possibly leading to stagnant 
or even declining economic output. 
 
                                               
8 IMF 2012), p. 7. 
9 IMF (2013). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  2  TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
2.1  Introduction 2.1.  During the decade since its accession to the WTO, the most important goal of the 
Government of the former Yugoslav Republic of Macedonia has been EU integration. Achievement 
of candidate status for EU membership provided a strong incentive for realizing the goals, 
directions, and priorities set by the Government as part of the National Development Plan 2008-
2012, continuing with reforms towards fulfilling the terms for EU membership, establishing an 
efficient accession negotiation structure, building negotiation positions, and achieving a negotiation 
date. 
2.2.  The current 2011-2015 government programme maintains the same broad priorities, 
including emphasis on economic growth and privat e sector development, and integration into the 
EU.
1 To this end, the authorities are harmonizing national legislation with the EU acquis 
communautaire , with notable achievements in procurement, customs, transport policy, taxation, 
and various aspects of trade policy in goods and services. The EU Commission's 2012 progress 
report notes that the former Yugoslav Republic of Macedonia continues to fulfil the criteria of a 
candidate State and highlights the advances it has made towards becoming a market economy. 
2.2  General legal and institutional framework 
2.3.  The former Yugoslav Republic of Macedo nia declared its independence from the former 
Socialist Federal Republic of Yugoslavia in 1991 and adopted its current Constitution in the same year. The former Yugoslav Republic Macedonia is a parliamentary democracy with an executive government composed of a coalition of parties from the unicameral legislature (Sobranie) and an 
independent judicial branch with a constitutional court. The President is the Head of State although 
executive power rests with the Government, headed by the Prime Minister. The Government proposes laws, the budget, and other regulations for adoption by the legislature and adopts 
decrees and other regulations necessary for the execution of laws. Ministries work within the 
framework provided by the Constitution and laws, and are accountable to the Government.  
2.4.  The Ministry of Economy is the main go vernment entity responsible for formulating and 
implementing policies relating to foreign trade. It  is responsible for concluding and signing trade 
treaties and other trade-related agreements with third countries. Foreign trade policy is formulated in close contact with the Ministry of Finance, which is also responsible for cooperation with international financial institutions and policies concerning banking and credit, foreign exchange, 
and customs. 
2.5.  The Customs Office in the Ministry of Finance has competence in the implementation of the 
Customs code and tariff policies. The Agency for Foreign Investment and Export Promotion is 
responsible for coordinating and implementing export promotion for Macedonian companies. The 
Ministry of Agriculture is in charge of measures relating to the export and import of agricultural goods. Tourism and catering is under the comp etence of the Ministry of Economy. Local 
governments have no direct role in foreign trade operations or foreign economic relations, or with 
respect to taxation applicable to imports, subsidies or investments. 
2.6.  The private sector and NGOs prov ide inputs to trade policy formulation, inter alia,  through 
chambers of commerce and the business community. One channel has been through regular 
conferences on enhancing Macedonian exports in volving the Government and the private sector. 
The National Council for Entrepreneurship and Competitiveness brings together the private, civil, and public sectors organized into four committees covering: SMEs and entrepreneurship; 
technological development and innovation; human resources; and investment and export. The 
Customs Administration chairs meetings of the Advisory Council, established in 2009, composed of representatives of chambers of commerce, transp ort and freight forwarding associations, various 
industries, and Customs.  
2.7.  The judicial system does not provide for specialized courts (e.g. commercial courts). 
Article 15 of the Constitution guarantees the right of  appeal against individual legal acts brought in 
                                               
1 Viewed at: http://www.vlada.mk/ . WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  a court or an administrative procedure. Administrative appeals of customs and other government 
decisions on issues covered by WTO Agreements are conducted under the general rules for appeal provided in the Law on Administrative Procedure.  The Administrative Court, established pursuant 
to the Law on Courts, is competent, inter alia, on disputes arising from the implementation and 
enforcement of the provisions of procurement an d concessions-related agreements. Domestic and 
foreign parties are subject to the same treatm ent in appeal procedures. The Arbitral Court 
(arbitration) and the Court of Honour act as independent bodies within the framework of the 
Chamber of Commerce for voluntary se ttlement of commercial disputes.  
2.8.  It appears that further improvements rega rding the judicial system and the functioning of 
courts, are being undertaken to bring the country into line with EU standards, and to increase its attractiveness as an investment destination. In a ddition, progress has been made to overcome the 
lack of clear property rights protection, which represents an important barrier to increased foreign 
investment-led economic growth. For example, pursuant to the Law on Courts, 27 courts have been established, including a dozen with extend ed jurisdiction and the competence to decide, 
inter alia, upon trade-related disputes as well as cases of copyright and industrial property rights. 
2.3  Main trade-related legislation 2.9.  During the 20 years since independence, successive governments have in the main 
maintained a pro-growth and prudent macroeco nomic framework and introduced significant 
structural reforms. The current government programme aims to achieve broad objectives, among them: to increase economic growth and competitiv eness to generate higher rates of employment; 
to ingrate the former Yugoslav Republic of Ma cedonia into the EU; and to strengthen public 
administration and transparency and the rule of law.  In addition to these broad national goals, the 
country has clearly identified its path to EU membership, notably through the annually revised National Programme for Adoption of the Acquis (NPAA), which focuses on meeting EU 
requirements in several areas on the basis of the European Partnership, the Stabilisation and 
Association Agreement and the annual Commission Prog ress Reports. According to the authorities, 
the process of law approximation is supported by 29 inter-ministerial working groups based on the 
acquis communautaire screening chapters . 
2.10.  The WTO Agreements and the former Yugosl av Republic of Macedonia's current and future 
trade relations with the EU are the main factors influencing the trading system. Since its accession to the WTO, the former Yugoslav Republic of Ma cedonia has reformed its policies in trade and 
related areas with the aim of bringing domestic legislation into line with WTO requirements and the 
EU acquis communautaire . This has entailed a broad review and the updating of almost all trade-
related legislation, a process that is continuing (Table 2.1). 
2.11.  The former Yugoslav Republic of Macedonia is well integrated in multilateral trading 
systems. It has been a member of the WTO since 2003, it has signed an Association Agreement (SAA) with the European Union and is a member of the Central European Free Trade Area 
(CEFTA). In addition, it has signed a number of bilateral trade agreements, including with Ukraine 
and Turkey. Related to participation in the trade liberalization process, significant efforts have been made to eliminate non-tariff barriers to trad e. The framework for regulation, standardization, 
accreditation, and conformity assessment has been  reformed to facilitate transposition of the 
acquis communautaire, and the Standardization Institute is a full member of the European 
standardization organizations. According to the authorities, the economic integration of the former Yugoslav Republic of Macedonia in the world economy is being conducted simultaneously through 
three mutually compatible processes: integration in the WTO trading system, integration in the 
European Union, and regional trade integration. 
2.4  Participation in the WTO 
2.12.  The former Yugoslav Republic of Macedo nia became a Member of the WTO on 4 April 2003 
and, following accession, its markets for goods and services were opened and liberalized, including 
the abolition of all non-tariff measures. According to the authorities, all laws and regulations governing the right to trade in goods, as well as the fees and charges levied on such rights, 
comply with Macedonian WTO commitments an d are implemented accordingly. The Export 
Promotion Fee of 0.1% was eliminated in 2005 and the country does not apply any duties or charges other than customs duties. The different excise taxes for imported and domestic tobacco WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  products, which were observed as WTO-inconsistent  during the accession process, were equalized 
over a three-year transition period and completed by 2007. The tax regime complies with GATT Article III, and the former Yugoslav Republic of Macedonia eliminated the last portion of its WTO-
inconsistent import licences (for oil and oil de rivatives) at the end of 2003. The current import 
licensing regime is considered to be in full compliance with WTO rules. Agricultural export 
subsidies, as specified in the schedule of commitments annexed to the protocol of Accession, were also eliminated. The country grants at least MFN treatment to all its trading partners. 
Table 2.1 Main trade-related laws, 2013 
Area Legislation 
Foreign trade Law on Trade (OG No.16/04, 128/06, 63/07, 88/08, 159/08, 20/09, 99/09, 
105/09, 115/10, 158/10, 36/11 and 53/11) 
 Law on Control of Export of Dual-Use Goods and Technologies (OG No. 82/05, 
84/07, 158/10 and 136/11) 
 Decision on Classification of Goods into Forms of Export and Import               
(OG No. 42/13) 
 Decision on Procedure of determining the List of dual-use items and technology 
(OG No. 37/13) 
Customs Law on Customs Tariff (OG No. 23/03, 69/04, 10/08, 160/08, 35/10 and 11/12) 
 Customs Law (OG No. 39/05, 4/08 48/10, 158/10, 44/11, 53/11, 11/12 and 
171/12) 
 Implementing Regulation on the Law on Customs Law (OG No. 66/05, 73/06 
40/07, 62/07, 42/09, 48/09, 38/10 46/10, 61/10, 141/11, 147/11, 158/11, 14/12 and 02/13) 
 Rulebook on filling the customs declaration and the list of codes to be used    
(OG No. 97/05, 147/08, 55/09, 141/09, 62/10, 12/11, 8/12, 20/12, 61/12, 
124/12 and 155/12) 
 Regulation on conditions for the goods to be subject to autonomous measures 
for reduction or suspension of the import duties, the procedure for the 
introduction of autonomous measures, as well as the manner of their distribution 
or use (OG No. 119/05) 
Taxation Profit Tax Law (OG No. 80/93..135/11) 
 Law on Personal Income Tax (OG No. 0/93..166/12) 
 Law on Value Added Tax (OG No. 44/99..155/12), 
 Law on Excises (OG No. 32/01, 135/11 and 82/2013), 
 Rulebook on Implementing the Law on Excises (OG No. 40/01 to 106/12) 
Contingency trade 
remedies Law on Trade (OG No. 16/04, 128/06, 63/07, 88/08, 159/08, 20/09, 99/09, 
105/09, 115/10, 158/10, 36/11 and 53/11) 
 Decision on procedure and the method of determining anti-dumping duty       
(OG No. 109/07) 
 Decision on Procedure and the Method of Determining Countervailing Duty     
(OG No.28/05) 
 Decision on Procedure and the Method  of Determining Safeguard Measures 
against Increased Imports (OG No. 28/05) 
Government 
procurement Law on Public Procurement (OG No. 136/07; 130/08; 97/10; 53/11; 185/11; 
15/13) 
 Law on Concessions and Public Pr ivate Partnership (OG No. 6/12). 
State aid Law on Control of State Aid (OG No.145/10) 
Investment Law on Trade Companies (OG No. 28/04, 84/05, 25/07, 87/08, 42/10, 47/10, 
24/11 and 166/12) 
 Law on Establishing Agency for Foreign Investments and Export Promotion     
(OG No.57/01 and 36/11) 
Free zones Law on Technological Industrial Development Zones (OG No. 15/08.127/12) 
SPS and TBT Veterinary Health Law (OG No. 113/07, 24/11, 136/11 and 123/12) 
 Food Safety Law (OG No. 157/10, 53/11, 1/2012) 
 Feed Safety Law (OG No. 145/10 and 53/11 and 1/12) 
 Law on Veterinary Medicinal Products (OG No. 42/2010 and 136/11) 
 Law on animal by-products (OG No. 113/07) 
 Plant Health Law (OG No. 29/05, 81/08, 20/09, 57/10, 17/11 and 148/11) WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Area Legislation 
 Law on Fertilizes (OG No. 110/07, 20/09, 17/11 and 148/11) 
 Law on Seed and Planting Material for Agricultural Plants (OG No. 39/06, 89/08, 
1/10 and 53/11) 
 Law on Medicines and Medical Devices (OG No. 106/07 and 88/10) 
 Law on Nature Protection (OG No. 67/04, 14/06, 84/07, 35/10 and 47/11) 
Competition Law on Protection of Competition (OG No. 145/10 and 136/11) 
Intellectual property 
rights Law on Industrial Property (OG No. 21/09 and 4/11) 
 Law on Topography of Integrated Circuits (OG No. 05/98, 33/06 and 136/11) 
 Law on Customs Measures for Protection of In tellectual Property Rights          
(OG No. 38/05, 107/07, 135/11 and 160/11) 
 Law on Copyright and Related Rights (LCRR) (OG No. 115/10; 51/11) 
Company establishment  Law on Trade Companies (OG No. 28/04, 84/05, 25/07, 87/08, 42/10, 47/10, 
24/11 and 166/12) 
 Law on One Stop-shop System and the Register of Trade Companies and Other 
Legal Entities (OG No. 84/05, 13/07, 150/07, 140/08, 17/11 and 53/12) 
Agriculture and 
forestry Law on Agriculture and Rural Develo pment (OG No. 49/10, 53/11, 126/02 and 
15/13) 
 Law on Wine (OG No. 50/10, 53/11, 06/12, 104/11, 64/12 and 23/13) 
 Law on Quality of Agricultural Products (OG No. 140/10, 52/11 and 55/12) 
 Law on Establishment of a Farm Accountancy Da ta Network - FADN               
(OG No. 110/07 and 53/11). 
 Law on Organic Agriculture (OG No. 146/09, 53/11) 
 Law on Establishment of the Paying Agency (OG No. 72/07, 5/09) 
 Law on Forests (OG No. 64/09, 24/11, 53/11 and 25/13 
Mining Law on Minerals Resources (OG No. 123/12 and 25/13) 
Energy Energy Law (OG No. 16/11 and 136/11) 
Manufacturing Law on Product Safety (OG No. 33/06, 63/07, 24/11, 51/11 and 148/11 
 Law on Construction Products (OG No. 39/06, 86/08, 47/11 and 136/11) 
 Law on Standardization (OG No. 54/2002 and 84/2012) 
 Law on Accreditation (OG No. 120/09 and 53/11)  
 Law on Metrology (OG No. 55/02, 84/07, 120/09, 136/11 and 06/12) 
 Law on control on articles from prec ious metals (OG No. 23/95, 22/07 and 
136/11) 
 Law on Market Surveillance (OG No. 48/10) 
 Law on Environment (OG No. 53/05/81/05, 24/07, 159/08, 83/09, 48/10 and 
124/10) 
 Law on Crafts (OG No. 62/04, 55/07, 115/10, 36/11, 53/11) 
 Law on Chemicals (OG No. 145/10 and 53/11) 
 Law on Cosmetic Product Safety (OG No. 55/07 and 47/11) 
 Law on Precursors ( OG No. 37/04, 40/07 and 53/11)  
Telecommunications Law on Electronic Communications (OG No. 13/05, 14/07, 55/07, 98/08, 83/10, 
13/12, 59/12, 123/12 and 23/13) 
Postal services Law on Postal Services (OG No. 158/10) 
Financial services Law on the National Bank of the Republic of Macedonia (OG No. 158/10 and 
123/12) 
 Banking Law (OG No. 67/07, 90/09, 67/10, 26/13) 
 Law on Foreign Exchange Operations (OG No. 34/01, 49/01, 103/01, 51/03, 
81/08, 24/11 and 135/11) 
 Law on the Macedonian Bank for Development Promotion (OG No. 105/2009) 
 Insurance Supervision Law (OG No. 27/02, 79/07, 88/08, 67/10, 44/11) WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Area Legislation 
Transport Aviation Act (OG No. 14/06, 24/07, 103/08, 67/10, 24/12, 80/12 and 155/12) 
 Law on Railway System (OG No. 48/10, 23/11, 80/12 and 155/12) 
 Law on Interoperability of Rail System (OG No. 17/11) 
 Law on Public Roads (OG No. 84/08, 52/09, 124/10, 23/11, 53/11, 44/12 and 
168/12) 
 Law on Road Transport (OG No. 68/04, 127/06, 114/09, 83/10, 140/10, 17/11, 
53/11, 6/12, 23/13 
 Law on Carriage of Dangerous Goods in Road and Railway Transport              
(OG No. 92/07, 161/09, 17/11, 54/2011, 13/13)  
Tourism Law on Tourism Activities (OG No. 62/04, 89/08, 12/09, 17/11, 47/11, 53/11 
and 123/12) 
 Law on Catering Activities (OG No. 62/04, 89/08, 115/10, 53/11 and 14/12) 
 
Source:  Information provided by the authorities. 
2.13.  As a result of the market access negotiatio ns on goods in the context of accession to the 
WTO, the former Yugoslav Republic of Macedonia bound all of its tariffs. Its policy of external 
economic opening and liberalization has resulted in continuous reductions in tariff rates and adoption of the harmonized customs system. Import quotas have been removed and import 
licences for specific products are issued on a first come, first served basis. The tariff-rate quota 
included in the former Yugoslav Republic of Macedonia's Schedule of Concessions and Commitments on Goods is distributed to MFN supplie rs and allocated on a first come, first served 
basis. The tariff-rate quotas agreed with FTAs partners are also allocated on a first-come, first-
served basis. Existing national legislation has been  brought into line with WTO rules and principles, 
and the country's accession commitments, including the phased reduction of customs duties, have been fully implemented within the agreed tran sition period, which ended in 2012. The former 
Yugoslav Republic of Macedonia is a signatory to the Agreement on Trade in Civil Aircraft and in 
June 2013 was granted observer status in the Committee on Government Procurement. 
2.14.  Concerning the transparency requirements stipulated in Article X of the GATT 1994, Article 3 
of the GATS, and the WTO Agreements such as  on Import Licensing Procedures, Customs 
Valuation, TBT, and SPS, laws and other regulations are published before entry into force pursuant to Article 52 of the Constitution. Laws and other regulations are published in the Official Gazette  
not later than 7 days following enactment and enter into force at the earliest on the 8th day 
following publication. Regarding notification  requirements, at end-June 2013, a number of 
notifications were under preparation.
2 
2.15.  To date, the former Yugoslav Republic of  Macedonia has not been involved in any cases 
under the WTO dispute settlement mechanism. 
2.16.  The Government has attached considerable importance to the Doha Development Agenda 
(DDA) negotiations. As a landlocked country, it closely monitors progress in the trade facilitation 
negotiations. On agriculture, it supports reform s in all three pillars (market access, domestic 
support, and export subsidies), and agrees with th e position of very recently acceded Members (or 
VRAMs) that such Members should not be required to undertake reduction commitments in all 
pillars. During accession, the former Yugoslav Republic of Macedonia committed to a very low level 
of domestic support, implemented substantial ma rket access commitments, and to provide no 
export subsidies. On non-agricultural market access, the country supports the VRAM position that it be excluded from further tariff reductions, considering the numerous market access 
commitments undertaken during accession. Similarly, in the services area, the Government is of 
the view that account should be taken of the extensive market access commitments made during accession. On TRIPS, the country follows the negoti ations on public health, extending the list of 
patents regarding protection of biodiversity and traditional knowledge, and achieving a higher level 
of protection for products with geographical indication. It ratified the Protocol for Amending the TRIPS Agreement. 
                                               
2 Agreement on Agriculture: Arti cle 18.2 notification on domestic support and Article 10 and 18.2 
notification on export subsidies. Also under the TRIP S Agreement notification of laws and regulations under 
Article 63.2 for industrial property an d copyright and related rights laws. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  2.17.  Macedonian officials are beneficiaries of WTO technical assistance to build trade capacity, 
participating in training and e-training courses, seminars, and workshops. 
2.5  Preferential Trade Agreements and Arrangements 2.18.  In the period since accession to the WTO,  the former Yugoslav Republic of Macedonia has 
concluded five FTAs. Three are plurilateral agreements, with the countries of the EU, CEFTA, and 
EFTA, and two are bilateral agreements, with Tu rkey and Ukraine. The free trade agreements 
constitute the overall framework for developing regional cooperation and encouraging further 
integration in European economic and political processes. 
2.19.  Macedonian trade is strongly oriented  towards its FTA partners. Currently, 90% of 
Macedonia's exports and nearly 80% of its imports are carried out under FTAs (Table 2.2). The authorities have estimated that around 80% of trad ing is free of custom duties and 7% takes place 
with preferential custom duties. The FTAs allow th e former Yugoslav Republic of Macedonia to be 
included in the system of diagonal accumulation of origin of goods concerning the EU, EFTA, the 
countries of central and eastern Europe, and Turkey, CEFTA, and other SAP (Stabilization and 
Association Process) countries, between the former  Yugoslav Republic of Macedonia, the EU, and 
Turkey 
Table 2.2 Trade under Preferential Agreements, 2012 
(in % of total trade) 
FTA Entry into force Exports Imports 
EU 2001 62.8 58.4 
CEFTA 2007 24.4 11.4 
EFTA 2001 0.8 2.3 
Turkey 2000 1.7 5.0 
Ukraine 2001 1.5 1.3 
Total FTA  91.2 78.3 
 
Source: WTO Secretariat. 
2.5.1  Stabilization and Association Agreement (SAA) 
2.20.  The European Council granted the status of candidate country to the former Yugoslav 
Republic of Macedonia in 2005. The SAA between th e former Yugoslav Republic of Macedonia and 
the EU, which entered into force in 2004, remains at the core of the bilateral relationship. The SAA 
set up two stages to reach full association, whic h was scheduled to be realized within ten years. 
Harmonizing the internal market legislation (including competition, state aid, public procurement, and IP protection) was a priority in the first phase of association, and this is considered to be at an advanced stage. 
2.21.  The process for approximation of laws is supported by 29 inter-ministerial working groups 
based on the acquis communautaire . The harmonization process takes place through a national 
programme for the adoption of the EU a cquis, the SAA, and the Commission progress reports. 
Based on the 2009-2012, progress reports, the EU Commission consecutively recommended to the 
Council the opening of accession negotiations. As of June 2013, the Council had not yet decided on 
the Commission's proposals. A High Level Accession Dialogue (HLAD) was launched by the 
Government and the Commission in March 2012, in order to inject new dynamism into the EU 
accession reform process, thereby strengthening confidence and boosting the country’s European prospects. It does not override the standard pre-accession procedures.  
2.22.  The trade part of the SAA - the Interim Agreement on Trade and Trade Related Matters - 
entered into force in June 2001. It established a free-trade area in goods between the two parties. 
Liberalization has been asymmetric, with the EU liberalizing at a faster rate. Accordingly, all tariffs and QRs on Macedonian exports of industrial and agricultural products to the EU market were 
abolished from the outset. Only four agricultural  food products exported to the EU market are 
subject to annual quotas (wine, baby beef, sugar,  and fish). Exports from the EU member states 
into the former Yugoslav Republic of Macedonia we re regulated by applying a ten-year transition 
period for the gradual reduction of customs duties for all industrial products and most agricultural 
products. The Macedonian authorities note that the Interim Agreement is consistent with the WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Stabilization and Association Agreement, applicable from 1 April 2004, three years after the 
effective entry into force of the Interim Agreement for trade and trade-related matters. The preferential treatment of customs duties app licable within the Interim Agreement remained 
applicable in the framework of the SAA. 
2.23.  Full liberalization of trade in industrial  products was achieved as of 1 of January 2011, 
thereby establishing a free-trade area in the industrial sector. In relation to trade in agricultural products, in 2012, about 1,615 tariff lines for products originating from the EU were imported 
without the application of customs duties in the former Yugoslav Republic of Macedonia (69.4% of 
the 2,326 tariff lines). The remaining 30.6% in mo st cases are subject to quotas without customs 
duties or to reduced customs duties. 
2.5.2  Central European Free Trade Area (CEFTA) 2006 
2.24.  CEFTA, a preferential trade agreement, en tered into force in 2007. Its current signatories 
are: Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Moldova, Montenegro, Serbia and the United Nati ons Interim Administration in Kosovo (UNMIK). 
The agreement aims to progressively establish a free-trade area covering trade in agricultural and 
industrial products as well as services. Trade in industrial products was liberalized by end-December 2008 and, for agricultural goods, special preferential concessions are granted by each of 
the parties. 
2.25.  The former Yugoslav Republic of Macedo nia established free trade in the industrial and 
agriculture sectors with the Republic of Serbia, Montenegro, and Bosnia and Herzegovina prior to the entry into force of the CEFTA Agreement in  2007 within pre-existing bilateral free-trade 
agreements. Free trade was established with the Republic of Kosovo on 1 January 2008, and with 
the Republic of Albania on 16 November 2011. An additional Protocol which entered into force on 15 November 2011 with Albania and 13 January 2012 with Moldova, made agricultural products 
that were subject to quotas or regular customs duty free of tariffs. However, in the case of 
Moldova both parties apply reciprocal duty-free qu otas of 100 tons on wine; above the quota, MFN 
treatment is applied. 
2.5.3  Free-Trade Agreement with the Eu ropean Free Trade Association (EFTA) 
2.26.  The EFTA-former Yugoslav Republic of Ma cedonia Free Trade Agreement entered into force 
in 2002 and covers trade in industrial products, including fish and other marine products. Liberalization has been asymmetric in favour of Macedonian exports of industrial products, which 
obtained duty-free treatment from 2002. The indust rial sector was fully liberalized from 1 January 
2011, after a transitional period of ten years. Th e agriculture sector is regulated in separate 
bilateral protocols. From 1 January 2012, diagonal  cumulation of originating goods began to apply 
among certain CEFTA members (the former Yugoslav Republic of Macedonia, Republic of Albania, 
Republic of Croatia, and Republic of Serbia) on  the one side, and the EFTA States (Switzerland, 
Norway, Liechtenstein, and Iceland). 
2.5.4  Bilateral Free-Trade Agreements 
Turkey 2.27.  The former Yugoslav Republic of Macedo nia concluded a free trade agreement with Turkey 
in 1999, which entered into force on 1 of Se ptember 2000. This agreement was asymmetric: 
Turkey eliminated tariffs on Macedonian exports of industrial products into the Turkish market 
from the outset, while the former Yugoslav Republ ic of Macedonia completed the elimination of its 
tariffs on Turkish exports in 2007, at the end of th e transitional period. Free trade in the industrial 
sector was thus established on 1 January 2008. For agricultural goods, special preferential 
concessions are granted by both parties in the form of tariff quotas. 
Ukraine 
2.28.  The former Yugoslav Republic of Macedoni a signed a free-trade agreement with Ukraine in 
2001, which entered into force in the same year. The authorities note that the application of this agreement is symmetrical, with both countries gradually abolishing customs duties.  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  2.29.  The industrial sector was fully liberalized on 1 January 2009 following a five-year 
transitional period for sensitive industrial products and seven years for the most sensitive industrial products. A Decision signed on 30 May 2009, proposed full liberalization for agricultural products subject to quotas within the FTA. The re maining agricultural products will be subject to 
regular customs duties. The Government of the fo rmer Yugoslav Republic of Macedonia adopted 
this Decision in October 2009, but the ratification procedure is not yet complete by the Ukrainian side. 
2.5.5  Other arrangements 
2.30.  As a developing country, the former Yugoslav Republic of Macedonia does not grant 
autonomous preferences for goods originating in another country. It is a member of the Global System of Trade preferences among Developing Countries (GSTP), which entered into force in 
1989 and was notified under the Enabling Clause. 
2.6  Investment regime 2.31.  According to the Government programme for the period 2011-2015, attracting foreign direct 
investment (FDI) remains the key objective towards achieving the Government's strategic priority 
of higher economic growth and a reduction in une mployment on a sustainable basis. The (fourth) 
Programme for Stimulating Investment 2011-2014
3 aims to develop policies and undertake 
reforms to increase growth and development consistent with the Government's overall strategic 
objectives. Given that both domestic and foreign investment are crucial to future competitiveness,  the Government is committed to making the investment climate more stable and predictable in order to stimulate grater investment levels. Recently, the country has been successful in attracting 
significant greenfield FDI, in particular in the automotive components sector. The shift towards 
greenfield FDI reflects the country's investment-related strengths: low labour costs and taxes; geographical proximity to assembly plants in central and Western Europe and Turkey; duty-free 
access to the large European market and a number of investment incentives, including tax 
holidays.  
2.32.  As a small and open economy, the former Yu goslav Republic of Macedonia continues to take 
steps to attract FDI. It has enacted legislation that ensures an equal footing for foreign investors 
compared to their domestic counterparts and provides numerous incentives to attract such investment. It has also concluded a number of bilateral investment treaties and other multilateral conventions that impose stricter protection standa rds for foreign investors. Overall, the investment 
regime is open to FDI and contains very few restrictions (radio broadcasting, insurance, and 
gaming) on the entry or establishment of foreign companies. 
2.33.  Regarding the institutional set-up, thr ee Ministers without Portfolio are tasked with 
attracting FDI, targeting priority sectors such as manufacturing on greenfield sites, typically 
connected with the technological industrial develo pment zones (TIDZs). In addition, a ministerial-
level Investment Committee meets on a regular basis to review investment progress and ensure 
that investment barriers are streamlined. The Ministry of Economy (specifically the Department for 
Stimulating Investments and Social Responsibility) is responsible for drawing up investment policy while the Agency for Foreign Investments and Export Promotion (Invest Macedonia) is focused on developing and implementing best practices and strategies for attracting FDI and providing 
services to interested investors and Macedonian exporters. The law establishing the Agency was 
enacted in 2010 when export promotion was added to its activities.
4 The Agency has become the 
main if not the sole port of call for potential investors, especially greenfield investors interested in 
TIDZs.  
2.34.  There is no single law regulating foreign investment. Rather, the legal framework applicable 
to foreign investors is made up of various laws, including: the Constitution, the Trading Company 
Law, Securities Law, Profit Tax Law, Law on Takeovers, and the Law on Foreign Exchange. The 
Macedonian Constitution stipulates that foreign persons including legal entities should enjoy equal 
                                               
3 Ministry of Economy (2011). Adopted in 2011, the programme was prepared with the assistance of 
UNCTAD's Investment and Enterprise Di vision and the support of GIZ (Deuts che Gesellschaft für Internationale 
Zusamenarbeit). 
4 The Agency expanded its remit in 2010 under th e Law on establishing the Agency for Foreign 
Investment and Export pr omotion, OG No. 57/10. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 29 - 
 
  rights with local persons when conducting economic activities in the former Yugoslav Republic of 
Macedonia except where otherwise provided by the law. This principle covers the entire range of 
economic and legal forms used for business activity. 
2.35.  According to the Trading Company Law, foreign companies and foreign sole proprietors shall 
operate according to the terms and conditions stipulated by law and shall be given equal treatment 
in their operations with domestic natural persons and legal persons on the territory of the former 
Yugoslav Republic of Macedonia, unless otherwise stipulated by an international agreement and/or 
by law regulating special types of foreign companies and foreign sole proprietors with a specific 
scope of operations. 
2.36.  Regarding incentives, the country has a flat tax rate of 10% for corporate and personal 
income tax purposes, which is currently one of the lowest in the region. The Law on Technological 
Industrial Development Zones provides special tax treatment for any investor who will invest in 
the appointed zones. Generally, these incentives include: ten-year tax holiday from profit tax for entities performing their business activities in the zones; certain exemptions from VAT for trade 
within the zone and for imports and export in the zones; tax holiday from personal income tax on 
salaries for all workers employed by entities ca rrying out business activities in the zones for ten 
years from the month in which the first salary is paid. This law also provides for certain customs 
exemptions, exemption from fees for preparation of a construction site, and other incentives.  
2.37.  Regarding forms of FDI, the Law on Foreig n Exchange Operations defines direct investments 
as investments by an investor with the aim of establishing lasting economic links and/or realizing the right to manage a trade company or other legal entity in which the investor has invested. The 
law lists the following types of direct investment s: creation of a trade company or extending the 
equity of trade company in full ownership of the investor, establishing branches, or the acquisition 
of full ownership of the existing company; participation in a new or existing trade company if the 
investor holds or acquires more  than 10% of the participation in the equity of the trade company, 
i.e. more than 10% of the voting rights; long-term loan with a maturity period of five years or more, when it is a matter of a loan from the investor and it is intended for a trade company in his 
full ownership; long-term loan with a maturity period of five years or more, when it is a matter of 
a loan intended for establishing lasting economic links and if such loan has been granted between economically associated entities. 
2.38.  Under this Law, foreign investors may freely transfer profit, proceeds from disposal and sale 
of ownership shares in direct investments, and the remainder of a liquidated investment, provided 
that they have registered their direct investments according to this Law and have paid all legal obligations relating to taxes and contributions in the former Yugoslav Republic of Macedonia. 
2.39.  If a bilateral treaty signed and ratified  by the former Yugoslav Republic of Macedonia 
provides for more favourable investment terms and conditions for international investors, the citizens or legal entities of the respective cont racting country will enjoy preferential investor 
treatment. The former Yugoslav Republic of Mace donia is a party to 38 bilateral agreements for 
mutual protection and encouragement of foreign investment
5 as well as treaties with 32 countries 
for avoiding double taxation. The country is also a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. 
                                               
5 Seventeen are with EU member states and with states that are importan t investors, including 
Switzerland, Russia, China, India, and Turkey. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 30 - 
 
  3  TRADE POLICIES AND PRACTICES BY MEASURE 
3.1  Introduction 3.1.  In addition to making extensive trade- related commitments upon its WTO accession, the 
former Yugoslav Republic of Macedonia has oriented its trade and investment policies towards the 
goal of accession to the EU. It has made progress with adopting the acquis, in line with its 
candidate status, and has initiated new and amended legislation in several domains, including company registration, customs, government procurement, standards and SPS measures, 
competition policy, and intellectual property. The overall trade-related regulatory framework has 
improved significantly in recent years, and the Government is focusing on consolidating and effectively implementing the recently adopted and amended laws and regulations. 
3.2  Measures directly affecting imports 
3.2.1  Customs procedures 
3.2.  The main legislation regarding the customs regime includes the Law on Customs and related 
implementing regulations. In recent years, the Customs Administration has implemented 
numerous projects to modernize customs operations and strengthen administrative capacities. The 
development of the customs regime has been guid ed by the country's membership in the WTO and 
its EU candidate status. Among the administration's strategic objectives are the following 
priorities
1: development of the legal framework and harmonization with European legislation; 
efficient collection of import duties and other taxes, and implementation of trade measures; modernization of customs and strengthening of international cooperation; and protection of citizens and the fight against organized crime. 
3.3.  The trade liberalization schedules with th e EU and CEFTA partners and the maintenance of 
separate customs systems vis-à-vis  third partners have created significant differences in the 
structure and level of customs duties and non-tariff barriers within each country. The former 
Yugoslav Republic of Macedonia's status as a candidate for EU accession has required it to carry 
out an ambitious reform programme in customs. The Law on Customs Tariff was harmonized with the WCO Harmonized System and with the EU Combined Nomenclature. In its 2012 progress 
report, the EU Commission notes that the 2012 customs tariff was adopted in line with the latest 
changes in the EU Combined Nomenclature. Customs procedures are harmonized with the acquis  
except in the case of transit. Full harmonization with the acquis  would entail the adoption of the 
Convention on a Common Transit Procedure of the EU and EFTA; the process has started with the 
installation of the EU's New Computerised Transit System (NCTS).
2 
3.4.  The former Yugoslav Republic of Macedoni a has ratified the protocol amending the Kyoto 
International Convention on the Simplification and Harmonization of Customs Procedures and is 
engaged in full implementation of the Action Plan of the revised Kyoto Convention on the 
Simplification and Harmonization of Customs Procedures. It has abolished a number of customs-related fees but some restrictions still exist in the form of export licences for certain products. 
Measures to protect domestic production in case of significant increases in imported goods, 
dumping prices, and subsidized import prices have  so far not been imposed. They may be applied 
following an investigation by the Commission on Protective Measures in accordance with the Law on Trade and relevant regulations on the procedure and method of determining contingency 
measures. 
3.5.  The Customs Administration has implemented a range of measures to make importing and 
exporting faster and more efficient. Around a decade ago, it introduced a risk-based inspection 
system to minimize the time required to proces s customs declarations and to reduce unnecessary 
delays in customs terminals. Customs operates the ASYCUDA computerized declaration clearance system and it is used by internal and external users (declarants as well as audit and inspection 
authorities). The system provides for the application of valid customs procedures, tariffs, and 
                                               
1 Customs Administration (2012). 
2 Overall, the Commission report notes that there has been progress on administrative and operational 
capacity and that preparations in the area of custom s union are "well on track". See: European Commission 
(2012). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 31 - 
 
  legislation required for undertaking customs procedures, including the introduction of guidelines 
for risk management in customs controls. 
3.6.  Customs is implementing a web-based bord er control risk-management system, to replace 
paper-based data management, focusing on technical requirements for publishing risk indicators 
and profiles on an intranet, in order to improv e border risk management and reduce physical 
control. By using risk profiling, risk-based inspection systems reduce the need for physical inspections of cargo and allow most traders to get their goods cleared more quickly. After 
analysing potential risk factors, these systems direct containers through a red channel (for 
physical inspection), yellow channel (inspection of documents only) or green channel (no additional inspections). Since 2009, Macedonian Customs has also used a blue channel allowing goods to be released from customs without inspection and instead to undergo post-clearance 
control. The Customs authorities say that imports through the yellow channel are cleared in 101 
minutes and exports in 63 minutes on average. 
3.7.  Customs clearance of cargo, conducted inla nd after commercial and fiscal checks, begins with 
the lodging of the customs declaration. The declaration may be submitted in SAD format 
electronically or manually. The documents requir ed for the identification of goods and the 
necessary import licences are submitted with the customs declaration, following regular or 
simplified procedures (procedures usually carried  out by Customs are performed by the importer, 
with the necessary approval). Before accepting the import declaration, a risk assessment is carried 
out to determine the level of control and choice of channel. 
3.8.  In 2008, the Customs Administration introduc ed an electronic single-window system (Single 
Window for Export/Import Licences and Quotas or EXIM) for issuing licences required for customs 
procedures. This system links 16 state agencies and allows traders to submit customs documents online for import, export, and transit. The EXIM system, which is available 24 hours a day, allows 
economic operators to electronically apply for and receive all documents required for import and 
export licences and tariff quotas. The quotas are granted in accordance with a first come, first served principle. The system also allows for the electronic tracking of payment of administrative 
taxes and other fees. According to the authoritie s, the system has decreased import and export 
costs and significantly eased and hastened the pr ocess to obtain approvals or quotas. Of the 
34,855 licence applications submitted in 2009 (the first full year of EXIM's operation), 69% were submitted electronically compared with 87% of the 52,211 applications in 2010. In 2012, 
electronic applications accounted for 99% of th e more than 71,000 licences issued through EXIM.  
3.9.  The institutions involved in EXIM recognize that there is potential for further refinement and 
simplification of procedures. In the next phase, th e system is scheduled to be integrated into the 
Veterinary IT-System, Transport IT-System an d the new Customs Data Processing System 
(CDPS), which includes other required import/export certificates and allows for paperless submission of customs documents under CDPS. The CDPS will constitute a basis for EU 
compatibility and interconnectivity. 
3.2.2  Customs valuation and Pre-shipment inspection (PSI) 3.10.  Determination of customs value is in accordance with Articles 28 to 39 of the Law on 
Customs and the Regulation on Customs Valuation. The country's legislation stipulates the 
transaction value as the principal method of customs valuation, and incorporates the hierarchy of 
alternative methods of valuation as laid down in the Customs Valuation Agreement. The transaction method, is based on the price actually paid or payable for the goods when sold for 
export to the former Yugoslav Republic of Macedo nia. Certain adjustments to this price might be 
necessary. If the customs value cannot be established based on the transaction value method, it is established on the next possible valuation methods respecting the order of application. The Law on 
Customs explicitly prohibits the use of minimum import values. The authorities confirm that 
minimum import values, any form of reference price or fixed valuation schedule for the valuation of imports are not used in determining import value for customs purposes. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 32 - 
 
  3.11.  The Customs authorities provide importers with advance notice in cases where the 
importer's declared value may be rejected and, if requested, a written explanation of the grounds for doubt. A reasonable opportunity for response is provided prior to final determination. The right of importers and other interested parties to appeal customs rulings to the judicial authorities is 
regulated by the Constitution, the Law on General Administrative Procedure, and the Law on 
Customs. 
3.12.  The former Yugoslav Republic of Macedonia does not have laws or regulations relating to 
pre-shipment inspection (PSI) and does not use PSI services.  
3.2.3  Rules of origin 3.13.  The former Yugoslav Republic of Macedonia applies non-preferential and preferential rules of 
origin. At the time of WTO accession, the country of  origin of goods was determined in accordance 
with the Law on Customs, the Decision on the Manner of Determining Origin, and the protocols on 
rules of origin relating to the free-trade agreemen ts signed by the former Yugoslav Republic of 
Macedonia. Proof of origin was only required for goods imported under preferential schemes. 
Under the non-preferential rules, origin is assigned to the country where the product was wholly 
obtained or where it underwent its last substantial processing. 
3.14.  A Euro-Mediterranean Convention on prefer ential rules of origin, authorized by the EU 
Council in March 2012
3, provides a single set of preferential rules of origin among the countries or 
territories of the Euro-Mediterranean zone. It replac es the system of Euro-Med cumulation of origin 
based on 60 individual protocols applicable between two partner countries, and offers the opportunity to integrate the participants (including  the former Yugoslav Republic of Macedonia) in 
the EU's SAA process, into the pan-Euro-Med system of cumulation of origin. 
3.2.4  Tariffs 3.15.  Imported goods may be subject to custom s duties, excise duties, and value-added tax. 
According to the authorities, there are no other charges on imports. As  a share of total tax 
revenue, customs duties declined steadily from 9.4% in 2006 to 7.7% in 2009 and to 5.7% in 2012, reflecting the trend in trade liberalizatio n and tariff reduction. Although revenue from 
customs duties has been in decline, trade-related taxes (customs duties + VAT on imports + 
excise duty on imports) overall accounted for 58%  and 68.9% of the country's total tax revenue in 
2006 and 2012 respectively, due to the growing import ance of VAT and excise duties on imports. 
3.16.  The tariff  comprises 9,629 lines, and the applicable tariff, which entered into force on 
1 January 2013, is based on the EU Combined Nomenclature (CN) and on the international 
Harmonized System (HS). Classification of good s determines the rate of duty applicable to 
imported goods and whether any preferential treatment is available. Customs duties are mainly 
charged on the c.i.f. customs value of the goods (almost 97% of total lines are ad valorem ), 
although a number of agricultural products are also liable to specific duties assessed on weight or quantity. Of these, 2 tariff lines are subject to co mpound duties and 310 lines (3.2% of total tariff 
lines) are subject to mixed duties (Appendix Table A3.1). VAT is also charged at importation, and 
may be recovered as input tax provided that: (i) the importer is registered for VAT purposes in the former Yugoslav Republic of Macedonia (ii) the g oods are used in the line of his business activities 
(iii) the importer has a proper import customs declaration issued in his name and has properly 
recorded it in his books and (iv) the VAT is paid. 
                                               
3 On 26 February 2013, the Official Journal  published the Council Deci sion of 26 March 2012 on the 
conclusion of the Regional Convention on pan-Euro-Medit erranean preferential rules of origin (2013/94/EU) as 
well as the text of the regional convention. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 33 - 
 
  MFN applied tariff structure 
3.17.  Since its accession to the WTO, the former  Yugoslav Republic of Macedonia has reduced its 
applied MFN tariff. The simple average MFN tariff declined from 11.1% in 2004 to 8.5% in 2013. While average tariffs are low, dispersion of rates is relatively high, ranging from zero to 70%. 
(Tables 3.1 and 3.2, and Chart 3.1). Prepared  foods, footwear and headgear, arms and 
ammunition, and vegetable products, have average ta riff rates above or well above the average of 
8.5% (Chart 3.1). All non-preferential partners are subject to MFN treatment. 
Table 3.1 Structure of MFN tariffs 2013 
(%) 
  MFN applied  
  2004a 2013b Final 
boundb 
1. Bound tariff lines (% of all tariff lines) 100.0 100.0 100.0 
2. Simple average tariff rate 11.1 8.5 8.5 
 Agricultural products (WTO definition) 20.2 17.4 17.5 
 Non-agricultural products (WTO definition) 8.7 5.9 6.2 
 Agriculture, hunting,  forestry and fishing (ISIC 1) 12.4 10.7 11.1 
 Mining and quarrying (ISIC 2) 4.5 3.3 3.7 
 Manufacturing (ISIC 3) 11.1 8.4 8.4 
3. Duty-free tariff lines (% of all tariff lines) 23.3 40.0 36.8 
4. Simple average rate of dutiable lines only 14.5 14.1 13.5 
5. Tariff quotas (% of all tariff lines) 0.0 0.0 0.0 c 
6. Non- ad valorem  tariffs (% of all ta riff lines) 3.1 3.2 3.0 
7. Non-ad valorem  tariffs with no AVEs (% of all tariff lines) 0.9 1.0 1.2 
8. Domestic tariff peak s (% of all tariff lines)d 6.3 6.3 n.a. 
9. International tariff peaks (% of all tariff lines)e 26.0 16.3 n.a. 
10. Overall standard deviation of applied rates 12.1 11.0 n.a. 
11. Nuisance applied rates (% of all tariff lines)f 5.4 1.5 n.a. 
 
n.a. Not applicable. 
 
a Ad valorem equivalents (AVEs)  were estimated based on 2004 import data at the 10-digit tariff. 
 If no import data were available for 2004, 2003 import data were used in calculations.  In case of unavailability, the ad valorem  part is used for compound and alternate rates. 
b Ad valorem equivalents (AVEs)  were estimated based on 2012 import data at the 10-digit tariff. 
 If no import data were available for 2012, 2011 import data were used in calculations.  In case of unavailability, the ad valorem  part is used for compound and alternate rates. 
C The former Yugoslav Republic of Macedonia maintains a tariff quota on wheat and meslin (HS 1001909900) 
in accordance with the commitments undertaken in the Protocol of Accession. 
d Domestic tariff peaks are defined as those exceeding three times the overall simple average applied  rate. e International tariff peaks are defined as those exceeding 15%. f Nuisance rates are those greater than zero, but less than or equal to 2%.  Note: All tariff calculations exclude in-quota lines. The 2004 tariff is based on HS02 nomenclature consisting of 
10,360 tariff lines (at 10-digit tariff line level). The 2013 tariff is based on HS12 nomenclature consisting of 9,629 tariff lines (at 10-digit tariff line level). 
 Source: WTO Secretariat calculations, based on tariff and trade information provided by the authorities,  and 
WTO CTS database. 
3.18.  Using the WTO definition, MFN applied tariffs average 17.4% on agricultural products and 
5.9% on non-agricultural goods. The number of duty-free lines increased from 23.3% of all tariff 
lines in 2004 to 40% in 2013. The most frequent rate is now zero (Chart 3.2). In aggregate, the applied MFN tariff displays mixed escalation: negative  from first-stage of processing (average tariff 
rate of 8%) to semi-finished products (3.7%), and positive from the latter to finished goods 
(11%). Upon its eventual accession to the EU, th e former Yugoslav Republic of Macedonia will 
have to adopt the EU common external tariff and its bound rates. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 34 - 
 
  Chart 3.1 Average applied MFN tariff rates, by HS section, 2004 and 2013 
 
 
051015202530
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
01   Live animals & products  
02   Vegetable products03   Fats & oils      
04   Prepared food, etc.
05   Mineral products06   Chemicals & products07   Plastic & rubber
08   Hides & skins09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.15   Base metals & products
16   Machinery
17   Transport equipment18   Precision instrument19   Arms & ammunition
20   Miscellaneous manufacturing21   Works of art, etc.Average 2004
(11.1%)Average 2013
(8.5%)MFN 2004 MFN 2013
 
Note:  Calculations include estimated AVEs for non- ad valorem  tariffs. 
 Source: WTO Secretariat calculations, based on data provided by the authorities. 
Table 3.2 Applied MFN tariff summary, 2013 
 
Number  
of lines Simple 
average 
(%) Tariff 
range 
(%) Standard 
deviation Share of 
duty-free 
lines (%) Share of 
non- ad 
valorem  
tariffs (%)  
Total 9,629 8.5 0-70 11.0 40.0 3.2 
HS 01-24 2,540 15.1 0-70 16.5 35.4 12.3 
HS 25-97 7,089 6.1 0-25 6.6 41.7 0.0 
By WTO category       
WTO agricultural 
products 2,165 17.4 0-70 16.6 25.1 13.7 
Animals and products 
thereof 360 14.7 0-66 9.9 10.0 18.6 
Dairy products 154 18.4 0-53.1 10.7 0.7 30.5 
Fruit, vegetables, and 
plants 553 22.0 0-65 15.1 12.1 4.9 
Coffee, tea, and cocoa and 
cocoa preparations 47 18.1 0-34.9 9.2 10.6 23.4 
Cereals and preparations 240 19.1 0-63 14.9 10.8 14.2 
Oils seeds, fats, oil and 
their products 174 2.4 0-40 6.2 75.3 4.6 
Sugars and confectionary 44 10.4 0-30 9.7 18.2 20.5 
Beverages, spirits and 
tobacco 326 31.6 0-70 21.8 24.2 27.9 
Cotton 6 0.0 0-0 0.0 100.0 0.0 
Other agricultural 
products, n.e.s. 261 2.7 0-45 6.5 70.5 0.8 
WTO non-agricultural 
products 7,464 5.9 0-62 6.8 44.3 0.2 
Fish and fishery products 494 1.8 0-62 7.1 91.7 3.2 
Minerals and metals 1,462 5.1 0-23 6.4 49.3 0.0 
Chemicals and 
photographic supplies 1,284 3.0 0-25 3.3 44.4 0.0 
Wood, pulp, paper and 
furniture 433 2.6 0-18 5.0 77.1 0.0 WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 35 - 
 
   
Number  
of lines Simple 
average 
(%) Tariff 
range 
(%) Standard 
deviation Share of 
duty-free 
lines (%) Share of 
non- ad 
valorem  
tariffs (%)  
Textiles 850 8.1 0-25 5.5 25.1 0.0 
Clothing 341 17.5 17.5 0.0 0.0 0.0 
Leather, rubber, footwear 
and travel goods 275 12.6 0-25 8.8 15.3 0.0 
Non-electric machinery 906 4.4 0-16 5.8 54.6 0.0 
Electric machinery 459 8.0 0-25 6.5 32.0 0.0 
Transport equipment 264 6.6 0-20 5.7 24.2 0.0 
Non-agricultural products, 
n.e.s. 646 6.3 0-25 6.5 41.3 0.0 
Petroleum 50 15.3 0-20 6.4 6.0 0.0 
By ISIC sectora       
ISIC 1 - Agriculture, 
hunting and fishing 671 10.7 0-66 15.9 53.1 7.6 
ISIC 2 - Mining and 
quarrying 116 3.3 0-15 5.2 58.6 0.0 
ISIC 3 - Manufacturing 8,841 8.4 0-70 10.5 38.8 3.0 
By stage of processing       
First stage of processing 1,233 8.0 0-66 13.5 58.0 4.5 
Semi-processed products 2,789 3.7 0-52 5.4 54.3 0.1 
Fully processe d products 5,607 11.0 0-70 11.6 29.0 4.5 
 
a International Standard Industrial Classification (Rev.2). Electricity, gas and water are excluded (one tariff 
line). 
 Note: All tariff calculations exclude in-quota lines. The 2013 tariff is based on HS12 nomenclature consisting of 
9,629 tariff lines (at 10-digit tariff line level). Ad valorem  equivalents (AVEs) were estimated based on 
2012 import data at the 10-digit tariff. If no import data were available for 2012, 2011 import data were 
used in calculations. In case of unavailability, the ad valorem  part is used for compound and alternate 
rates. 
Source: WTO Secretariat calculations, based on tariff information provided by the authorities. 
Chart 3.2 Breakdown of applied MFN tariffs, 2013 
(40.0)
(29.6)
(22.2)
(4.0)(1.5) (2.2)(0.5)
0102030405060708090100
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
Duty-free 0-10 >10-20 >20-30 >30-40 >40-50 >50Number of tariff lines Per centNumber of lines 
Cumulated percentage (right-hand scale)
 
Note: Figures in parentheses indicate the share of total lines.  Calculations exclude in-quota rates. 
 
Source: WTO Secretariat calculations, based on tariff information provided by the authorities. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 36 - 
 
  MFN bound tariffs 
3.19.  Upon its accession to the WTO, the former  Yugoslav Republic of Macedonia bound 79.4% of 
its tariff lines in 2003, increasing to 100% by 2012 at a simple average rate of 8.5%. With acceptance of the Information Technology Agreement, the Chemical Harmonization Programme, 
and the Agreement on Trade in Civil Aircraft, among other sectoral tariff harmonization 
agreements, thousands of tariff lines were eventually bound at zero (Tables 3.3 and 3.4). Agricultural products are bound at 17.5%  and industrial products at 6.2%.  
Table 3.3 Binding of tariff lines, 2003-12 
(%) 
End of 
implementation year No. of tariff lines 
implemented Cumulative 
  No. of lines % 
2003-2005 8,393 8,393 79.4 
2006 57 8,450 80.0 
2007 1,682 10,132 95.9 
2010 399 10,531 99.7 
2012 36 10,567 100.0 
Source: WTO Secretariat calculations, based on CTS database. 
Table 3.4 MFN bound tariffs 
(%) 
  Final bound 
1. Bound tariff lines (% of all tariff lines) 100.0 
2. Simple average tariff ratea 8.5 
3. Agricultural products  (WTO definition) 17.5 
4. Non-agricultural products (WTO definition) 6.2 
5. Duty-free tariff lines (%  of all tariff lines) 36.8 
6. Non-ad valorem tariffs (% of all tariff lines) 3.0 
 
a Ad valorem  equivalents (AVEs) were estimated based on 2012 import data at the 10-digit tariff. If 
no import data were available for 2012, 2011 import  data were used in calculations. In case  of 
unavailability, the ad valorem  part is used for compou nd and alternate rates. 
 Note: All tariff calculations exclude in-quota lines. Based on HS02 nomenclature consisting of 10,567 tariff 
lines (at 10-digit tariff line level). 
 Source: WTO Secretariat calculations, based on CTS database. 
Tariff preferences 
3.20.  The former Yugoslav Republic of Macedo nia has preferential trading agreements with 
40 partners: the EU-28, the other six parties of CE FTA 2006, the four EFTA states, and Turkey and 
Ukraine. In 2012, trade under these preferential agreements represented almost 90% of exports 
and 77% of imports. On the import side, non-agri cultural products (WTO definition) are generally 
granted duty-free treatment, and agricultural prod ucts are mainly duty free (for CEFTA countries) 
or carry reduced rates of duty (for the EU and EFTA). The average prefer ential tariff on all 
products under these agreements ranges from ze r o  ( w i t h  C E F T A )  t o  4 %  ( w i t h  T u r k e y  a n d  t h e  
Ukraine) (Table 3.5).  
3.21.  At the time of accession, the authorities no ted that tariff quotas were used to regulate 
market access for certain agricultural products an d foodstuffs, some of which were allocated on a 
first come, first served basis. Tariff quotas are significant in imports from Croatia (accounting for 
over 17% of total imports in 2012) and to a lesser extent in trade with Moldova (Appendix Table A3.2).  
3.22.  The former Yugoslav Republic of Macedo nia implements preferential tariff quotas in 
agricultural products according to the provisions  of its free-trade agreements and a WTO tariff WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 37 - 
 
  quota on wheat. Allocation of tariff quotas is on a first-come, first served basis; applications are 
submitted via the EXIM system to the Customs Ad ministration. The former Yugoslav Republic of 
Macedonia does not apply preferential tariff quotas to non-agricultural products.  
Table 3.5 Applied MFN and preferential simple average tariffs, 2013 
 MFN EU EFTA  CEFTAa Croatia  Moldova Turkey Ukraine  
Duty-free lines (% of total lines) 40.0 90.6  83.8 100.0  98.4 98.9 83.0 82.9  
Duty rates > 15% (% of total 
lines) 16.3 7.7 8.9 0.0 0.8 1.1 10.0 10.0 
  
 Average rates (%)  
Total 8.5 2.9  3.7 0.0 0.2 0.5 4.0 4.0  
HS 01-24 15.1 11.0 14.1 0.0 0.9 2.0 15.1 15.1 
HS 25-97 6.1 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
By WTO category         
WTO agricultural products 17.4 12.6  16.5 0.0 1.1 2.3 17.4 17.4  
Animals and products thereof 14.7 6.2 14.7 0.0 1.9 0.0 14.7 14.7 
Dairy products 18.4 13.1  17.6 0.0 3.2 0.0 18.4 18.4  
Fruit, vegetables, and plants 22.0 16.7 21.4 0.0 0.0 0.0 22.0 22.0 
Coffee, tea, and cocoa and cocoa 
preparations 18.1 5.0  9.1 0.0 0.0 0.0 18.1 18.1  
Cereals and preparations 19.1 13.1 15.9 0.0 0.8 0.1 19.1 19.1 
Oils seeds, fats, oil and their 
products 2.4 1.2  2.2 0.0 0.2 0.0 2.2 2.2  
Sugars and confectionary 10.4 7.0 8.0 0.0 0.3 0.0 10.4 10.4 
Beverages, spirits and tobacco  31.6 30.0  31.3 2.6 2.6 15.4 31.6 31.6  
Cotton 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Other agricultural products, n.e.s. 2.7 0.5  2.5 0.0 0.0 0.0 2.5 2.5  
WTO non-agricultural products 5.9 0.1 0.0 0.0 0.0 0.0 0.1 0.1 
Fish and fishery products 1.8 1.3  0.1 0.0 0.0 0.0 1.8 1.8  
Minerals and metals 5.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Chemicals and photographic 
supplies 3.0 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
Wood, pulp, paper and furniture  2.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Textiles 8.1 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
Clothing 17.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Leather, rubber, footwear and travel 
goods 12.6 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
Non-electric machinery 4.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Electric machinery 8.0 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
Transport equipment 6.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Non-agricultural products, n.e.s. 6.3 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
Petroleum 15.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
By ISIC sectorb         
ISIC 1 - Agriculture, hunting and 
fishing 10.7 7.2 10.0 0.0 0.3 0.0 10.6 10.6 
ISIC 2 - Mining and quarrying  3.3 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
ISIC 3 - Manufacturing 8.4 2.6 3.3 0.0 0.2 0.6 3.5 3.6 
By stage of processing         
First stage of processing 8.0 5.1 6.6 0.0 0.2 0.0 7.3 7.4 
Semi-processed products 3.7 0.2  0.6 0.0 0.0 0.0 0.6 0.6  
Fully processed products 11.0 3.7 4.6 0.0 0.4 0.9 4.9 4.9 
 
a CEFTA members included are: refers to Albania, Bo snia and Herzegovina, Montenegro, Serbia, and Kosovo. 
b International Standard Industrial Classification (Rev.2). Electricity, gas and water are excluded (1 tariff 
line). 
Note: All tariff calculations exclude in-quota lines. The 2013 tariff is based on HS12 nomenclature consisting of 
9,629 tariff lines (at 10-digit tariff line level). Ad valorem  equivalents (AVEs) were estimated based on 
2012 import data at the 10-digit tariff. If no import data were available for 2012, 2011 import data were 
used in calculations. In case of unavailability, the ad valorem  part is used for compound and alternate 
rates. 
Source: WTO Secretariat calculations, based on tariff information provided by the authorities.  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 38 - 
 
  3.2.5  Other duties and taxes 
3.23.  The VAT system partially follows the EU system.4 Supplies of goods or services whose place 
of supply is in the former Yugoslav Republic of Macedonia and the import of goods into the country 
are generally subject to VAT. The general VAT rate is 18%; a preferential rate of 5% applies to a 
number of goods and services including food for human consumption, pharmaceuticals, and 
publications. On imports, VAT is payable by the importer to the customs authorities. It is calculated by the customs authorities conducting the customs clearance procedure. Exports of 
goods, as well as services related to the exports (e.g. international transportation) are zero rated 
for VAT. Exporters may claim a refund of the VAT paid on their inputs. 
3.24.  VAT is applied equally to imported and domestically produced items, and exemptions from 
VAT apply to both domestic and imported goods and services. VAT is assessed on the total price, 
inclusive of excise tax where applicable. Appeal procedures for VAT and excise tax decisions are 
identical and governed by the Law on Procedure. 
3.25.  Excise taxes are levied on products listed in the Law on Excise Taxes, and include petroleum 
products, tobacco products, alcohol and alcoholic beverages, and passenger vehicles (Table 3.6). 
Excise duties may be determined as a percentage (proportional excise duty), in absolute amounts 
per unit (specific excise duty) or as a combination of both. Excise duties were administered by the 
Public Revenue Office until 2010, when responsibility was transferred to the Customs 
Administration. Excise tax rates are identical for imported and domestically produced goods. The authorities confirm that excise taxes on tobacco products are in conformity with GATT Article III requirements. 
Table 3.6 Excise duties, 2013 
Products Excise rates 
Mineral oils  
Motor fuel:  
- with lead content higher than 0.013 g/l 24.396 MDen/litre 
- unleaded petrol with lead content up to 0.013 g/l 21.692 MDen/litre 
Gas oil:  
- as engine fuel 12.121 MDen/litre 
- as heating fuel 3.136 MDen/litre 
Liquid oil gas:  
- as engine fuel 4.900 MDen/litre 
- as heating fuel 4.876 MDen/litre 
Kerosene:  
- as engine fuel 9.000 MDen/litre 
- as heating fuel 1.800 MDen/litre 
Stoking oil 0.100 MDen/kg 
Lubricants:  
- Mineral oils 7 MDen/kg 
- preparations 22 MDen/kg 
Alcohol and alcohol drinks  
Beer MDen 4 per litre/degree of alcohol or MDen 1.65 per 
litre/degree extract 
Sparkling beer 0 MDen/litre 
Wine 0 MDen/litre 
Other sparkling beverages 0 MDen/litre 
Other non-sparkling beverages 0 MDen/litre 
Semi-finished products 340 MDen/litre 
Ethyl alcohol 340 MDen/litre 
Tobacco goods  
Cigars and cigarillos 21.37 MDen/per piece + 0% of retail price 
                                               
4 According to the latest Commission report, legislation on VAT and excise is only partially aligned with 
the acquis as some excise rates remain lower than the minimum required by the acquis.  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 39 - 
 
  Products Excise rates 
Cigarettes 1.30 MDen/per piece + 9% of retail price 
1.50 MDen/per piece (minimum excise) 
Smoking tobacco, being finely chopped tobacco 1,500 MDen per kg + 0% of retail price 
Smoking tobacco, being other tobacco 1,350 MDen per kg + 0% of retail price 
Passenger vehicles (depending on the value expressed in euros) 
0 - 3000 0.0% 
3001 - 4000 0.5% 
4001 - 5000 1.0% 
5001 - 6000 1.5% 
6001 - 8500 2.0% 
8501 - 12000 3.0% 
12001 - 14000 4.0% 
14001 - 16000 6.0% 
16001 - 18000 9.0% 
18001 - 22000 11.5% 
22001 - 25000 13.5% 
25001 - 30000 15.5% 
> 30001 18.0% 
Source: Information provided by the authorities. 
3.26.  A number of other fees or charges are levi ed by Customs for import/export-related services 
rendered. These include customs control of goods at particular locations or during non-working 
hours, certain laboratory testing and sampling, and notification of outstanding customs debt. 
3.27.  Under the Law on Environment, compensation  for import permits is paid on used products 
(such as tyres) and ozone-depleting substances . The authorities maintain that the level of 
compensation set for used products is to cover the costs of issuing an import permit and ensure 
adequate removal of the waste, while for ozone-depleting substances the compensation is intended to provide for gradual reduction of the substances in accordance with the obligations of the Montreal Protocol. Some of the funds collected are used under the annual programme for 
environmental investments. 
3.28.  Until June 2013, fees were levied on tobacco/tobacco products according to the Law on 
Health Protection, the Law on Environment an d the Law on Tobacco and Tobacco Products. 
Amendments to the Law on Excises have resulted in an increase in excise taxes on 
tobacco/tobacco products with further increases programmed in order to better align excise taxes with the EU acquis. Under the law on Compulsory Reserves of Oil and Oil Derivatives, fees are paid 
by producers and importers of oil derivatives; the revenue from these fees is the main source of 
funding of the Directorate of Compulsory Reserves of Oil and Oil Derivatives. A number of fees or 
charges have been abolished or modified since accession, including an export promotion fee of 0.1% charged on imports and exports, which expired in 2005. 
3.2.6  Import prohibitions, restrictions and licensing 
3.29.  Upon its accession to the WTO the former Yugoslav Republic of Macedonia undertook to 
eliminate and not reintroduce or apply quantitative restrictions on imports, or other non-tariff 
measures such as licensing, quotas, bans, permits, prior authorization requirements, licensing 
requirements, and other restrictions having equiva lent effect, that cannot be justified under WTO 
rules. The authorities maintain that the current import licensing regime is in full compliance with 
WTO rules. 
3.30.  The importation of some products (e.g. certain animals and birds, plants, fertilizers, 
narcotics, arms and ozone depleting substances) is  prohibited for reasons of the protection of 
health, the environment, public security and morals, and cultural heritage or the fulfilment of 
obligations under international conventions. According to the authorities, temporary import 
prohibitions are in line with relevant EU legislation.  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 40 - 
 
  3.31.  The import licensing system is regulated by  the Decision on Classification of Goods into 
Forms of Export and Import pursuant to the Law on Trade (and adopted in 2013).5 Imports of 
products stipulated in the Decision are subject to non-automatic licensing. The system applies to goods coming from all countries. The licences and other relevant documents for import/export are 
issued by the competent ministries/authorities (Table  3.7). In nearly all cases, import licensing is 
implemented pursuant to Article XX of GATT 1994 and in the case of the Interior Ministry, Article 
XXI; the Bureau of Metrology implemented certain licences for the purpose of consumer safety in 
accordance with the TBT Agreement until 2010 (removed in 2011). Product coverage is defined in 
the Decision and is not subject to administrative discretion. The system cannot be abolished without legislative approval. 
3.32.  The authorities maintain that the import licensing system is not intended to restrict the 
quantity or value of imports but is used to protect human, animal or plant life or health, to protect 
the environment from ozone-depleting substances, and ensure national-security interests. There 
are no restrictions as to the value or quantity of imports and there is no quantitative limit on 
importation of a product from a particular country. There is a licensing administrative charge of 
MDen 600 for administrative expenses pursuant to the Law on Administrative Fees; no deposit or advance payment is required for licensing. 
Table 3.7 Main products subject to import licensing 
Ministry/agency issuing licence Product 
Ministry of Health  
Food and Veterinary Agency Food, live animals, veterinary and medical 
preparations, products of an imal origin, products for 
feeding animals, medicines, medical aids, narcotics, psychotropic substances an d precursors, as well as 
other chemicals  
Agriculture, forestry and water management Products for plant protecti on, seed and propagating 
material, reproductive material of forest trees, logs, 
firewood, and other products of tree, as well as nets 
for commercial fishing 
 
  
Radiation safety directorate Radioactive materials and ot her specific related goods 
 
Environment Chemical products, waste materials, molybdenum ore 
and minerals, endangered an d protected wild plants, 
animals, and fungi, as well  as the import of second-
hand technical goods that contain cooling devices, and second-hand tyres  
Economy Gold, metal coins, banknotes, and other goods 
Culture Goods considered as cultur al heritage and protected 
cultural goods  
Interior Weapons, ammunition and explosives, and other 
goods 
 
National Bank of the Republic of Macedonia Monetary gold 
 
Source:  Customs Administration. 
3.33.  As noted above, there is a one-stop shop system - EXIM - for import, export licence, and 
licences for transits. A special internet portal administered by the Customs Administration 
(http://www.exim.gov.mk/ ) enables economic operators to request and obtain import and export 
licences and tariff quotas from the relevant government institutions. A licence is valid for six 
months from the date of issue and there is no penalty for non-utilization of a licence. Applications to import agricultural products that are subject to tariff quotas under preferential trade 
agreements are submitted to Customs. The EXIM system enables importers to submit 
                                               
5 See WTO document G/LIC/N/3/MKD/1, 17 April 2009: Replies to Questionnaire on Import Licensing 
Procedures. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 41 - 
 
  electronically  their applications for tariff quotas. The tariff quotas are distributed on a first come, 
first served basis by the EXIM system. 
3.2.7  Contingency trade measures 3.34.  Contingency trade measures are regulated under the Law on Trade. Since its accession to 
the WTO, the former Yugoslav Republic of Macedonia has neither imposed nor initiated any anti-
dumping, countervailing or safeguard measures. Following the initiation of an investigation in November 2006, a definitive anti-dumping duty  was imposed by the EU in February 2008 on 
imports of ferro-silicon originating, inter alia,  in the former Yugoslav Republic of Macedonia, thus 
confirming the provisional measure imposed since August 2007.
6 
3.35.  At the time of accession to the WTO, the Government initiated a review of the foreign trade 
law, including considering the feasibility of and need for more detailed legislation on anti-dumping, 
countervailing, and safeguard measures. In 2004, th e Government notified the WTO that it did not 
have laws or regulations with respect to anti-dumping.7 The Law on Trade was subsequently 
amended to make it consistent with the Anti-Dumping Agreement8, and an implementing 
regulation (Decision on Procedure and the Me thod of Determining Anti-Dumping Duty) was 
promulgated in 2007.9 
3.36.  The Commission on Protective Measures (CPM), established in accordance with Article 35 of 
the Law on trade, is the competent authority to take a decision on the initiation of an investigation 
into dumping and is in charge of determining injury. The Commission is appointed by the Government based on proposals by the Minister of Economy. According to the authorities, the 
Government may impose anti-dumping duties when a product is imported at a price less than its 
normal value and, if pursuant to an investigation initiated and conducted by the Commission, it is 
determined that such import causes or threatens to cause material injury to domestic production or material retardation of the establishment of domestic production. A written claim of dumping 
may be submitted by any natural or legal person or trade association acting on behalf of the 
domestic industry. 
3.37.  Countervailing measures and safeguards are also regulated by the Law on Trade and by the 
relevant implementing decisions.
10 Based on a proposal by the Commission on Protective 
Measures, the Government may impose a countervailing duty on imported products when, pursuant to an investigation, it is determined that the product is subsidized, that there is injury to the domestic industry, and there is a causal link  between subsidy and injury. Safeguard measures 
may be applied following a CPM investigation if it determines that a product is being imported in 
such increased quantities, absolute or relative to domestic production, and under such conditions a s  t o  c a u s e  o r  t h r e a t e n  t o  c a u s e  i n j u r y  t o  t h e  d o m e s t i c  i n d u s t r y  t h a t  p r o d u c e s  l i k e  o r  d i r e c t l y  
competitive products.  
3.2.8  Government procurement 3.38.  During the review period, the value of government procurement increased from an 
estimated 6% of GDP (in 2006) to 12% of GDP (in 2012). According to the authorities, it was the 
equivalent of 13% of GDP in 2011, and the 23,862 public contracts were concluded as follows:  
46.6% of contracts were awarded by applying a simplified competitive tender procedure without 
prior publication of notice; 28.4% by applying open tender procedure; 15.2% were awarded by 
applying a simplified procedure with prior publ ication of notice; the rest were awarded by 
restricted tendering or by a negotiated procedure with or without prior publication of notice. Participation by foreign companies in the contract award procedures in 2011 accounted for 14% of 
contracts.  
                                               
6 Council Regulation (EC) No. 172/2008. In March 2012,  the European Commission initiated an anti-
dumping investigation concerning imports of welded tubes, pipes, and hollow profiles of iron originating, inter alia, in the former Yugoslav Republic of Macedonia. Th e case was terminated by the withdrawal of the 
complaint of the EU welded steel tubes industry in November 2012. 
7 WTO document G/ADP/N/1MKD/1, 28 September 2004. 
8 WTO document G/ADP/N/1/MKD/ 2/Suppl.1, 1 August 2008.  
9 WTO document G/ADP/N/1/MKD/2, 2 November 2007. 
10 Decision on Procedure and the Method of Determin ing Countervailing Duty, no tified in WTO document 
G/SCM/N/1/MKD/1Suppl.1, 28 September 2005; and Decision on procedure and the Method of determining Measures against Increased Imports, notified in WTO document G/SG/N/1/MKD/1Suppl.1, 28 June 2005. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 42 - 
 
  3.39.  Consistent with EU requirements, Parliament approved a new public procurement law in 
2007, which covers both national and local go vernment procurement, and the Government 
established an independent appeals commission and independent Public Procurement Bureau (PPB) ( http://www.bjn.gov.mk/ ) under the Ministry of Finance. It functions as a central 
government authority, monitoring the implementation of the law and providing guidelines for 
improving the system. 
3.40.  The scope of public procurement is set out in the law and divided into three areas: 
execution of works; delivery of supplies; and provision of services. Regarding thresholds, the 
contracting authority may use a simplified competitive procedure without publishing a notice if the estimated value of the public contract, excluding VAT, is below €5,000 in MDen equivalent, or by publishing a notice if the estimated value of the public contract is below €20,000 in MDen 
equivalent for public supply and services contracts and €50,000 in MDen equivalent for public 
works contracts. If the estimated value of the contract, excluding VAT, exceeds €500,000 in MDen 
equivalent for supplies and services, and €2 million for works, the contract notice is published in 
the Official Journal  of the EU or in a respective business or technical magazine broadly available to 
international experts.  
3.41.  The authorities have issued a detailed han dbook explaining the law, and further developed 
an e-public procurement system (EPPS), which enables secure trade between the contracting 
authorities and local and international operat ors (bidders). These improvements to the 
procurement system have helped to level the playing field for domestic and foreign investors, and the EU Commission notes that "overall, preparat ions in the area of public procurement are 
advanced"
11, although administrative capacities in the field of remedies and of concessions and 
public-private partnerships are deemed to have remained weak. 
3.42.  The Law on Concessions and Public-Private Partnerships (LCPPP), enacted in 2012, mostly 
follows EU procedures to award public contracts,  including works, supply, and services. The LCPPP 
establishes a legal framework that provides transp arent procedures for the entry of private capital 
in the construction of infrastructure facilities and the provision of public services. Implementing 
legislation was adopted but sector-specific legislation largely takes precedence over it. The Ministry 
of Economy is responsible in this area and acts as coordinator in certain jurisdictions. 
3.43.  At the time of WTO accession, the Gove r n m e n t  o f  t h e  f o r m e r  Y u g o s l a v  R e p u b l i c  o f  
Macedonia noted that it was giving serious consideration to starting negotiations for membership 
of the Agreement on Government Procurement. The country obtained observer status in the 
Committee on Government Procurement in June 2013.  
3.2.9  State-trading enterprises 
3.44.  The former Yugoslav Republic of Macedonia does not maintain any state trading enterprises 
as notified to the WTO in 2005.12 
3.2.10  Transit 
3.45.  Transit of goods through the territory of the former Yugoslav Republic of Macedonia is 
regulated by the Customs Act. Transit licences ar e normally issued automatically by the customs 
authorities at the border crossing of entry. Good s in transit are sealed and the entity organizing 
the transit is responsible for transport to the exit  border crossing. Customs authorities at the exit 
border crossing check the documentation issued upon entry, as well as other accompanying 
documents, before authorizing exit of the transited goods.  
3.46.  If the goods in transit need a licence (e.g. from the Food and Veterinary Agency, Ministry of 
Interior), it is issued electronically through the EXIM system.  Transport licences are issued by the 
Ministry of Transport on the basis of bilateral agreements or the ECMT (European Conference of 
the Ministers of Transport) agreement. Transit of  goods harmful to the environment or human and 
animal health as carried out in compliance with the procedures stipulated in the Basel Convention 
(on the Control of Trans-Boundary Movements of Hazardous Waste and their Disposal). Under the 
                                               
11 European Commission (2012), p. 31  
12 See WTO document G/STR/N/10/MKD. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Law on Waste Management, all exports of waste have to be notified to the State Environmental 
Inspectorate and may take place only at four designated border crossings. 
3.3  Measures directly affecting exports 3.3.1  Procedures and export taxes 
3.47.  Economic operators wishing to engage in foreign trade must register simultaneously for 
exportation and importation. The conditions go verning individuals and enterprises engaged in 
export of goods and services are the same as for importation, under the Law on Trade Companies. 
The export declaration is accompanied by the invoic e for the goods, the transport document and, if 
necessary, a licence or certificate issued by the competent authority.  
3.48.  The former Yugoslav Republic of Macedonia does not apply export duties. As noted above, 
the export promotion fee was discontinued in 2005. 
3.3.2  Export restrictions 
3.49.  Export prohibitions are in place to protect national security and public morals; human 
health, flora, fauna, endangered species and the environment; and national cultural heritage. 
Products listed in HS chapter 38 containing certain dangerous substances are subject to export 
prohibition. 
3.50.  There are no restrictions on exportin g plants, plant products, and other objects in 
accordance with the Law on Plant Health. Exports of goods of plant origin require a phytosanitary 
certificate issued by the phytosanitary inspection service in the State Agriculture Inspectorate in the Ministry of Agriculture, Forestry and Water Economy. There are no restrictions on the export of fertilizers, in accordance with the quality requirements of chapter VII of the Law on Fertilizers. The 
export of some products is subject to approval by  the relevant authority for strategic reasons or in 
the context of UN conventions (Table 3.8). For ex ample, the Bureau for Medicaments issues export 
licences for narcotic drugs and precursors. Under the Law on Protection of Cultural Heritage, the 
Ministry of Culture issues export licences for cultural goods and the Ministry of Interior may restrict 
the export, import or transit of weapons and ammunition. With a view to further alignment with the acquis, the 2005 Law on Control of Exports of Dual -Use Goods and Technologies (as amended 
2010)
13, regulates the export and transfer of such goods; the export licence is issued by the 
Ministry of Economy. 
Table 3.8 Required permits and approvals for export 
Bureau of Medicaments 
Permission for export of narcotic drugs and psychotropic substances 
Ministry of Agriculture, Forestry and Water Economy 
Approval for export of seeds and seedlings  
Approval for export of walnut , cherry and chestnut logs 
Approval for export of logs, fi rewood and other wood products 
Ministry of Culture 
Export permission for cultural goods 
Certificate for export and moveme nt of protected cultural goods 
Ministry of Defence  
Approval for transportation of we apons and ammunition on export 
Ministry of Economy 
Licence for the export of dual-use goods  
Ministry of Environment and Physical Planning 
Permission to export molybdenum ores and concentrates 
Permission for export of endangered and protecte d wild plants, fungi and animals and their parts 
Permission for export of waste  
                                               
13 The Decision on the Procedure of Determinin g the List of dual-use goods and Technology 
(Official Gazette  No. 37/13) transposes Council Regulation 388/12. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 44 - 
 
  Ministry of Health  
Permission for export of precursors 
Permission for export of variou s chemical products and peorox salts inorganic acids and metals 
Approval for the export of hazard ous and other types of chemicals 
Approval for export of medical devices 
Approval for export of medicines 
Ministry of Interior 
Approval to transfer arms and ammunition on export 
Approval for transport of explosive materials on export 
 
Source:  Customs Administration. 
3.3.3  Export subsidies and inward processing 
3.51.  According to the authorities, the former Yugoslav Republic of Macedonia does not provide 
export subsidies on industrial or agricultural products.14 
3.52.  The Government implements an inward processing regime, which allows a Macedonian 
manufacturer to import, process, and export go ods free of customs duty and VAT. The regime 
takes two forms: (a) under the duty drawback system, the customs duties and import VAT are paid in advance, and refunded when the goods are exported and the appropriate documentation is submitted and (b) under the suspension system, the customs duties and VAT are suspended (and 
secured through a bank guarantee or a cash deposit) when the goods entered. 
3.3.4  Export finance and export promotion 
3.53.  The Macedonian Bank for Development and Promotion (MBDP) is a development and export 
bank, which provides finance to small and me dium-sized enterprises and export-oriented 
companies through intermediary banks or directly. The bank was established under a special law in 1998, and a new law was adopted in 2009 to strengthen the bank's role as a development bank.
15 
The MBDP is a joint-stock company in which the State is the sole shareholder. The bank provides 
funds by way of borrowing funds in the country and abroad and by issuing debt securities in 
compliance with the law. In order to accomplish its objectives, the MBDP performs the following functions: lending in the country, including financing commercial transactions; issuance of 
payment guarantees, backing guarantees and othe r forms of collateral; redemption, sale, and 
collection of receivables; domestic and international payment operations, including sale of foreign currency; factoring and forfeiting for the account of clients; trade in securities; providing export 
credit insurance of Macedonian products and services against commercial and political risks
16; and 
instigating exports. 
3.54.  Export-oriented companies may require finance for investing in upgraded machinery or 
product development as well as for working capital to source inputs and engage export customers 
where a 90-day gap between delivery and payment is  standard. The MBDP has introduced a credit 
line for export promotion and export credit fina ncing to provide working capital for pre-shipment 
export finance or bridge the period between ex port and collection of payment from the foreign 
buyer; the repayment period is up to two years and the loan amount is up to €2 million (funds 
extended through commercial banks) or up to €1 m illion directly through MBDP at a 6% interest 
rate. A credit line for export promotion of agricu ltural products has a repayment period of up to 
18 months, loan amount up to €300,000, and a fixed annual interest rate of 3%. From 2012, 
MBDP also provides an export factoring instrument17, which enables the sale of goods and services 
with deferred payment not exceeding 180 days, while part of the invoice value is received in 
                                               
14 As notified to the Committee on Agriculture in WTO documents G/AG/N/MKD/2, 8 July 2004, and 
G/AG/N/MKD/9, 24 January 2011. 
15 1998 Law on Establishing the Macedonian Bank for Development Promotion, and Official Gazette  
No. 105/2009. 
16 Commercial risk denotes payment default by the buyer due to insolv ency or bankruptcy and political 
risk denotes payment default as a resu lt of events such as war, revolu tion, cancellation of licence, non-
observance of an agreement.  
17 The USAID-funded Macedonia Competitiveness Project (MCP) assisted MBDP in purchasing the 
necessary software for administering a factoring pr ogramme and sharing the promoting costs. See USAID 
(2012a), p. 38. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 45 - 
 
  advance. MBDP purchases invoices and makes an advance payment of 80% of the invoice value at 
an interest rate of 7%. 
3.55.  The country is working to develop a more competitive and export-oriented enterprise 
sector, reflecting the need for firms in a small open economy, where domestic demand is weak, to 
look to export markets for growth. The World Bank  has estimated that exporters account for only 
5% of firms in the country but generate 55% of total revenue, 85% of manufacturing revenue, 
and employ one third of the workforce.18 Traditionally, the export basket has been concentrated in 
commodities (metals and minerals) where value adde d is low and prices are vulnerable to global 
economic swings. According to World Bank analysis , the majority of exporters are small firms (with 
on average less than six employees) that find it difficult to compete in export markets and make 
the necessary investments in innovation, skills, and quality. The World Bank has made a number 
of recommendations to promote exports, including: (i) targeting  efforts to attract FDI in export-
oriented industries where the former Yugoslav Republic of Macedonia has clear competitive advantages; (ii) strengthening the institutional set-up for export promotion by adopting an 
appropriate strategy and action plan and developi ng an export enterprise development programme 
for SMEs; and (iii) addressing the skills, innovation, and quality gap by promoting, inter alia,  
adherence to regional and global quality standards to facilitate integration into global supply 
chains. 
3.56.  As a result of growing interest in the country's investment potential, a number of 
international companies have started operations both as greenfield projects and through various types of asset acquisition and privatization.
19 The authorities emphasize that special efforts have 
been made to attract foreign investors to technological industrial development zones to produce 
high value exports such as automotive components, electronics, ICT, and textiles. 
3.57.  A number of state institutions are involved in export promotion (Ministry of Economy, 
Agency for Entrepreneurship, MBDP). The Agency  for Foreign Investment and Export Promotion 
(Invest Macedonia), created in 2005, is the primary institution supporting foreign investment in the country. In 2010 its mandate was expanded to include export promotion activities, and its 
annual funding by the State rose from €100, 000 in 2006 to €6.8 million in 2010 to cover 
international promotion, handling requests for investment incentives, and other operational costs.
20 According to the authorities, the Agency's budget for 2013 is about €6.7 million. Some of 
its activities are supported by donor organizati ons, notably USAID and GIZ (Deutsche Gesellschaft 
für Internationale Zusammenarbeit). 
3.58.  The Agency's main activities are: busi ness development (organization and/or support of 
promotional events in foreign markets such as trade fairs, B2B events, and trade missions; 
providing market information and developing basic market entry reports; and generating contacts 
for Macedonian companies with potential business partners in foreign markets. Two strategic documents guide the Agency in the implementation of its export promotion activities: the national 
export promotion strategy prepared by the World Bank (which aims to achieve a 30% increase in 
the value of exports by 2014) and the strategic framework developed by the USAID IDEAS project 
(Box 3.1). Export promotion also aims to change the export structure through developing export of products with higher value added including textil es; agribusiness and food processing; industrial 
metals and precision mechanics including automotive components and ICT. 
                                               
18 World Bank (2009). 
19 Leading foreign investors include: Johnson Matt hey and QBE Insurance Group (U.K.); Mobilkom and 
EVN (Austria);  Deutsche Telkom, Kromberg & Schuber t, and Dräximaier Group (Germany); Johnson Controls 
and KEMET Corporation (USA); National Bank of Greece, Hellenic Bottling Company and  Titan Group (Greece); 
Société Générale (France); Van Hool (Belgium); Duferco (Switzerland). 
20 Law on establishing the Agency for Fo reign Investment and Export Promotion, Official Gazette  
No. 57/10. Figures cited in Ministry of Economy (2011), p.22  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Box 3.1 USAID Investment Development an d Export Advancement Support (IDEAS) 
Project 
Project budget $4.8 million over 4 years (December 2010 to December 2014)  
Implementer:  Booz Allen Hamilton Inc. 
 
Objectives 
Improve the business policy environment to increase pr ivate sector investment, and promote increased exports 
of Macedonian products. 
 
Approach 
Improve foreign direct investment (FDI ), direct investment (DI), export facilitation, and investment aftercare: 
Support implementation of the Governme nt of Macedonia (GOM) industrial policy for enhanced inter-ministerial 
coordination and streamlining of FDI, DI, and afte rcare; develop and advanc e a comprehensive export 
promotion strategy and trade policies to support exports; and continue to increase the skills and knowledge of 
public procuremen t professionals. 
 
Enhance public-private dialog ue (PPD): develop and institutionalize stronger PPD mechanisms by establishing 
procedures, tracking the progress of issues, and expa nding the use of e-applications for communications. 
 
Expected results/impact 
The capacity and coordination of the government relate d to increasing domestic investment and attracting 
more foreign investment  under the framework of the new industrial  policy will be improved. A comprehensive 
and effective export promotio n strategy will be implemented. Public procurement capacity will be improved. 
Stronger mechanisms for public-private dialog ue will be developed and institutionalized. 
Source: http://www.ideas.org.mk/  
3.3.5  Technological industrial development zones (TIDZs) 
3.59.  At the time of WTO accession, the Government committed itself to ensure enforcement of 
its WTO obligations in its (then) free economic zones, which meant eliminating any requirements 
for use of local goods or export performance. In addition, goods produced in these zones with imports and imported inputs free of tariffs and ce rtain taxes, would be subject to normal customs 
formalities when entering the rest of the country's territory, including payment of tariffs and taxes. 
These basic principles continue to apply to the TIDZs. 
3.60.  The TIDZs were established to provide favourable conditions for the development of 
business activities by offering prepared industri al sites with investor-ready physical and legal 
infrastructure, support services, and tax, customs, and other incentives. Under the Law on Technological Industrial Development Zones, the zones are established to develop modern technologies and efficient resource utilization by  applying high environmental standards. Changes 
and amendments to the law in 2008, in which the Commission for Protection of Competition 
participated, provided consistency of the law with State Aid Law requirements. The authorities maintain that that the TIDZ Law is fully compatible with EU state aid rules, as confirmed in the 
European Commission's 2010 Progress Report. The TIDZ Law formally opens the TIDZs to foreign 
as well as domestic natural and legal persons but in practice TIDZs concentrate mostly on foreign investors, notably an American automotive components producer (Johnson Controls) and another 
automotive industry supplier (Johnson Matthey). There are currently nine TIDZs: two in Skopje, 
and one each in Tetovo, Shtip, Kichevo, Rankov ce, Strumica, Prilep, and Gevgelija. Three are 
operational for investment: TIDZ Skopje 1, which covers about 140 ha, TIDZ Skopje 2, and TIDZ Shtip (Table 3.9) and more are planned. In 2011, exports from the TIDZs represented 16.2% of 
total export volume while in 2012 this share is expected to have risen to around 19% with a 
further increase to 24% planned by 2013. Accord ing to the authorities, the number of employees 
in TIDZs is currently slightly more than 2000, up from 634 in 2011. According to the authorities, 
there is no cost-benefit analysis of the fiscal incentives to attract FDI provided by TIDZs in a 
country which already enjoys one of the lo west corporate tax rates in the region. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Table 3.9 Main TIDZs, 2013 
TIDZ Skopje 1 Skopje 2 Shtip Tetovo 
Size 
 139 ha 97 ha 206 ha 97 ha 
Ownership 
 State State State State 
Utilizeda 
 Ca. 35% 25% 6% 0% 
Key investors Johnson Controls Skopje, 
Johnson Matthey Vitek 
Macedonia, Kermet Electronics 
Macedonia, Prodis SMR 
Automotive Systems Macedonia 
 Van Hool 
Macedonia Johnson 
Controls Shtip None 
Infrastructure Investme nt ready Investment 
ready Investment 
ready  In 2013 the 
TIDZ Directorate signed a PPP agreement for development, finance, transfer and operation of 
TIDZ  
 
a Refers to percentage share of parcels for le ase that are taken on lease by the companies. 
 Source: WTO Secretariat, based on information from DTIDZ online information. Viewed at:  
www.fez.gov.mk; and informat ion from the authorities. 
3.61.  The Directorate for TIDZs, created by the Law on Technological Industrial Development 
Zones, is responsible for promoting the establishment and development of TIDZs as well as for regulating the users' operations. It also serves as a one-stop shop, issuing construction and 
operational permits and providing full after-care services to zone users. The scope of the 
Directorate's responsibilities are stipulated in the Law on TIDZs. The Government's aim is to attract enterprises that are mainly engaged in manufacturing, information technology, scientific 
research, and new technologies, with high environmental standards. For this purpose, the 
following benefits are provided: 
 Tax: investors in TIDZs are entitled to ten-year corporate income tax exemption (10% 
thereafter) and to 0% personal income tax (10% thereafter); investors are exempt from 
VAT for supply of goods and services in the TIDZ, except for sales for final consumption, and 
imports of goods into the TIDZ, provided goods are not put into circulation; investors are also exempt from customs duties on imported inputs for re-exported production in 
accordance with domestic customs legislation. The customs duty rate in the zone is 0% for 
equipment and spare parts for equipment listed under tariff headings 84 to 90. Raw materials are imported under the regular Customs Law;  
 Land: investors in the TIDZs can negotiate long-term leases for up to 99 years;  
 Infrastructure: exemption from utility taxes on natural gas, water, sewage, and electricity, 
and free connection to utilities except electricity;  
 Fees and registration: investors are exempt from paying fees for land building permits; fast 
procedures for business registration to further reduce start-up costs. DTIDZ issues the 
construction and operational permit, registers th e facilities in the public record and gives 
support in other areas; 
 Subsidies: the Government may participate in costs of up to €500,000 for building costs and 
in general and customized training programmes for company employees operating in a TIDZ (according to the criteria determined by Article 8 of the Law on TIDZ) WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  3.4  Internal policies and measures  affecting production and trade 
3.4.1  Registration 3.62.  Registration is required to carry out busi ness activity in the former Yugoslav Republic of 
Macedonia. A trading company may be establishe d by domestic and foreign natural and legal 
persons in accordance with the Law on Trade Companies. As foreign investors are granted the 
same rights and privileges as Macedonian national s, they are entitled to establish and operate all 
types of self-owned private companies or joint-stock companies. The main legal forms of company 
incorporation follow international standards and are generally compatible with the acquis.  
3.63.  Business registration is governed by the Law on Trade Companies; the Law on One-Stop 
Shop System; the Law on Administration of the Trade Register and the Register of Other Legal 
Entities, and the Law on Central Registry. The Macedonian Central Registry keeps the Trade 
Register, comprising all legal persons in the former Yugoslav Republic of Macedonia. 
3.64.  As a first step towards streamlining busine ss registration, the former Yugoslav Republic of 
Macedonia launched a central registry in 2006 after a 2005 law had transferred business 
registration out of the courts - where the proce ss had been slow and overly complex - and made 
the registry the only body in the country respon sible for registering companies. The government 
created a one-stop shop at the central registry, unifying and simplifying the procedures to register 
a company and its employees. This radically cut the number of procedures involved, and reduced 
the time from 48 days in 2004 to three, as measured by the World Bank. In 2011, the Government further streamlined and reduced the cost of business registration through an online system, removing the need to have corporate documents and signatures notarized. Due to this 
improvement in registry functioning, regarding st arting a business, the country ranks sixth in the 
World Bank's Doing Business 2012 , up from 76
th position in 2007. The new registry, along with 
legal changes, such as abolishing the minimu m capital requirement, has enabled the former 
Yugoslav Republic of Macedonia to join the rank s of the world's top reformers in this area of 
business. According to the authorities, the propor tion of applications for business registration 
received through the online system is still limited. 
3.4.2  Standards, testing and certification, and labelling 
3.65.  The Government has mostly harmonized its technical standards legislation with the relevant 
EU Directives21, as this is an important requirement the former Yugoslav Republic of Macedonia 
has to fulfil in preparation for its EU accession negotiations. According to the authorities, on the 
basis of a strategy adopted in 2009, the country has achieved a high level of transposition of the 
European technical legislation into domestic legislation, related, inter alia, to the horizontal legal 
framework defining the competences between legislator, standardization, accreditation, metrology, 
conformity assessment, and market surveillan ce. The European Commission's latest progress 
report confirmed that "good progress can be reported, particularly on standardization, 
accreditation and metrology".22 The main elements of the legal framework for standards and 
technical regulations include: Law on Standardization (revised in 2012), 2006 Law on Product 
Safety, 2009 Law on Accreditation, 2012 Law on Metrology, and Law on Market Surveillance, together with various implementing decisions.
23 
3.66.  In addition to the Ministry of Economy, wh ich is responsible for coordinating and transposing 
the acquis into the legal framework in this and other areas, other key institutions responsible for 
the framework governing the country's quality infrastructure are: (i) the Standardization Institute of the Republic of Macedonia (ISRM), which develops and adopts voluntary national standards and 
acts as the WTO enquiry point; (ii) the Accreditation Institute of the Republic of Macedonia (IARM), 
which has so far accredited over 100 conformity  assessment bodies (including laboratories for 
testing and calibration, and organizations issuing product certifications); and (iii) the Bureau of 
Metrology, a legal entity within the Ministry of Economy, which was strengthened by amendments  
                                               
21 The EU adopts Directives and publishes references to harmonized standards that each member state, 
and a prospective member like the former  Yugoslav Republic of Macedonia, is required to transpose into its 
own legislation and national standards system. 
22 European Commission (2012), p.27 
23 Amended laws notified to the WTO in document G/TBT/2/Add.84/Rev.1, 9 November 2012. The 
Ministry of Economy acts as the notifica tion authority under the TBT Agreement. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  to the Law on Metrology to simplify issuing certificates, and provide a legal basis for inspection and 
supervision of measuring instruments. Until 2011, BOM issued permits for the import of measuring 
instruments. 
3.67.  The ISRM has adopted a total of 18,000 European standards (ENs), 96% as national 
standards, of which 4,000 are harmonized ENs within the meaning of the "new approach" 
directives, which streamline technical harmonization and standards development covering essential safety, health, and environmental requirements. Ov er 4,000 international (ISO and IEC) standards 
have also been adopted. All Yugoslav standards and conflicting standards have been withdrawn. 
The ISRM is a full member of the European Committee for Standardization (CEN) and of the European Committee for Electrotechnical Standardization (CENELEC), and was certified in line with the EN ISO 9001:2009 standard. 
3.68.  Product certification is at an early stage of development. The Law on Product Safety (which 
needs to be better aligned with the acquis  according to the Commission) lays down general 
product safety requirements, the manner of prescr ibing technical regulations, and principles of 
mutual recognition of the documents, conformity assessment procedures, and marks of 
conformity. According to the authorities, under the current system, conformity with technical 
requirements may be certified through a supplier declaration of conformity (1
st party) or through a 
3rd party certificate of conformity. Progress was achieved in 2012 through a Decree24 on a common 
framework for the marketing of products and notification of conformity assessment bodies to the European Commission. The Decree provides general obligations for economic operators and a range of conformity assessment procedures, from which the appropriate approach can be selected.  
3.69.  The Decree also provides for conformity asse ssment bodies (CABs) to be notified to the EU 
Commission as competent to carry out the relevant conformity assessment procedures. The Ministry of Economy has designated CABs, inter alia, in the areas of: pressure equipment, 
transportable equipment, lifts, cableway installati on, laboratory testing of chemicals, children's 
toys, and parts relating to machinery safety. Other ministries responsible for designating CABs are: Transport and Communications, for aircraft and telecommunications equipment; Health, for 
medical devices; and Environment for emission noise. 
3.70.  The IARM is the public institution that issues formal accreditation to Macedonian private 
sector laboratories, companies, and physical persons that meet standards required to participate in the conformity assessment process. The IARM ha s so far accredited 107 conformity assessment 
bodies and is deemed by the European Commission to have adequate capacity for the current 
scope of accreditations. The IARM is a member of  European co-operation for Accreditation (EA), 
and in 2012 signed the multilateral agreement EA -MLA (for testing and calibration laboratories, 
inspection bodies, and product certification bodies), to facilitate bilateral trade; it also signed a 
mutual recognition agreement with the International Laboratory Accreditation Cooperation (ILAC-MRA). 
3.71.  The 2010 Law on Market Surveillance contai ns provisions on the coordination of market 
surveillance of products on the market, on the control of products entering the market, and the 
implementation of general principles of CE marketing. There are several state inspection 
authorities including the State Market Inspectorate, which covers most standards related to 
consumer safety (e.g. technical products, low volt age products, textiles, footwear) in which most 
of the new approach directives have been transp osed. The State Sanitary and Health Inspectorate, 
in accordance with the laws on Sanitary and Health Inspection and Safety of Cosmetic Products, 
inspects the safety of toys, cosmetics, and products for general use at the import, wholesale, and 
retail stages. The market surveillance authoritie s and Customs cooperate to identify and control 
specific products entering the market. 
3.72.  The provisions in the Food Safety Law concerning food labelling are aligned with EU 
legislation, according to the authorities. Labelling requirements (Box 3.2) are the same for domestic and imported foodstuffs except that on imports must display the address of the importer, place of origin, and country from which the product is imported. The authorities plan to issue a 
new rulebook by end-2013, by which EU Regulation 1169/2011 is to be transposed. 
                                               
24 Decree OG No. 56/2012 transposes EU Decision 768/2008.  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Box 3.2 Labelling of food 
The following particulars are compulso ry on the labelling of foodstuffs: 
 name under which the product is sold; 
 list of ingredients used in the production process; 
 quantity of certain ingredients or categories of  ingredients used in the production process; 
 net quantity; 
 date of minimum durability or, for f oodstuffs that are highly perishable, from the microbiological point of 
view, the “use by” date; 
 any special storage condition or conditions of use; 
 lot No.; 
 name or business name and address of the manufacturer  or packager, or of a seller; imported products 
also require address of importer, place of origin, and country from which the pr oduct is being imported; 
 particulars of the place of origin or provenance, wher e failure to give such particulars might mislead the 
consumer to a material degree as to the tr ue origin or provenance of the foodstuffs; 
 instructions for use when it would be impossible to make appropriate use of the foodstuff in the absence 
of such instructions; 
 for beverages containing more than 1.2% by volume of alcohol, the ac tual alcoholic strength by volume. 
Source:  Information provided by the authorities. 
3.4.3  Sanitary and phytosanitary (SPS) measures 
3.73.  On acceding to the WTO in 2003, the former Yugoslav Republic of Macedonia committed 
itself to amending existing legislation to comply with the SPS Agreement in the area of veterinary 
and phytosanitary measures. The envisaged work to reach compliance included: new regulations on animal protection based on World Organization for Animal Health (OIE) recommendations and 
standards; new regulations on plant protection in conformity with International Plant Protection 
Convention (IPPC) standards; examination and harm onization of national legislation with Codex 
Alimentarius (CA) standards; reorganization of a national reference laboratory in compliance with 
ISO/IEC standards; and preparation of a national  food safety programme. Such activities would 
allow the country to accept the principle of equivalence, to perform control, inspection, and approval procedures consistent with WTO rules, and to take account of risk-assessment techniques developed by the relevant international organizations. 
3.74.  The authorities note that, in the area of food safety and veterinary policy, via the adoption 
of CA and OIE recommendations as well as 118 by-laws, the country has achieved a high level of harmonization of its legislation with international SPS standards. In terms of phytosanitary policy, 
new regulations (19 legal acts) on plant protection in conformity with IPPC standards have been 
adopted and 17 are slated for adoption in 2013/14. The authorities recognize that training is need for relevant bodies on implementing SPS measures.  
3.75.  In addition to assuring consistency with WTO rules, the Government has focused in recent 
years on improving the capacity of the nation al competent authorities to implement the EU acquis 
regarding: field inspection services, food and feed  safety, animal disease control, plant health and 
plant protection products, control of veterinary medicinal products, and enhancement of border-
post import control. 
3.76.  The WTO national enquiry point has been esta blished at the Institute of Public Health, under 
the Ministry of Health, and the national notification authority is the Ministry of Economy. The 
country is a member of the Codex Alimentarius  Commission and of the International Organization 
for Standardization (ISO). 
3.77.  Issues surrounding the protection of human health in general and especially from food-
borne risks, which come under the SPS Agreement, ar e dealt with by several pieces of legislation, 
and supplemented by numerous implementation-related rulebooks, notably: 
- The Food Safety Law (as amended in 2012) regulates key elements, including: clearly 
defined competences, risk-based procedures, precau tionary principle and control of food safety at 
all stages (production, processing, storage, transp ort, distribution, retail, and catering). The law 
imposes obligations for food operators, their registration and approval, conditions for import and WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  export of food of animal and non-animal origin, and official controls and their funding, including 
the monitoring of residues and prohibited substances.  
- The Veterinary Health Law (as amended in 2012) defines the competences of the 
veterinary service and lays down provisions and pr ocedures related to the protection of people and 
animals against diseases transmitted by animals and products of animal origin. The law also 
regulates veterinary-sanitary inspections and control and activities in the field of veterinary medicine. 
- The 2011 Law on Veterinary Medicinal Products lays down the requirements and 
procedures for approval and placing on the mark et, manufacture, import, ownership, trade, usage 
and control of veterinary medicinal products. 
3.78.  In addition, the Feed Safety Law (as amended in 2012) covers all phases of the production, 
processing, and distribution of feed, and the use of feed. The 2007 Law on Animal By-products 
contains provisions on the categorization, collecti on, transportation, disposal, processing, use, and 
storage of animal by-products from the aspect of  animal health and veterinary public health. 
3.79.  The Food and Veterinary Agency (FVA) is responsible for food/feed safety controls, for 
protecting consumer health, and for implementing veterinary activities. It was established in 2011 
by merging the Veterinary Directorate of the Mini stry of Agriculture, Forestry and Water Economy 
and the Food Directorate of the Ministry of Health. The FVA harmonizes national legislation with 
international standards by adopting recommendations from Codex Alimentarius  and the OIE. The 
EU Commission has noted in its most recent pr ogress report that good progress has been made 
concerning general food safety. In principle, the food industry has been brought into compliance 
with WTO and EU standards, and the HACCP (hazar d analysis and critical control points) system 
has been obligatory since 2009.  
3.80.   The FVA has adopted a single multiannual national control plan on state surveillance over 
food movements, a strategy paper on veterinary and plant health, and a multiannual training 
programme. Preparations have also started on a new food safety strategy (2013-15) and a general crisis management plan.
25 An internal system for control and auditing has been established within 
the FVA and the Agency is in charge of providing information about any direct or indirect food-
related risks to the population's health. The EU Commission also states that good progress has been made on measures to control animal diseases such as rabies and swine fever.  
3.81.  The FVA is responsible for the control of impo rt and export of live animals, and products and 
by-products of animal origin at border-crossings. Currently, ten border inspection posts (BIPs) are 
in operation on the borders with Albania, Bulgaria, Serbia, and Greece, and there is an international BIP at Skopje airport. In order to guarantee effective control, in the period before 
accession to the EU, the Government is looking to  upgrade the BIPs to EU standards. The duties 
and responsibilities for conducting official veterinary controls at the border are laid down in the current legislation, in particular the laws on Veterinary Health, Animal By-Products, Welfare of 
Animals, Food Safety, and Animal Identification and Registration. Food and food-related products 
and products of animal origin cannot be imported until veterinary inspection and approval of the consignment has been completed at designated bo rder crossings. The EU Commission points out 
that the system of reduced physical checks of co nsignments at the BIPs is not yet implemented. 
3.82.  Under the current system, the import of an imals and animal by-products is permitted only 
through border posts. During import, the co nsignment undergoes a documentary check, an 
i d e n t i t y  c h e c k ,  a n d  a  p h y s i c a l  c h e c k  b y  a n  o f f i c i a l  v e t e r i n a r i a n ,  w h o  s h o u l d  b e  n o t i f i e d  b y  t h e  
importer at least 24 hours before the expect ed time of arrival of the consignment. 
3.83.  The Phytosanitary Directorate in the Ministry of Agriculture, Forestry and Water Economy is 
the competent authority for plant health, overall plant protection, and production, usage and 
marketing of fertilizers. According to Article 69 of the Plant Health Law, the Directorate integrates 
international standards for phytosanitary measures into the national legislation; the EU Commission has noted that the implementation of international standards (e.g. on surveillance, export certification, and determination of pest status) has not been carried out, although the 
                                               
25 Ministry of Finance (2012), p. 83. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Directorate is preparing a number of monitoring programmes. Other institutions for phytosanitary 
policy are the Seed and Propagating Material Dire ctorate and the State Phytosanitary Laboratory 
both within the Agriculture Ministry. 
3.84.  Phytosanitary policy objectives for 2012-14 are to raise the quality of seed and planting 
material, strengthen the system of internal monitoring of diseases in plants, and quality control of 
preparations for plant protection and fertilizers. In its 2012 report, the EU Commission stated that little progress had been achieved in phytosanitary policy, partly due to insufficient coordination 
between the various authorities and the Directorate's limited administrative capacity, and 
concluded that preparations were still at an early stage. In response, the authorities note that in 2012 cooperation between the Phytosanitary Administration and the State Agriculture Inspectorate was improved regarding data exchange and other import/export related activities. 
3.85.  Provisions for conducting official import and export controls for plant health are laid down in 
the Laws on: Plant Health, Plant protection produc t based on EU Directive 91/414 /EC, Fertilizers, 
Seed and Propagation Material, and Protection of new plant varieties. The control of import/export 
plant consignments is within the competence of the phytosanitary inspectors who determine 
whether the consignment is accompanied by the requisite certificate, is not subject to harmful organisms, meets special phytosanitary requirements, etc.  
3.4.4  Industrial policy including subsidies 
3.86.  In 2009, the Government adopted the Industrial Policy 2009-2020 as a strategic document 
for establishing the main policy directions for enhancing the competitiveness of Macedonian industry.
26 According to the strategy, by 2020 the Government plans to develop a dynamic set of 
sustainable industries, including: organic wines and foods, eco-steel, eco-friendly construction, 
ICT, specialized electronic parts, renewable energy production, creative industries, medical equipment, and services and tourism. 
3.87.  Industrial policy is a key component in the country's structural reform agenda for the period 
2012-2014.
27 The agenda covers, inter alia,  continuous improvement of the business environment; 
support for entrepreneurship and SMEs as main promoters of economic growth and unemployment 
reduction; and increased export support and promot ion, for the creation of a more export-oriented 
and more competitive economy. In its 2012 progress report, the European Commission notes some progress in the area of enterprise and industrial policy, in particular in improving the business environment, but it appears that im plementation of measures to further SME 
development "remains scattered across a number of uncoordinated and poorly funded bodies".
28 
Without doubt, the business, investment, and trad e environment has improved significantly since 
accession to the WTO and the country is seen as  one of the rapidly reforming countries of the 
world. It has also made good progress with the adoption of the acquis, an important step for a 
small landlocked country whose attraction for foreign investors may reside in its access to the large EU market.  
3.88.  Regarding subsidies, the former Yugoslav Republic of Macedonia confirmed when it acceded 
to the WTO that it did not maintain subsidies, including export subsidies, within the definition of a prohibited subsidy under Article 3 of the Agreement on Subsidies and Countervailing Measures (ASCM), and that it would not introduce such prohibited subsidies in the future. In line with the 
ASCM, the Government has notified to the WTO programmes financed by the state budget.
29 The 
most recent, for the year 2010, covers: (i) the textile industry: subsidy of MDen 1 million, for market development, commercial infrastructure, technological, and human resource development; 
(ii) cluster association: subsidy of MDen 2.5 million, to strengthen the leadership of clusters and 
cluster management; (iii) competitiveness programmes: subsidy of MDen 5.6 million, to increase competitiveness through support to accelerate introduction of international standards, improve 
innovation capability, and cooperation with research institutions; (iv) tourism: subsidy of 
MDen 17 million, to support tour operators and tourism agencies offering complete tourism package arrangements for visiting foreign tourists; and (v) regional state aid: subsidy of MDen 91 million (in the form of grants, tax empt ions and tax relief), to accelerate regional 
                                               
26 Ministry of Economy (2008). 
27 Ministry of Finance (2012), p. 58. 
28 European Commission (2012), p. 47. 
29 WTO document G/SCM/N/220/MKD, 18 June 2012  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  development supporting production investments and creation of new jobs through investment for 
users of TIDZs.30 
3.4.5  Competition policy, state aid and price controls 3.89.  According to both the European Commission  and UNCTAD, the former Yugoslav Republic of 
Macedonia has a relatively well developed competition law but an under-resourced competition 
authority to implement it.
31 The Law for Protection of Competition (LPC)32, amended in 2011 to 
align it with the Law on General Administrative Procedure, is in line with the EU regulatory 
framework and provides a framework for the functioning of the Commission for Protection of 
Competition (CPC), an independent state body wi th the status of a legal entity, as the main 
regulatory and implementing body. It controls, inter alia,  the application of the provisions of the 
LPC, the Law on Control of State Aid and the rele vant by-laws, and determines rules and measures 
for the protection of effective competition. The CPC is empowered to impose sanctions in cases of 
prohibited agreements, decisions, and concerted pr actices, abuse of monopoly or dominant market 
position, and failure to notify a concentration. The Commission is also responsible for issuing 
authorization for the concentration of economic activities (e.g. mergers, acquisition of control, joint 
ventures). 
3.90.  Several by-laws have recently been enacted that transpose relevant EU measures in certain 
areas, including block exemptions. The Commission  notes that "good progress" has been made in 
the area of anti-trust, including mergers, an d the legislative framework has been improved 
through implementing legislation. Also, the CPC is increasingly investigating economically significant sectors, including telecommunications and broadcasting, and its enforcement record has 
been improving. Since October 2011, the CPC has adopted numerous decisions on prohibited 
agreements, abuse of dominant position, concentrations, and failure to notify a concentration. Penalties take the form of fines. 
3.91.  In 2010, a new Law on Control of State Aid was enacted, and two by-laws further 
transposed relevant EU measures concerning notification procedures for granting state aid and procedures for monitoring existing state aid. Two further decrees are to be adopted in 2013 to set 
rules on granting regional horizontal aid, and services of general economic interest, in line with the 
EU acquis. In 2012, the CPC took ten decisions on state aid, including ex-officio  decisions. 
According to the Macedonian authorities, a num ber of activities are planned for 2012-2015: 
enacting regulations for establishing conditions an d procedures for granting regional horizontal aid 
and compensation for services of general economic  interest; strengthening the capacity of the CPC 
to improve its enforcement record in the area of cartels and the quality of state aid decisions; and 
increasing the number of employees in the field of anti-trust and concentrations.  
3.92.  Regarding price controls, at the time of its accession to the WTO, the former Yugoslav 
Republic of Macedonia noted that maximum prices were set for a limited number of products and 
services important for the living standard of the population and charac terized by monopolistic 
supply conditions. Since 2005, price controls exist in the form of regulated and approved prices 
but not in the form of direct control. Prices in the energy sector (oil derivatives, electricity, heating) as well as prices of telecommunication services (fixed line) are controlled by independent regulatory bodies. 
3.93.  The Energy Regulatory Commission (ERC) re gulates energy-related activities. Pursuant to 
the Energy Law, the price of natural gas and the services connected with its supply and delivery to 
the consumer is determined by ERC decisions. In  the telecom sector, prices are regulated by the 
national regulatory authority. 
                                               
30 According to the authorities, only two compan ies received regional state aid in 2010: Johnson 
Controls and Matthey, both manufacturers of auto motive component. See document G/SCM/Q2/MKD/4, 
23 August 2012, Replies to Questions posed by the EU. 
31 European Commission (2012), p. 33; and UNCTAD (2012), p. 55. 
32 It replaced the 1999 Law against Unfair Competition, which was based on the German Act against 
Restraints on Competition, and is considered to be better adapted to the needs of the country and the requirements of the acquis.  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  3.4.6  Privatization 
3.94.  Privatization of state-owned enterprises (S OEs) was relatively rapid and almost completed 
during the 1990s, mostly through sales to the ma nagement and employees of the companies. Out 
of around 2,000 SOEs, fewer than 70 are still not privatized; according to the authorities, state 
capital in these enterprises as a share of GDP is approximately 15%. State capital remains 
concentrated in the energy sector (power ge neration and transmission companies are state-
owned), public utilities, and public enterprises asso ciated with the railways. The State also owns a 
significant minority stake in the profitable telecommunications company, Makedonski Telekom. 
3.95.  Pressured by the external environment an d insufficient revenues, in common with other 
Balkan countries, the Government is seeking wa ys to attract FDI, expand exports, increase 
enterprise efficiency, and ensure financing. Engaging upon a final process of privatization is one 
possibility under consideration. The Government is looking for sources of capital not only in the 
OECD but also in growing economies such as Turkey, Russia, China, and Azerbaijan. 
3.96.  After the privatization of the telecommunications industry and partial privatization of the 
energy sector (with the sale through public tender  of the national electricity distributor EPCM to 
EVN from Austria), the Government has plans to restructure and privatize the remaining publicly-held enterprises in the energy, transport, industri al, and health sectors. Restructuring is planned 
for a number of public enterprises including PE Macedonian Railways; Public Housing Enterprise, PE 
Macedonian Roads, and the Macedonian Post. Le ading industrial companies among the announced 
privatizations are: chemicals producer JSC OHIS , which is 76% state-owned, with 900 employees; 
cigarette manufacturer TKP Prilep, all preferred shares owned by the State with 1,200 employees; 
electronics manufacturer JSC EMO Ohrid, which is 65% state-owned and has 1,400 employees; 
and military equipment producer JSC Eurokompoz it Prilep, 100% state-owned, with over 500 
employees. A number of unsuccessful attempts have been made to sell these four companies, 
which remain top of the Government's privatization agenda, although a public call for selling 
government shares in Eurokompozit Prilep will be made.  
3.97.  The main coordinating institution is the governmental Commission for Privatization, and a 
new Law on State Capital Management is under preparation. Following the termination of the work 
of the Macedonian Privatization Agency (MPA), its responsibilities, assets, and employees were 
transferred to: the Ministry of Economy, responsibl e for the finalization of the privatization process 
in companies; the Ministry of Finance, which takes care of the scale of state capital in financial 
institutions; the Pension and Disability Fund, responsible for the management of shares and stakes 
of the capital transferred to the Fund; and the Public Company for Real Estate, which manages the real estate transferred in ownership to the MPA. 
3.4.7  Protection of intellectual property rights 
3.98.  As part of its efforts to harmonize with EU legislation on intellectual property rights (IPRs), 
and in accordance with its commitments under the WTO TRIPS Agreement
33, the former Yugoslav 
Republic of Macedonia has a relatively comprehensive and recently updated legal framework. This 
includes the Law on Industrial Property (cover ing patents, trademarks, industrial designs, 
appellations of origin, and geographical indication s) and the Law on Copyright and Related Rights, 
which are in accordance with relevant EU Directives and pertinent international conventions.34 
Under the Law on Customs Measures for Protection of IPRs, the Customs Administration has 
authority to investigate cases of counterfeit goods and has the right to seize pre-emptively suspect goods. The country is a member of the World Inte llectual Property Organization (WIPO) and of all 
the relevant WIPO agreements, and in 2009 it became a member of the European Patent 
                                               
33 Pursuant to the Final report of the accession Wo rking Party, the Government  committed to fully apply 
all provisions of the TRIPS Agreement as of the date of accession without recourse to any transitional period. 
34 Paris Convention, Berne Convention, Madrid Agreement, Hague Agreement, Nice Agreement, Lisbon 
Agreement, Rome Convention, Locarn o Agreement, PCT, Vienna Agreement, Budapest Treaty, Brussels 
Convention, Singapore Treaty, Patent  Law Treaty, UPOV, WIPO Performances and Phonograms Treaty, WIPO 
Copyright Treaty, Madrid Protocol, TR IPS, European Patent Convention. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Organization and ratified the European Patent Convention (EPC).35 In the WTO, the former 
Yugoslav Republic's intellectual property legislation was reviewed in the TRIPS Council in 2004.36 
3.99.  Institutional responsibility for issues relate d to IP rights is divided between the Ministry of 
Culture and the State Office of Industrial Prop erty (SOIP). The unit for Copyright and Related 
Rights within the Ministry of Culture is responsi ble for the implementation of copyrights and other 
related rights, including supervision of the organizations/agencies for collective management. The SOIP deals with industrial property rights (patents, trademarks, service marks, industrial designs, 
appellations of origin and geographical indications). IP enforcement institutions include the 
Customs Administration, the Ministry of Interior (MOI), and the State Market Inspectorate (responsible for monitoring markets and preventi ng the sale of pirated and counterfeit goods). 
Pursuant to the 2010 Law on Copyright and Relate d Rights, the MOI is authorized to prevent 
violation of copyrights on the market. 
3.100.  In 2007, the Government established the Coordination Body for Intellectual Property 
(CBIP) with the aim of reducing IP rights infringe ments, in particular counterfeiting and piracy. The 
CBIP has facilitated a coordinated approach to IP policy and enforcement, and has been especially 
active in adopting a programme to fight piracy and counterfeiting. The CBIP also engages in promotional activities to raise awareness of the benefits of IP protection. 
Copyright and related rights 
3.101.  Accession to the WTO underscored the urgent need for the Government to prevent 
copyright infringement, and since then the govern ment has focused on building the capacity of 
state bodies competent for enforcement. 
3.102.  At the time of accession, the Law on Co pyright and Related Rights, was in principle in 
compliance with the WIPO and UNESCO conventions, the EU Directives, and the minimum requirements of the TRIPS Agreement. Full TRIP S compliance was subsequently achieved through 
amendments to the law, concerning, inter alia, retroactive protection of rights of performers to 
recordings of their performances, and the provisio n of equal protection for foreign and domestic 
holders of copyright and related rights.  
Industrial property protection 
3.103.  Although the Macedonian industrial proper ty legislation was in compliance with the TRIPS 
Agreement at the time of accession, in order to increase compliance with the minimum TRIPS standards, two new pieces of legislation have been enacted: the Amendments to the Law on 
Protection of Topographies of Integrated Circui ts, and the new Law on Industrial Property. The 
latter governs the acquisition, exercise, and protecti on of patents, industrial designs, trademarks, 
appellations of origin, and geographical indications. It has specific provisions on security and 
provisional measures, judicial protection, and additional protection of well-known marks, 
compulsory licensing, and parallel imports.
37 
3.104.  The 2009 Law on Industrial Property (as well as the Law on Copyright and Related Rights) 
more or less fully harmonized the country's legi slation with the TRIPS Agreement and the EU's 
acquis. Protection of both moral and material indu strial property rights (which includes 
trademarks, patents, industrial designs, geographical indications and topographies) is provided under the Law on Industrial Property, relevant  laws and regulations and the various bi- or 
multilateral conventions and treaties ratified by  Parliament. The law fully conforms with the MFN 
and national treatment principles and transparency  is provided through access to the registries 
and to the laws and regulations published in the Official Gazette . 
3.105.  Formal registration of a trademark is necessa ry to exercise any associated rights, and it is 
the responsibility of the rights holder to register , protect, and enforce their rights, where relevant. 
For a trademark to be protected, it must be regi stered in the Registry of Trademarks maintained 
                                               
35 More recently, the London Agreem ent on the application of Article 65 of the EPC was ratified; this 
aims at reducing the cost s for patent translation. 
36 WTO document IP/Q/MKD/1, 3 June 2005. 
37 Compulsory licensing is addressed in Articles 97-101 and Articles 102-115; parallel import provisions 
are contained in Articles 171 and 209. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  by SOIP, the nationally authorized body responsibl e for protecting IPRs. Domestic and foreign legal 
entities and individuals may register rights, although foreigners must be represented by an authorized representative registered with the SOIP. A trademark is protected for ten years, 
renewable indefinitely. The Law provides for the exclusive right of an owner of a registered 
trademark to prevent third parties from using identical or similar signs for the same or similar 
goods or services, where such use would result in a likelihood of confusion. Trademark owners are obliged to use their trademarks to maintain their validity. 
Enforcement 
3.106.  During the review period, progress in IP rights protection has been uneven and 
intermittent and, according to the EU Commission, further effort is required to enforce IPRs in a transparent and consistent manner. In its 2012 progress report, the European Commission notes 
that while there have been advances in both the legislative framework and administrative capacity, 
implementation remains a challenge as "a solid track record on investigation, prosecution and trials of IPR-related cases has yet to be established, as violations of IPR continue."
38 The 
authorities note that a methodology for the collection and processing of statistical data for 
purposes of enforcement was adopted in 2012. Given its location in the Balkans, the country is a 
transit point for legitimate and illegal goods between eastern and western markets; however 
limited data are available.39 
3.107.  Some international brands are not formally represented or registered in the country and 
so, despite a sound regulatory framework, various investors (e.g. in the IT industry, broadcasting, 
film and music production and publishing, pharmaceuticals, food and beverages, consumer goods, 
and advertising) have complained that their products marketed in the country are subject to IP 
rights infringement. The authorities note, however, that the majority of international brands are registered either through filing a national application with SOIP or an international application 
through WIPO (Madrid System). The total number of foreign trademark applications in 2012 was 
3,619. 
3.108.  IPR enforcement, including trademarks protection, is formally ensured by a variety of 
institutions and agencies (Table 3.10). 
3.109.  The need for relevant and consistent data on court proceedings against IPR right 
infringements has led to the adoption of a methodology for collecting and processing statistical data. Its purpose is to establish a single, harmonized data system as a solid basis for measuring IP 
infringements. Data from the recently launched ne w methodology will be processed by the Ministry 
of Justice and published twice yearly, starting in June 2013. 
3.110.  Given the limited size of the Macedonian  economy and the preference in the business 
community to use out-of-court procedures, only a small number of IPR-related cases reach the 
courts each year. The EU Commission notes that in 2011, 126 court proceedings were initiated for violations of IPR, from which "about 15 prison sentences and a number of fines on criminal 
offences were issued to individuals by the specialized IPR departments of the courts."
40 Courts 
with jurisdiction in IPR-related cases are the basic courts of first instance, courts of appeal, and the Supreme Court. Judicial protection of IPRs is provided by protection granted in civil law and criminal law as well as administrative protection. The Law on Industrial property also provides 
court protection before the Administrative Court. Macedonian law also enables right holders or any 
interested party to petition the Public Prosecutor to bring charges against violators of IPRs.  
3.111.  Despite some improvements, the former Yu goslav Republic of Macedonia still ranks low 
internationally in its protection of IPRs.
41 As the EU Commission points out, the level of awareness 
or concern, in both the local business community and the public, with regard to IPR infringement 
remains low despite activities to raise awareness of the importance of IP protection. Targeted 
                                               
38 European Commission (2012), p. 33. 
39 According to Customs, in 2012 55 cases were recorded  of goods in transit suspected of infringing IP 
rights, down from 72 cases in 2010. 
40 European Commission (2012), p. 32  
41 The Property Rights Alliance's 2012 International Property Righty Index ranked the country 102nd (out 
of 130) in its IPR score, just after Mozambique, Guyana and Kenya. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  training programmes for judges and public prosecutors are playing an important role in raising the 
necessary expertise for improved IP protection. 
Table 3.10 Main IPR enforcement institutions and agencies, 2013 
Institution/agency Activity 
State Market Inspectorate (SMI)  Under th e Law on the State Market Inspectorate,  
- can seize articles suspected of infringing IPRs from the Macedonian 
marketplace during regular market inspections and, if confirmed by right 
holders, can destroy the goods.  
- activities are performed in response to a specific right-holder request, 
which requires notarized, original signatures on hard copy forms. 
 
Department of Organized Crime 
in the Ministry of Interior 
 Responsible for IP protection 
Non-Tariff Measures 
Department of the Customs 
Administration (CA) Pursuant to the Customs Law and th e Law on Customs Measures for IPR 
Protection 
- works to prevent coun terfeits from crossing th e country's border to 
prevent fraud and trafficking of unsafe products.  
- Customs can act ex officio after receiving a formal request from the 
right owner (proactive protection may be requested one year at a time). 
 
Ministry of Culture unit 
responsible for copyright - Drafts laws and amendments relate d to copyright and related rights;  
- oversees the work of collective mana gement societies, an area that the 
EU Commission deems underdeveloped. 
 
Coordinative Body (CB) Established in 2007 to improve interagency cooperation on issues; has no 
legal status  
- includes representatives from all state institutions involved in IPR 
enforcement, chai red by a representative from SOIP. 
- has focused on coordinating interage ncy raids on counterfeit production 
and retail facilities; in 132 coordinated actions undertaken during 2007-
12, 407,000 infringing goods were seized. 
 
Source: Information fro m the authorities. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  4  TRADE POLICIES BY SECTOR 
4.1  Overview 4.1.  The sectoral structure of the economy has remained stable since accession to the WTO and, 
in GDP terms, is characterized by a large services sector, a medium-sized industrial sector, and a 
small agriculture sector. Services contribute over  one-half of GDP and engages over half of the 
employed labour force, while nearly a quarter of GD P is generated by the industrial sector, which is 
dominated by iron and steel, garments, construction, and mining (Table 4.1). Within the 
manufacturing sector, which accounts for 20% of overall employment and the great majority of 
exports, the country has strengths in the area s of ferrous and non-ferrous metallurgy, the 
machinery-, automotive-, electrical equipment-, ch emical-, and textile industries, processed food 
and beverages and the construction industry. Agriculture accounts for one-tenth of GDP, a share 
that has remained more or less constant during the review period, while the sector engaged just 
under one-fifth of the employed labour force in  2010. Although employment in agriculture has 
been declining, its share is still high compared with the OECD average. 
Table 4.1 Sector overview by share of GDP 2006-12 
 2006  2007  2008  2009  2010 2011 2012 
 (Share of GDP %) 
Agriculture, hunting, forestry and fishing 10.5 9.1 10.0 9.8 10.1 9.6 9.8 
Mining and quarrying; manufacturing; and 
electricity, gas,  and water supply 19.2 20.9 20.9 18.8 19.1 18.7 17.4 
Construction 5.5 5.7 4.9 5.2 5.5 6.5 6.9 
Wholesale and retail trade; repair of motor 
vehicles, motorcycles, and personal and 
household goods 13.5 13.0 12.2 13.0 12.9 13.6 14.0 
Hotels and restaurants 1.5 1.5 1.4 1.2 1.1 1.19 1.2 
Transport, storage, and communication 8.2 8.0 8.0 7.9 6.8 6.6 6.5 
Financial intermediation; real estate; social 
and personal serv ice activities 14.7 15.1 16.4 17.0 16.9 16.5 17.3 
Public administrati on and defence; 
compulsory social security; education; 
health and social work 13.3 12.7 12.8 14.6 15.5 14.8 14.9 
Value added 86.3 85.9 86.8 87.4 87.8 87.5 88.1 
Net taxes on products 13.7 14.1 13.2 12.6 12.2 12.5 11.9 
Note: Gross domestic product (GDP) at market prices is the final result of the production activity of the 
resident producer  units and it is the sum of gross value added of the various institutional sectors or 
the various activities at basic prices plus valu e added tax and import duties less subsidies on 
products (which are not allocated by activities).  Gross value added at basic prices is the basic 
category of GDP and is defined as the value of gross output minus intermediate consumption. 
Source: Republic of Macedonia Stat e Statistical Office. Viewed at: http://www.stat.gov.mk /Default_en.aspx  
(access to database 5 April 2013); National Bank of  the Republic of Macedo nia; IMF International 
Financial Statistics (IFS). Viewed at http://elibrary-data.imf.org/  [5 April 2013]; and IMF (2012), 
Country Report No. 12/133. 
4.2.  According to data from the State Statistica l Office, the labour force numbered slightly over 
941,000 in 2012, of which 68.4% were employed and 31.6% unemployed (Table 4.2). The unemployment figure may be overstated due to un registered employment in the large informal 
sector, which is estimated to be the equivalent  of 15% of GDP. The unemployment rate remains 
high, although the overall trend over recent year s has been gradually downward. The lack of job 
creation remains a critical weakness, as the cost s of starting up new businesses and of employing 
new workers have impeded the reduction of unemployment. The National Employment Strategy 
2011-2015 envisages increased funding for active employment measures, which include support 
for self-employment, formalization of informal businesses, retraining, public works, and employment subsidies for vulnerable groups. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Table 4.2 Sector overview by employment share, 2006-10 
Share of total employment  2006  2007  2008 2009 2010  
Agriculture, hunting and forestry 20.1 18.2 19.6 18.5 19.1 
Fishing 0.1 0.0 0.0 0.0 0.0 
Mining and quarrying 0.7 0.9 1.1 0.7 0.8 
Manufacturing 21.6 21.4 21.2 20.1 19.5 
Electricity, gas, and water supply 2.8 2.6 2.5 2.4 2.4 
Construction 7.6 6.4 6.5 6.5 6.4 
Services 47.1 50.1 48.9 51.7 51.8 
Wholesale and retail trade, repair of motor 
vehicles, motorcycles, and personal and 
household goods 12.8 14.1 14.2 15.4 15.1 
Hotels and restaurants 3.3 3.0 3.1 3.4 3.4 
Transport, storage, and communication 5.3 6.0 6.2 6.1 5.6 
Financial intermediation 1.2 1.5 1.3 1.4 1.4 
Real estate, renting and business activities 2.7 2.7 2.7 3.1 3.3 
Public administrati on and defence, 
compulsory social security 6.9 7.0 6.9 7.1 7.3 
Education 5.9 5.8 5.5 5.9 6.1 
Health and social work 5.7 5.6 5.4 5.7 5.6 
Other community, social and personal service 
activities 3.2 4.2 3.4 3.5 3.8 
Private households employing domestic staff 
and undifferentiated prod uction activities of 
households for own use 0.1 0.2 0.1 0.2 0.2 
Extra-territorial organisations and bodies 0.2 0.3 0.1 0.1 0.1 
Source: State Statistical Office. Viewed at: http://makstat.stat.gov.mk/pxweb2007bazi/dialog/statfile1.asp   
[10 April 2013]. 
4.3.  Infrastructure is critical for domestic inve stment, attracting FDI, and facilitating exports, 
particularly in small economies. Good infrastructure reduces the costs of production and transport 
and enhances competitiveness and growth. The former Yugoslav Republic of Macedonia has received positive scores for an improved tariff setting methodology for water and waste water, and 
increased competition in the telecoms sector. It has made some progress in unbundling the power 
sector, including the privatization of the electricity distribution company to a strategic foreign investor. On the face of it, some indicators appe ar to be satisfactory but overall infrastructure, 
particularly in transport, is in need of further modernization and investment. 
4.4.  Although landlocked, the country benefits from a strategic geographical position at the 
crossroads of two major pan-European transportation corridors, which run through it: Corridor VIII which runs from Albania in the West to Bulgaria in the East and Corridor X which connects Austria 
with Greece via Slovenia, Croatia, Serbia, and the former Yugoslav Republic of Macedonia. A road 
concession tender announced in 2010 for Corridor VIII failed to materialize, resulting in the reassessment of the Government's road strategy . The railway network extends over 900 km and 
both network and rolling stock are in need of investment. In air transport, bottlenecks constrain 
the efficient management of operations (e.g. there is no direct connection to major cities in Europe such as Paris or London). 
4.5.  The telecommunications infrastructure appears to be generally acceptable for investors. 
There is a well-developed fixed communications network with a teledensity of 20 lines per 100 inhabitants, which is within the regional average. The mobile market penetration rate is over 100%, and the vibrant internet market comprises numerous service providers, whose rates and 
service quality vary widely. 
4.6.  However, ensuring reliable power supplies is  still a significant concern. Fossil fuels account for 
more than 80% of energy consumption in the country, and an increasing amount of this is 
imported, including all liquid fuel and natural gas. Without investment in new energy sources, this 
trend is likely to continue as demand grows while domestic production erodes. 
4.2  Agriculture 
4.7.  With a 10% share of GDP, agriculture rema ins an important sector of the economy. While 
waning slightly in economic importance, the sector provided employment to around 19% of the WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  workforce in 2011, although the figure could be hi gher. Population and income distribution show 
much of the country's population is poor and vulnerable to events that affect the agriculture sector, with around a third of the population living in rural areas.  
4.8.  About half of all agricultural land is pasture land and around 46% is arable land, with the rest 
under permanent crops and meadows. The land is fragmented with an average farm size of 
approximately 1.7 hectares, scattered over two to three plots, which makes for inefficient use of 
farm land. Vegetables and fruit and tree crops make up together the largest share of agricultural 
output (over 50%) and the livestock sector accounts for over one third of the value of production. 
Wine represents about 7%. 
4.9.  The main crops include cereals, industrial  crops (mainly tobacco), fodder, fruit including 
grapes, and vegetables. Cereal field crops like wh eat and maize are grown extensively and occupy 
a quarter of cultivated land, although their contribution by value is only about 11% of total crop 
output. Some areas of the country outside the lower elevations are unsuitable for high-value vegetable production, which partly explains the reliance on more resilient and less input-intensive 
crops such as wheat, maize, and forage in more mountainous areas. Livestock has been in decline, 
the biggest decreases being in sheep and goat br eeding and poultry farming. Pig production is 
significant with about 40% of total meat production. 
4.10.  According to the authorities, forests co ver about 45% of the total territory, and forest 
management (cultivation, use, and protection) is regulated by the Law on Forests. According to 
the National Strategy for Sustainable Forestry Deve lopment, the Ministry of Agriculture, Forestry 
and Water Economy is responsible for creating an d implementing of policies for the sustainable 
management of forest resources. 
4.11.  The country has the potential to generate su bstantial export earnings from high-value crops 
such as early-season fruit and vegetables, and the Government has ambitious plans to develop the 
organic farming subsector. In net terms, however,  the country is overwhelmingly an importer of 
agri-food products. With the exception of lamb, it depends heavily on imported feed, maize, 
proteins, and vegetable fats as well as complete  fodder mixtures. Imports of food and beverage 
products are relatively diversified and the foods most commonly imported are meat preparations, 
sugar, and chocolates. Agricultural exports includ e fresh and processed vegetables, bulk wine, and 
tobacco. 
4.12.  Tobacco is an important export commodity and production is oriented towards oriental, 
small-leafed aromatic tobaccos such as Virginia and Berley. Tobacco and beverages, which are 
reported as part of the same export category, generated 8.3% of total export revenue in 2011.
1 In 
2012, tobacco and wine from fresh grapes contri buted 32% of the value of agri-food exports. 
Tobacco is politically sensitive, since the crop indirectly provides a living for an estimated 29,000 
households. Production reached nearly 28,000 tonnes in 2012, its highest level during the review period. 
4.13.  Production and processing of organic products have increased. Significant growth has 
occurred in the number of operators involved in organic production (from 50 in 2005 to 576 in 2012, concentrating on production of cereals, oil crops, orchards and vineyards, and vegetables, which reflects the country's strong potential in organic agriculture. The certification bodies that are 
nationally accredited by the Institute for Accreditation of the Republic of Macedonia and authorized 
by the Ministry of Agriculture, Forestry and Wate r Economy, maintain quality control over organic 
production. In 2011, the Law on organic agriculture was strengthened with the aim of further 
alignment with the acquis.  
4.2.1  Policy developments 4.14.  The key documents that set out the Government's policies for overall economic 
development as well as for agriculture, agri-industry and rural development include: the 
Government's National Programme 2011-2015; Pre-Accession Economic Programme (PEP) for 2013-2015; the National Strategy for Agriculture and Rural Development for 2007-2013 and its updated version in the National Strategy for Agriculture and Rural Development for 2014-2020 in 
                                               
1 State Statistical Office (2012). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  coherence with the national strategic objectives for EU integration; and the strategies on Food 
Safety, on Viticulture and Winemaking Development for 2010-2015 and on Organic Agriculture. 
4.15.  The National Strategy for Agriculture and Rural Development 2007-13 covers the major part 
of the review period and sets out six main priorities for the agriculture sector under the 
overarching goal of EU accession: increasing sect or competitiveness; improving quality and food 
safety; better resource management; improving living conditions in rural areas; reforming the regulatory and institutional framework; and implementing institutional reforms in the Ministry of 
Agriculture, Forestry and Water Economy. 
4.16.  During the review period, the former Yugo slav Republic of Macedonia adopted a number of 
laws to encourage agricultural and agri-industry growth and rural development, including: the Law 
on Agriculture and Rural Development (2010/2013), which provides the legal basis for the 
transposition of the CAP acquis; Law on Agricultural Land (2007/2012); Veterinary Health Law 
(2007/2012); Law on Quality of Agricultural Products (2010/2012); Law on Animal By-products (2007); Law on Wine (2010/2013); Law on Organic Agriculture (2009/2011); Plant Health Law 
(2005/2011); Law on Fertilizers (2007/2011); Law on Seed and Planting Material for Agricultural 
Plants (2006/2011); Law on Plant Protection (2007/2011); Law on Establishment of a Farm Accountancy Data Network (FADN 2007/2011); and Law on Establishment of the Paying Agency 
(2007/2009). On the basis of these laws, several rulebooks have been adopted to implement the 
laws and regulate basic conditions, such as standards and market organization in agricultural production. An important element in the regulation of markets for agricultural products and foodstuffs is the new Law on Quality of Agricultural Products, which is in line with EU regulations 
on common market organization. 
4.17.  Foremost among the main state bodies related to agriculture and agri-industry support and 
control is the Ministry of Agriculture, Forestry and Water Economy, which is responsible for 
creating and implementing agricultural and forest policy, as well as water management. It 
oversees the agriculture sector, including farmland management, irrigation, and drainage. It is in charge of drafting the legal acts for agriculture and rural development. It is also the management 
body for rural development that plans, monitors , and evaluates activities and programmes, and 
coordinates the activities of various institutions related to rural development. The current strategic plan advocates that it should take full responsibi lity and competence for the whole chain of food 
production. In order to realize these plans, enforce the newly enacted legislation, and carry out the 
reforms, a number of institution-building steps have been taken, including increases in staff 
training, partly in the context of the Instrument for pre-Accession Assistance. 
4.18.  Agricultural policy is largely focused on EU accession requirements, in particular building the 
necessary institutions, information systems, food -safety capacity, and farm subsidy programmes. 
In order to support the implementation of direct payments under CAP integration, an integrated administration and control system (IACS) is bein g used/under development and, according to the 
EU Commission, good progress has been made towards setting up an integrated system. 
4.19.  The Agency for Financial Support in Agriculture and Rural Development, established in 2008 
as an independent entity, implements the national financial support policies and a number of measures under the Instrument for Pre-accession Assistance Rural Development component IPARD 
programme.
2 The EU Commission noted in 2012 that the capacity of the paying agency is a cause 
for concern, given its wide range of responsibilities. In response, the authorities note that the Agency is an independent state administrative body, whose institutional capacity is being 
strengthened through the introduction of a retention policy for trained staff and the provision of 
incentives. The Agency is also responsible for implementing the CAP and the common fisheries policy in the country. 
4.20.  The Food and Veterinary Agency (FVA) is in charge of coordinating legislation and the 
control systems for food-safety issues, animal feed, and veterinary policy, and communication with the EU on these issues. Given the importance of technical capacity for food inspection services, arrangements are planned for accreditation of FVA inspection services in accordance with 
                                               
2 The main purpose of the IPARD programme is to ac t as a planning document for implementing Council 
Regulation (EC) No. 1085/2006 establishing an instrument for Pre-Accession Assistance (IPA) from the EU for 
the period 2007-13. The Ministry of Agriculture, Forestry and Water Economy has overall responsibility for the programme. See: http://www.ipard.gov.mk/en/programa . WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  European standards. The reorganization of the state-financed advisory service - the National 
Extension Ag ency - is part of the on-going effort to improve agricultural advisory services. The Ministry of Economy is responsible for related policies and programmes on economic policy, industrial policy, SME competitiveness, and innovation enhancement. 
4.2.2  Trade policy aspects 
4.21.  The former Yugoslav Republic of Macedo nia's commitments on agricultural tariffs, on 
domestic support, and on export subsidies for agri cultural products are contained in the Schedule 
of Concessions and Commitments on Goods annexed to the Protocol of Accession to the WTO. By 
joining the WTO, the country committed to the termin ation of quotas (other than tariff quotas in 
existing free-trade agreements), abolition of variable levies and export subsidies, phased reduction of import tariffs, and reform of the State Office for Commodity Reserves. On the latter point, the 
Directorate of Compulsory Reserves of Oil and Oil Derivatives (DCOR) has been established to 
maintain stocks of oil and petroleum products in line with EU acquis obligations. The DCOR's main 
source of financing is the fee for compulsory reserves paid by producers and importers of oil 
derivatives. 
4.22.  The former Yugoslav Republic of Macedonia ha s bound its tariff lines on agricultural products 
(WTO definition) with a final simple average rate of 17.5%. The Government has stated, in the 
context of this Review, that applied tariffs have been maintained at or below bound levels. In line 
with government policy to stimulate agricultural production, the Customs Tariff Law was amended in order to abolish import duties on seeds and s eedling vegetables. In addition, import duty rates 
were lowered on raw materials, such as sugars, fruit purée, pulp, and concentrated juices for 
industrial processing. Due to these reductions, th e simple average applied rate is 15.1% in 2013, 
according to the authorities. 
4.23.  The border protection regime for agriculture is more restrictive than for industrial products, 
similar to the pattern in many other countries, as well as the EU. While trade in agricultural 
products with CEFTA countries is largely duty free and only a reciprocal tariff quota for wine applies with Moldova, MFN tariffs on imports from other preferential and non-preferential partners 
remain relatively high (Table 3.5). For example, overall average MFN tariff rates for 2004 and 
2013 are 11.1% and 8.5% respectively, whereas for live animals and animal products the rates are 13.3% and 9.2%, for vegetable products 15.9% and 15.3% and for prepared foods 29.7% and 23.1% respectively. 
4.24.  While the majority of tariff lines are subject to ad valorem rates, agricultural products 
considered to be sensitive (i.e. 312 lines in the MFN applied tariff) are subject to mixed duty and compound rates, with AVEs ranging from 0.1% to 70% (Table 4.3). 
4.25.  Periodically, the Government has introduced export restrictions, including temporary export 
bans on wheat flour to prevent serious shortages in the domestic market, resulting from insufficient production of wheat in the country. Regarding the most recent ban in 2011
3, imported 
and available quantities in 2010 (ca. 230,000 tonnes) were not enough to meet domestic demand 
for production of wheat flour and bread. This measure was applied until September 2011, from which date the export of wheat flour is free. Th e country maintains a WTO tariff quota for wheat 
and meslin, which is negotiated annually.
4 The principle of allocating quotas on a first come, first 
served basis has been applied since 2003, i.e. the first exporters are able to fulfil the quotas 
without quantitative limits. 
                                               
3 WTO document G/AG/N/MKD/13 of 19 April 2011. 
4 Most recent notifications in WTO docu ments G/AG/N/MKD/16, 6 November 2012, and 
A/AG/N/MKD/14, 12 July 2011. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Table 4.3 Non- ad valorem  tariffs under applied MFN regimes by HS 2-digit level 
Descriptions No. of tariff 
lines Tariff range (%)a 
Total lines 312 0.1 - 70 
Mixed duty rate 310   
Compound rate 2   
of which:    
HS 01 Live animals 3 56 - 66 
HS 02 Meat and edible meat offal 50 12.3 - 40 
HS 03 Fish and crustaceans, molluscs and other aquatic 
invertebrates 16 15 - 62 
HS 04 Dairy produce 47 6.5 - 53.1 
HS 07 Edible vegetables and certai n roots and tubers 16 38.7 - 65 
HS 08 Edible fruit and nuts; peel of citrus fruit or melons 11 0.1 - 10 
HS 10 Cereals 3 50.9 - 59.5 
HS 11 Products of the milling industry; malt; starches; inulin; 
wheat gluten 3 49.1 - 52 
HS 15 Animal or vegetable fats and oils 8 17 - 40 
HS 16 Preparations of meat, of fish or of crustaceans, molluscs 
or other aquatic Invertebrates 14 11.6 - 35.7 
HS 17 Sugars and sugar confectionery 9 17.9 - 24.7 
HS 18 Cocoa and cocoa preparations 11 20.3 - 34.9 
HS 19 Preparations of cereals, flou r, starch or milk; pastrycooks' 
products 20 11.4 - 46 
HS 20 Preparations of vegetables , fruit, nuts or other parts of 
plants 91 18.2 - 70 
HS 21 Miscellaneous edible preparations 8 17.4 - 63 
HS 23 Residues and waste from the food industries; prepared 
animal fodder 2 12.7 - 30 
a Ad valorem equivalents (AVEs)  were estimated based on 2012 import data at the 10-digit tariff. If 
no import data were available for 2012, 2011 import data were used in calculations. In case of unavailability, the ad valorem  part is used for compou nd and alternate rates. 
Source: WTO Secretariat calculations. 
4.26.  Instruments used for domestic support are being harmonized with those of the EU in 
preparation for accession. The Government has supported the upgrading of the agriculture sector, 
increasing public funding from €9.7 million to €130 million in 2012. According to the authorities, between 2007 and 2011, €320 million was allocated from the national budget for the financial support of agriculture.
5 Of this, around 90% were allocated under direct payment policies 
(payments based on planted area, number of animals, production, premium payments, and 
payments based on non-producing criteria) while the rest was used for newly introduced measures for rural development co-financing of investments for agricultural modernization (Box 4.1). In its 
2012 progress report, the EU Commission notes that for 2012, €130 million was allocated for 
direct support schemes, including direct area  and headage payments, premium payments, and 
input subsidies for strategically important products, as well as non-commodity-based payments, 
including support for young farmers. Input subsidies are related to using a certified seed for 
cereals, industrial crops (except tobacco), and vegetables, purchase of high yield animals, in vitro insemination, establishing bee plantations, and subsidies for production of, inter alia,  vine grafts 
and fruit seedlings. 
4.27.  Support programmes have not produced the desired results, as most of the funding goes to 
income-support measures and only a small part is invested, which impairs the potential to build a competitive sector. In addition, in specific subsectors the support programmes account for an 
important share of the production costs, which can distort investment incentives. 
4.28.  Rural development policy includes measures to stimulate development for modernization 
and structural adjustment of the agriculture and f ood sector, and promotion of economic activities 
to protect the natural and cultural heritage in rural areas. According to the EU Commission, only 
                                               
5 Ministry of Agriculture, Forestry and Water Economy (2012). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  limited progress occurred with regard to rural development and implementation of the IPARD 
programme under the fifth component. 
Box 4.1 Direct support policy 
In the period of adjustment of direct support system s, in accordance with the priorities of the Common 
Agricultural Policy, and the mechan isms for payment of direct suppor t under the European Agricultural 
Guarantee Fund (EAGF), the former Yugoslav Republic of Macedonia will implement measures aiming towards: 
 
 keeping a continuous and stable policy of direct su pport in agriculture, in livestock farming, fruit 
growing and gardening, crop production, viticulture and tobacco growing, thro ugh direct payments per 
head and per hectare; 
 strengthening the efficiency of the direct support system, through the us e of indicators and results from 
the Farm Accounting Data Network System (FAD N) in defining the amounts for payment; 
 strengthening the system of payment of direct su pport and administrative control through a fully 
integrated system for administrative control (I SAC) and complementary systems, particularly by 
electronic linking registers for reco rding farms (Sole Register of Agri cultural Holdings) and the system 
for identifying land parcels, the wine cadaster, an d the cadaster of orchards and olive plantations; 
 further upgrading the system for identifying land pa rcels within the integrated administrative control 
system supported by IPA component 1; 
 institutional upgrading of the Agency for Financial Support of Agriculture and Rural Development to 
implement the functions of "a payment agency" accord ing to the principles and mechanisms for direct 
support payments under the EAGF; 
 further upgrading the system for identifying land pa rcels within the integrated administrative control 
system to be financed through IPA 2009; 
 institutional capacity-building relating to the introduction of cross compliance in direct payments, and 
compliance with environmental standards in agricultural  policy and care for the animals' condition, also 
financed through the IPA. 
Source: Ministry of Finance (2012), Pre-accession Economic Programme 2012-2014 , viewed at: 
http://www.finance.gov.mk/files/u1/pre_accession_economic_programme_2012_2014.pdf , p.81. 
4.29.  Upon WTO accession, the former Republic of Macedonia undertook a commitment not to 
decrease (i.e. a zero per cent reduction) its Aggregate Measure of Support (AMS) ceiling of 
€16.3 million relating to the 1998-2000 base period. The most recent notification to the WTO covers 2005, 2006 and 2007
6; for each year the total AMS commitment was €16.3 million and 
current total AMS was as follows: in 2005 - €3.9 million, in 2006 - €14.6 million (mainly on wheat 
and tobacco), and in 2007 - €15.8 million (allocated mainly to cattle, tobacco, sheep and goats, and wheat). According to the authorities, there ar e no more recent data on domestic support. 
4.30.    Since its accession, the former Yugoslav Republic of Macedonia has notified the WTO that 
it does not provide export subsidies.
7 
4.3  Mining and energy 
4.31.  The former Yugoslav Republic of Macedonia has large deposits of low-quality coal and lead-
zinc ores as well as copper and chromium. However, mining and quarrying make a very small contribution to value added and accounted for ju st 1.5% of GDP in 2010-11. Metal-ore mining and 
metal processing used to be large industries but output slumped in the mid-1990s and did not 
show strong, consistent growth again until 2005-06, as part of the global commodities boom. The 
only copper mine, Bucim, restarted production in 2005 after it was bought by Russian-backed Romtrade (now known as Solvaj). In the same year, Solvaj also purchased the largest lead and 
zinc mine. The mines have benefited from a sharp rise in copper, lead, and zinc prices on world 
markets. Most of the coal (lignite) reserves  are being managed by state-owned electricity 
generation companies with no clear separation of accounts.  
                                               
6 WTO document G/AG/N/MKD/10, 15 Februa ry 2011 on domestic support commitments. 
7 WTO document G/AG/N/MKD/9, 24 January 2011 covering 2004 to 2007. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  4.32.   Mineral resource exploitation is regu lated by the Mineral Resources Law (2013) and the 
Ministry of Economy is the main government authority in charge of implementing policies related to mining. Of the 300 concessions currently exploi ted, over half are for non-metallic mineral 
resources. The authorities estimate that under 10 % of concessions are held by foreign companies. 
There are no domestic sources for production of natural gas, which is used by industrial customers 
and for district heat generation. Oil is imported from Greece and processed at the Okta refinery, which is majority owned by Hellenic Petroleum. 
4.33.  The Government is concerned about the growing reliance on imported fossil fuels and 
energy inefficiency. Fossil fuels account for aro und 80% of energy consumption and an increasing 
amount of this is imported, including all liquid fuel and natural gas. Electricity production in 2009 was from coal-78%, hydroelectric-18% and oil-4%. Without investment in new energy sources this 
trend is set to continue as domestic demand grows and domestic production declines. The 
authorities are keen to improve energy efficiency  and exploit renewable energy sources starting 
with hydroelectric power and wind, solar, and biomass. 
4.34.  The electricity sector has been in a transitional phase as the country moves from a centrally 
planned and managed system to a decentralized re gulated free market. On the demand side, the 
Government has attempted to improve the efficien cy of energy usage, which has been hampered 
by below-market pricing for all but the biggest users. The main challenge for supply is the 
limitations on energy supply due to the country's la ck of oil, gas, and high quality coal reserves, 
and antiquated generation facilities. 
4.35.  Progress has been made in improving the market structure of the Macedonian power sector. 
Until 2005, the only electricity company was the vertically integrated utility ESM, which was 
unbundled in 2005 into four companies: MEPSO, ELEM, ESM-Distribution, and TPP Negotino. In 2006, the Austrian company EVN acquired ESM-Di stribution and currently operates the large 
majority of the distribution network. The privat ization of distribution in 2006, and subsequent 
substantial investment by the new owner, has reduced distribution losses and collection shortfalls. The power generation segment is still domi nated by the state-owned ELEM, which owns 
substantially all the generating capacity other than Negotino TPP, which is held separately directly 
by the State. 
4.36.  The Government has focused on improving electricity regulation but faces serious obstacles 
in appropriately pricing energy supplies. While non-residential electricity tariffs tend to higher than 
in most other countries in south-eastern Europe, residential tariffs are very low, due to significant 
cross-subsidy from non-residential to residential consumers, which constitutes an important barriers to shifting to gas for heating.
8 While residential electricity tariffs lag well behind those in 
the EU and other transitional countries, significant progress has been made. In 2008, prices for 
large commercial consumers were liberalized and those for residential consumers are set to follow in 2015 under the Energy Community Treaty to whic h the former Yugoslav Republic of Macedonia 
is a signatory, committing it to implement the relevant parts of the EU acquis. The EU treaty 
requires rebalancing tariffs through the gradual elimination of cross-subsidies and requires each class of consumer to pay a cost-covering tariff, while allowing the Government to provide a direct subsidy to the most vulnerable consumers. 
4.37.  The EU Commission noted in its 2012 progress report that the Energy Regulatory 
Commission (ERC) adopted a number of rulebooks on regulated maximum income, tariff systems, and prices for electricity. However, the report concludes that a number of implementing acts had 
still to be adopted and that full liberalization of the electricity and natural gas markets is still to be 
achieved. According to the authorities, in 2012 and 2013 the ERC adopted the required acts for further liberalization of the electricity market, which will begin for all consumers, except 
households, from 1 July 2013. 
4.38.  The new Energy Law of 2011 provides the le gal framework for the operation of the ERC and 
when fully implemented is expected to bring the country into compliance with its Treaty obligations. Implementing the Energy law should result in full electricity market liberalization by 
2015, thus providing a stable legal and regulatory environment, which is essential for attracting 
long-term private-sector investment in generation capacity and infrastructure. 
                                               
8 See Stojilovska, A. (2012). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  4.39.  The ERC regulates electricity, natural gas, and district heating, oil and oil derivatives, and 
the geothermal sector. Among its key competences are: prescribing conditions of supply of certain types of energy; prescribing methodologies for th e establishment of prices and tariff systems and 
making decisions on prices for certain kinds of energy; issuing, changing, revoking, and 
monitoring the performance of licences for certai n energy-related activities; and prescribing rules 
for the connection of energy networks. The Energy  Department of the Ministry of Economy is 
responsible for drafting the revised Energy Law an d plays a key role in all energy policy related 
regulatory and overview tasks. Th e Energy Department is composed of units for electricity, natural 
gas, oil, and heating energy. 
4.40.  Implementation of the Energy Law and a ssociated reform plans, market-based pricing, 
gasification of the country, the promotion of energy  awareness among users, as well as attracting 
more long-term investment in energy infrastructure should help ensure the security of supply and 
provide a viable basis for economic growth over the medium-term. However, the EU Commission pointed out that at the start of 2012 the country was at an "early stage" in terms of security of 
supply.
9 
4.4  Manufacturing 4.41.  Manufacturing accounts for the large majority of exports and over one-sixth of total 
employment if food production and processing is included. Its strengths are in the areas of ferrous 
and non-ferrous metallurgy, the machinery, automotive and electrical equipment industry, the chemical industry, the textile industry, processed food and beverages, and the construction industry. 
4.42.  The metallurgy industry has a long history du e to the presence of natural resources such as 
nickel, silicium, lead, zinc, and precious metals, which has attracted investment by leading international companies, such as Mittal, Duferco, and IMM. The textile and apparel industry 
remains the backbone of manufacturing and, in th e chemical sector, large companies such as the 
pharmaceutical company Alkaloid have prospered. Although the automotive and electrical equipment industry contracted following independence, investors such as Johnson Controls and 
Johnson Matthey have revived the fortunes of the sector. The entrance of such large-scale 
multinational operations in the technological industrial development zones (TIDZs), accounting for an estimated 80% of industry revenue, have served to build a modern and more globally integrated automotive components sector. In the food processing industry, processed vegetables 
and bottled juices are produced for export, and the tobacco sector is also significant, with high-
quality raw materials and major international investors (such as Imperial Tobacco) involved in cigarette production. 
4.43.  Small and medium-sized enterprises (SMEs) account for over 99% of the 60,391
10 entities 
in the country, the majority of them engaged in th e services sector, in particular in wholesale and 
retail trade. The share of employment in the sm all business sector has increased continuously 
since independence, and is currently over four-fifths. SMEs are a key source of employment and 
remain the backbone of the Macedonian economy, accounting for over 57% of GDP in 2010, up from 50% in 2007. 
4.44.  Structural reforms and the introduction of  EU-compatible laws have improved the business 
environment for SMEs and large firms. According to  the World Bank the former Yugoslav Republic 
of Macedonia rose from 92
nd position in 2006 to 22nd in 2012 (out of 185 economies), outstripping 
its regional peers (Montenegro 56th, Turkey 71st, Romania 72nd, Croatia 80th, Moldova 81st, and 
Serbia 92nd). According to the 2008 and 2012 Doing Business reports, the country has made 
definite improvements since 2008 (Table 4.4): it has made it easier to start a business by simplifying the process for obtaining a company seal; has and made dealing with construction 
permits more simple; has facilitated the register ing of property by reducing notary fees and 
enforcing time limits and has made getting credit easier by establishing a private credit bureau. It has improved its insolvency regime, but trading across borders, and obtaining electricity remain 
problematic. 
                                               
9 European Commission (2012), p. 41. 
10 According to the Central Registry  of the Republic of Macedonia  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Table 4.4 Doing business performance 
Topic 2012 Rank 2008 Rank 
Starting a business 6 21 
Protecting investors 17 83 
Getting credit 24 48 
Paying taxes 26 99 
Registering property 49 91 
Resolving insolvency 55 127 
Enforcing contracts 60 84 
Dealing with construction permits 61 76 
Trading across borders 67 72 
Getting electricity 121 n.a. 
n.a. Not applicable. 
Source: World Bank (2008) and (2012) Doing Business . Viewed at: http://www.doin gbusiness.org/reports/. 
4.45.  The Government is committed to fostering innovation and technological development with 
the aim of increasing competitiveness and the standard of living. This commitment was 
demonstrated by the adoption of an Innovation Strategy for 2012-20 in October 2012, which was developed by the OECD in close collaboration wi th the Ministry of Education and Science, the 
Ministry of Economy, and the Cabinet of the De puty Prime Minister for Economic Affairs. The 
strategy aims to strengthen policymaking, coordina tion and implementation capacity for support to 
innovation, skills, and technological development. In parallel, the Ministry of Education and Science (MoES) developed a Programme for Development of Science and Research for the period 
2013-2017 and invested in upgrading R&D laboratory facilities at universities. The strategy for 
innovation provides for adoption of a law on innovation activity and establishment of a fund for innovation and technological development. 
4.46.  The country has made significant progress in improving its business environment and 
adjusting national regulations to the acquis, and the Ministry of Economy's Programme for 
Stimulating Investment in the Republic of Mace donia 2011-2014 presents an integrated approach 
to investment, and competitiveness.
11 The industrial policy document provides the basic guidelines 
for the long-term economic development, orienting the country towards higher value-added products and services, based on knowledge and inno vation. Attraction of FDI is recognized as one 
of the five strategic objectives that will contribute to realizing this vision, the others being R&D and 
innovation, eco-friendly products and services fo r sustainable development, SME development, and 
cooperation in clusters and networks. In its 2012 progress report, the EU Commission notes that 
with the adoption of various strategies to impr ove the business climate, some progress could be 
reported in the field of enterprise and indust rial policy. However, the Commission adds that 
implementation remains scattered across a numbe r of uncoordinated and inadequately funded 
bodies. 
4.47.  The authorities recognize that, despite improvements in the business environment, the 
country needs to put the economy onto a higher growth path and to do this will require the 
development of a substantially more competitive export sector. Future growth prospects will 
depend largely on investment in and development of high value added and globally integrated 
industries such as in the automotive sector. 
4.48.  According to the World Bank, only 5% of firms in the country are exporters but they 
generate 55% of total revenue and 85% of manufac turing revenue, employ one third of the work 
force, and have six times more revenue per employee than non-exporting firms.
12 The World Bank 
further notes that despite relatively rapid growth of exports during the review period, most of the 
export growth has come from existing exporters selling the same products to the same markets, 
estimating that only 6.5% of export growth fr om 2000 to 2010 was from new products, one of the 
                                               
11 Ministry of Economy (2009).  
12 World Bank (2011a). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  lowest shares in the region.13 Export competitiveness is limited and has suffered from a number of 
vulnerabilities, including: the majority of export ers are micro firms with less than ten employees 
and have relatively low survival rates in export markets, employing low-skilled labour, and competing on the basis of price; exports are co ncentrated in commodities (metals and minerals) 
where prices are vulnerable to global economic swings; medium and large exporters in major 
manufacturing sectors have not been able to use quality and innovation as a source of competitiveness; and investment and total factor productivity growth have been low compared to 
regional trends. 
4.49.  The strategy of attracting FDI is starting to show positive results. The new investments in 
manufacturing located in the TIDZs are transformi ng the country's export basket. For example, 
chemicals has become a significant export sector (after metals and apparel), accounting for an 
estimated 10% of total exports in 2010. This is a direct consequence of new investment for 
production of emission control catalysts, which is contributing to diversification towards more competitive products. In this regard, the IMF notes that the country has been successful in 
attracting Greenfield FDI, which has encouraged  investment into new and higher value-added 
industries (Table 4.5). With the entry of two large car-parts manufacturers in 2007, automotive components have become a leading export, also involving SME inputs. 
Table 4.5 Pipeline Greenfield FDI proj ects by leading industries, 2012-15 
(€ million) 
Industry Planned investment 2012-15 
Automotive components 230 
Medical devices and pharmaceuticals 54 
Agriculture and food processing 20 
Textiles 9 
Total 313 
Source: Invest in Macedonia; IMF (2012) 2011 Article IV Consultation . Viewed at:  
http://www.imf.org/external/pubs/ft/scr/2012/cr12133.pdf ; and IMF data revised by the 
Macedonian a uthorities  
4.50.  According to the IMF, a large pipeline of Greenfield FDI projects is planned for the coming 
years, focusing on the automotive components industry although other sectors for attracting FDI include construction materials, glass, agribusine ss and food processing, machinery and electronics, 
ICT, medical devices and pharmaceuticals, energy, textiles, real estate and construction and 
tourism. The Directorate for TIDZs manages the zones. As noted elsewhere, the Law on TIDZs and the Law on State Aid offers investors a package of benefits regarding infrastructure services, customs and trade facilitation, as well as fiscal benefits (0% corporate tax and personal tax for ten 
years, exemption from import duties and VAT). According to the authorities, the incentives are 
aligned with the EU acquis regarding state aid. This strategy has helped to attract several large 
multinational companies in the automotive parts industry, two of which are operating in TIDZ 
Skopje 1. The Government has undertaken further efforts to streamline and improve the process 
of issuance of permits for buildings constructed in the zones
14, and to establish a professional one-
stop shop for aftercare services for companies operating in the zones. According to the World 
Bank, the TIDZ programme has been a critical enabling factor in the country's recent success in 
attracting high-value manufacturing FDI.15 
4.51.  Tools for export promotion have also been enhanced. In 2011, the Government expanded 
the mandate of the Agency for Promotion of Foreign Investment (Invest Macedonia) to cover 
activities related to export promotion. After its statute and framework law were revised, the 
agency was renamed the Agency for Foreign Investment and Export Promotion (Invest Macedonia) and a strategy and action plan was developed by  the Ministry of Economy and adopted by the 
Government in November 2011. Achievements since then include increasing export orders through 
trade fairs, trade missions, promotional events, and participation of Macedonian producers in business and investment fora in various countries. According to the authorities, 65 companies used 
the agency's services in 2012, and this number is expected to increase to 80 in 2013. 
                                               
13 World Bank (2011), slide entitled Stagnant export basket. 
14 Contained in the Law on Amendments to the Law on TIDZ ratified by Parliament in 2012. 
15 World Bank (2012c). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  4.52.  Regarding agri-business exports, companies in the sector face a number of challenges in 
accessing investment and working capital finance. For example, agricultural land cannot be used as collateral, which limits bank credit to the agriculture sector. While the MBDP offers a number of programmes for SMEs (export fina nce, factoring) there appears to be a need for additional 
support. The World Bank estimates that only 2% of  total exports are covered by the export credit 
insurance offered by commercial banks through the MBDP. 
4.53.  The development of the food-processing indu stry is also constrained by relatively high 
import tariffs. The regime for agriculture is more restrictive than for industrial products, as MFN 
tariffs on agricultural imports are generally around 60% for off-season vegetables, adding substantial costs to non-seasonal inputs from foreign markets Appendix Table A4.1). This in turn means that food processing has become a seas onal industry with limited average capacity 
utilization, thus limiting the development of the industry, which faces strong external competition. 
Installed production capacity of the fruit and ve getable processing industry is low, and average 
utilization since 2007 has been around 40% of capacity. To counteract this, according to the World 
Bank, the Government has reduced the import tariff for several raw materials used in food 
processing. 
4.5  Policies affecting trade in services 
4.5.1  Trade agreements 
4.54.  Despite its minuscule share in world serv ices trade, the former Yugoslav Republic of 
Macedonia made commitments in 115 of 155 services sectors (the same overall number as the EU). It scheduled extensive commitments, including on financial services, telecommunications, 
transport, tourism, and professional services. However, it did not make any commitments for 
audio-visual services, maritime transport services , internal waterways transport, or for passenger 
and freight transport in the areas of space and air transportation. It maintained MFN exemptions 
under GATS Article II for the acquisition by foreign natural persons of real estate and land, for 
certain legal services, audio-visual services, educational services, and in road transport services to cover existing or future preferential agreements . According to the authorities, the main trade 
policy objective for services is to create the necessary conditions for modernization and thereby 
improve competitiveness by encouraging increases in transfers of capital, technology, and know-
how. 
4.55.  In a 2011 study, the World Bank pointe d out that the former Yugoslav Republic of 
Macedonia, in common with other CEFTA countries, had made significant progress in opening 
services markets to competition and investment, partly as result of GATS commitments made during WTO accession negotiations and partly from pursuing EU membership, (for which all 
potential candidates must commit to liberalization of services sectors).
16 For example, the study 
notes that in terms of market access for most services, no CEFTA country has legal restrictions on foreign firms establishing a commercial presence and, once established, foreign-owned firms are 
subject to the same non-discriminatory rules as domestic firms. The 2010 OECD Investment 
Reform Index confirmed that CEFTA countries had made considerable progress in adopting the 
principle of national treatment and had not added any restrictions in recent years.
17 
4.56.  The Economic Integration Agreement between  the European Union and the former Yugoslav 
Republic of Macedonia entered into force in 2004 and the services aspects were notified to the 
WTO in 2009. In addition to governing trade in services, the agreement includes provisions on 
trade in goods (already implemented as per the Interim Agreement), approximation of laws, law 
enforcement and competition, justice and home affairs, cooperation policies, and financial 
cooperation. The aspects of the agreement related to trade in services are contained in Title V (covering movement of workers, establishment, ru les on supply of services, current payments, and 
movement of capital and general provisions). The structure of the agreement follows neither a 
typical "negative" nor "positive" list approach but reflects its main objective: the approximation of the former Yugoslav Republic's legislation to that of the EU, and taking account of its request for EU membership.
18 Regarding full implementation of the Agreement, four years after entry into 
                                               
16 World Bank (2011a). 
17 OECD (2010). 
18 For example, Title V does not contain any explicit market access limitation per se, comparable to 
GATS Article XVI provisions. As regard s establishment, services may be pr ovided from entry into force of the WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  force (i.e. in 2008), the Stabilization and Association Council was required to evaluate progress 
and decide on the transition to the 2nd stage. In 2009, the EU Commission put forward a proposal 
for a decision of the Council , which is still pending. 
4.57.  The authorities maintain that in the area of right of establishment and freedom to provide 
services, the country has achieved a high level of compliance with EU legislation. Macedonian law 
respects the principle of non-discrimination (in Article 48) and provides treatment no less favourable than the treatment of domestic natural and legal persons in respect of the 
establishment of EU companies and of subsidiaries' operations in the former Yugoslav Republic of 
Macedonia. A draft law on services that will transpose EU general principles (in Directive No. 32006LO123) to eliminate remaining barriers to th e provision of services is in the process of 
inter-ministerial consultations. 
4.5.2  Financial services 
4.58.  The financial system in the former Yugoslav  Republic of Macedonia consists of the National 
Bank of the Republic of Macedonia (NBRM), comme rcial banks, savings houses, exchange offices, 
insurance companies, pension funds, investment  funds, brokerage firms, leasing companies, 
financial companies, and a stock exchange. The banking sector, which is under the direct regulatory and supervisory authority of the NBRM, dominates the financial sector. A key structural 
feature of the financial system is its relatively simple structure (Table 4.6). Non-depository 
financial institutions, which are predominantly foreign-owned, have a relatively small role in financial intermediation, although a gradual increase in their importance should be expected. 
Table 4.6 Structure of the financial system 
Type of financial institutions Structure (share of 
assets) (%) No. of institutions Total assets/GDP (%) 
 2005 2009  2012  2005  2009  2012  2005 2009 2012  
Depository financial 
institutions 89.7 89.7 89.2 34 28 23 48.3 66.4 76.9 
Banks 88.4 88.6 88.5 20 18 16 47.6 65.6 76.3 
Saving houses 1.2 1.1 0.7 14 10 7 0.7 0.8 0.6 
Non-depository financial 
institutions 10.3 10.3 10.8 23 76 86 5.6 7.7 9.3 
Insurance companies 8.6 4.0 3.3 10 13 15 4.6 3.0 2.8 
Insurance brokers n.f. n.a. n. a n.f. 12 20 n.f.  n.a. n.a. 
Insurance agents n.f. n.a. n.a n.f. 5 10 n.f. n.a. n.a. 
Leasing companies 1.4 3.0 1.7 2 9 10 0.8 2.2 1.5 
Pension funds n.f. 2.9 5.3 n.f. 4 4 n.f. 2.1 4.6 
Pension fund management 
companies 0.1 0.1 0.1 2 2 2 0.1 0.1 0.1 
Brokerage houses 0.2 0.2 0.1 9 18 10 0.1 0.2 0.1 
Investment funds n.f. 0.1 0.1 n.f. 8 9 n.f. 0.0 0.1 
Investment fund management 
companies n.f. 0.01 0.003 n.f. 5 4 n.f. 0.01 0.003 
Private equity funds n.f. n.a. n.a.  n.f. n.a. n.a. n.f. n.a. n.a. 
Private equity fund management 
companies n.f. n.a. n.a. n.f. n.a. n.a n.f. n.a. n.a. 
Financial companies  n.f n.f 0.2 n.f. n.f.  2 n.f. n.f. 0.1 
Total 100.0 100.0 100.0 57 104 109 53.8 74.1 86.2 
n.f. Not fu nctioning. 
 n.a. Not applicable. 
Source: National Bank of the Repu blic of Macedonia (www.nbrm.mk). 
4.59.  In relation to the overall economy, the financial sector remains small and is growing slowly. 
The size of the financial sector is considered to be broadly consistent with Balkan region norms in 
terms of deposits (53% of GDP in 2012), stock mark et capitalization (24% of GDP), and insurance 
(insurance premiums were 1.5% of GDP in 2012). The critical ratio of bank credit to GDP (47% in 
2012) is lower than the regional average and lags far behind the more developed eurozone region, 
                                                                                                                                               
Agreement and regarding the supply of services (coverin g modes 1, 2, and to some extent 4), the right to 
provide services is granted progressively. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  which is used as a global benchmark.19 In 2012, the intermediation rate (measured as total 
assets/GDP) rose to 86%, which is considered relatively low by regional standards. Access to financial services is difficult and apart from banks, the financial sector remains small and unsophisticated, and plays a limited role as an engine of economic growth. The leasing market is 
underdeveloped and the share of savings houses in the total assets of the banking system remains 
low at around 1%, while other institutions providing financial services have a total market share of around 10%. 
4.60.  In order to strengthen financial inter-mediation in the non-banking sector and to facilitate 
access to loans for SMEs, the Government has introduced legislation for non-banking financial institutions that grant loans in various forms. The Law on Financial Companies (OG No.158/2010) regulates the establishment, operation, and supervision of non-banking financial institutions that 
issue loans and guarantees and issue and administ er credit cards and perform factoring. These 
companies are at an early stage of development but are expected to contribute significantly to this important segment of the financial market. According to the authorities, the market for non-bank 
financial institutions currently consists of 11 leasing companies and 3 financial companies (one for 
issuing and administering credit cards and two for crediting, factoring, and issuing guarantees). 
4.61.  Although considerably improved over the past several years, the Macedonian financial 
system is still relatively underdeveloped by EU standards. This is reflected in the EU Commission's 
2012 progress report, which devotes a sizeable section to financial services and notes that progress has been made in banking, insurance, and securities markets and that alignment of the 
legal framework on banking and insurance supervision with the acquis "is very advanced". 
However, the report points out that alignment with key acquis in financial market infrastructure 
remains to be achieved and that overall, alignment in financial services is "moderately advanced". 
Banking 
4.62.  The banking system is based on the Bankin g Law and the National Bank Law. The Ministry 
of Finance is responsible for preparing the Banking Law and its harmonization with relevant EU Directives. The Law is prepared or revised in close cooperation with the National Bank of the 
Republic of Macedonia (NBRM), the central bank. Banks are established and operate pursuant to 
the Banking Law.
20 The Banking Association within the Chambers of Commerce of the Republic of 
Macedonia is an associative member of the European Banking Federation.  
4.63.  The banking system is two-tiered, consisti ng of the NBRM and the banks. The NBRM is the 
main regulatory body responsible for licensing and supervising all banking institutions and savings 
houses. Banks are obliged to comply with the ex isting supervisory standards implemented for the 
purpose of limiting the banks' risk exposure. The standards established and implemented by the 
NBRM are derived from the Basel Committee's principles and the European directives. Key 
standards include: capital adequacy and criteria for classification of on and off-balance-sheet 
assets according to their risk level. 
4.64.  The NBRM is the independent money-issuing institution, which has as its primary objective 
the achievement and maintenance of price stability. It also aims to contribute to the maintenance of a stable, competitive, and market-based financial system. The NBRM is responsible for general liquidity of payments within the country and ab road, and design and conduct of monetary and 
foreign exchange policy, and participates in the determination of the exchange rate regime.  
4.65.  As of October 2012, the banking system consists of 15 commercial banks under private 
ownership and one state-owned development bank (Macedonian Bank for Development 
Promotion), which provides loans to SMEs and export-oriented companies. Twelve banks are 
predominantly owned by foreign entities
21, seven of which are subsidiaries of foreign banks. 
According to the authorities, the share of fore ign capital amounts to 75% of total capital. 
According to the Banking Law adopted in 2007, a foreign bank may have a presence either as a 
legal entity or by opening a bran ch or a representative office (or after EU accession by providing 
cross-border financial services). Savings houses are limited in their banking activities to savings-
                                               
19 Figures cited in USAID (2012b). 
20 Official Gazette  No. 67/07, 90/09, 67/10 and 26/13. 
21 Foreign-owned banks are considered those where foreign shareholders own more than 50% of the 
total number of issued common shares. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  related services for individuals and may lend directly to companies in limited scope; they may not 
undertake other banking operations. It appears that the shift to foreign ownership did not bring about major structural changes in the sources of financing of the banking system, which continues to depend on deposits from residents. The orientation of banks towards domestic financing, rather 
than international credit lines to fund lending, has proved useful in maintaining the stability of the 
domestic banking system at times of global financial disruption. 
4.66.  Banking is conservative, offering traditional banking services only although commercial 
banks are trying to catch up by offering new banking services and products. The promotion and 
development of online banking was a leading prio rity of the banks during the review period. 
Domestic companies secure financing primarily from their own cash flow due to lack of corporate bonds and securities as alternative credit instruments. Credit is available to private companies but 
is expensive and subject to significant collateral in the form of real estate, which is often appraised 
by the banks at lower than the market value. The authorities point out, however, that since 2009 
interest rates for new loans to companies have decreased from 8.9% to 7.7%, a trend that is 
present for both denar loans and loans with an FX component.  
4.67.  A group of large banks - consisting of Komercijalna Banka, Stopanska Banka Skopje, NLB 
Tutunska Banka, and Ohridska Banka - dominate  the banking system, holding an estimated 70% 
of total banking assets, 74% of total gross credits and 79% of total deposits. The main foreign-
owned banks - Stopanska Banka AD Skopje (owned  by the National Bank of Greece) and NLB 
Tutunska banka AD Skopje (owned by the Nova Ljubljanska Banka), which hold around 38% of banking assets, were not significantly affected by the global financial crisis. Stopanska Banka is 
the second largest bank with around 21% of total banking assets. Its capital ratio is above the 
average of banks in the country and it is not re liant on parent bank funding. According to the 
authorities the main vulnerability in case of a possible default of Greek sovereign debt, is a 
potential reputational risk that would affect Greek bank holdings operating in the former Yugoslav 
Republic of Macedonia. 
4.68.  A joint IMF and World bank team, through the 2008 Financial Sector Assessment 
programme, evaluated the banking system as stable and resistant to various risks (including 
interest rates, foreign exchange, and credit risk) and in compliance with the Basel core principles, where banking supervision has shifted to comply with Basel II recommendations. Overall, the banking system remains relatively robust with st rong capital and liquidity buffers, although most 
banks have experienced a moderate increase of non-performing loans (NPLs)
22, which can hamper 
access to finance and drag down bank profits. 
Other financial services 
4.69.  The insurance sector is governed by the Insurance Supervision Law and the Law on 
Compulsory Motor TPL Insurance.23 The Ministry of Finance is in charge of adopting the legal 
regulations, and the Insurance Supervision Agency  (ISA), established in 2009, is in charge of 
licensing and supervising the operations of insurance companies, insurance agents and brokers, as 
well as adopting the related bylaws. The 2012 EU Commission progress report notes that the ISA has issued implementing legislation on accounting and financial reporting, risk-based supervision and consumer protection, thus "almost completing the legal framework on insurance supervision". 
4.70.  Insurance premiums accounted for only 1.5% of GDP in 2011 and have changed little over 
the years. At end-December 2012, there were 15 insurance undertakings, 14 of which were foreign-owned. The share of foreign capital in the industry was estimated at 80% in 2012. 
Beginning in 2006, 13 foreign companies invested in the insurance sector. There are no limitations 
for entry of foreign capital or for the stake that foreign entities may acquire in insurance 
                                               
22 At the end of December 2012, NPLs accounted for 10. 5% of total credit, compared with 9.9% at the 
end of 2011. 
23 According to the EU Commission, uninsured drivin g is a challenge and the enforcement record on 
combating offences committed by uninsured drivers is weak . The Interior Ministry estimates that the number of 
uninsured vehicles has dropped from 17% to 10%. It is fu rther pointed out that the provisions in the Law on 
Compulsory Motor Insurance (authorizing the Ministry  of Finance to set the premiums for motor vehicle 
insurance) are an effective barrier to competition between insurance companies and not in line with the EU acquis.  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  companies. The Insurance Supervision Law does not discriminate between domestic and foreign 
investors. 
4.71.  The basic legislation on securities markets is contained in the Securities Law (2005, as 
amended), the Law on Takeover of Joint Stock Companies (69/2013) and the Law on Investment 
Funds (2009, as amended). The Securities Law, inter alia,  regulates the conditions for issuance, 
trading, registration, clearance, and settlement of  securities; the requirements for the functioning 
of the market; disclosure obligations of issuers;  and the authority and role of the SEC. The 
Takeover Law regulates the procedure for purchase of control shareholding in joint-stock 
companies. The Law on Investment Funds regulates the conditions for incorporation, supervision, and management of investment funds and investment fund management companies and their depository bank. 
4.72.  The Macedonian Security and Exchange Commi ssion (SEC) is the national securities market 
regulator. It is responsible for licensing all MSE members for trading in securities and for regulating and supervising the market. The country's  securities market remain modest in turnover 
and capitalization (24% of GDP in 2012). At the end of 2012, 32 companies were listed on the 
market for publicly-held companies, where there is certain amount of transparency and information disclosure. The EU Commission assesses that the national legislation on market abuse, 
market in financial instruments, investor compensation schemes, transparency, and prospectuses 
is largely in line with the corresponding acquis.  
4.73.   The Agency for Supervision of Fully Funded Pension Insurance (MAPAS) is in charge of the 
supervision of pension funds although, according to the EU Commission, it still has only limited 
leverage over the institutions it supervises. However, in August 2012, the Macedonian Parliament 
adopted the Law on amending the Law on Mandatory Fully Funded Pension Insurance 
(OG No. 98/2012), by which MAPAS has obtained a higher degree of institutional and operational 
independence. 
4.74.  There are also ten providers of financia l leasing and two finance companies engaged in 
approval of credits, issuance of guarantees, issuan ce and administering credit cards, and factoring. 
According to the authorities, their share in total financial sector assets in 2012 amounted to under 
2%. 
4.5.3  Telecommunications 4.75.  The primary legislation regulating the elec tronic communications sector is the Electronic 
Communications Law 2005 (the "EC law"), base d on the EU 2003 regulatory framework, but 
legislative progress to ensure full alignment of legislation with the EU 2009 regulatory framework 
appears to be slow. The law establishes the national regulatory authority, the Agency for Electronic 
Communications (AEC), defining its responsibilities along with those of the Government. 
Responsibilities for drafting sectoral legislation and policy-making for electronic communications and the information society have been transferred to the new Ministry of Information Society and 
Administration (MISA) from the Ministry of Transport and Communications. According to the EBRD, 
there is only limited capacity at ministry level for legal drafting or policy work.
24 Nevertheless, the 
former Yugoslav Republic of Macedonia already alig ns closely with legislative best practice for the 
electronic communications sector and is workin g towards adoption of the EU 2009 regulatory 
framework.  In this regard, a revised Electron ic Communications Law is under preparation.  
4.76.  The AEC was established in 2005 as an autonomous, independent authority responsible for 
regulatory tasks defined under the EC law, including adoption and administration of implementing 
legislation within its competencies, managing frequency spectrum and numbering resources, 
carrying out analysis of the relevant electronic communications markets, and imposing regulatory 
obligations on undertakings designated to have significant market power. The AEC has published a 
5-year regulatory strategy (2012-2016) and introduced regular public consultations, including on 
its annual plan. 
4.77.  A number of competitive safeguards fores een under the EU 2003 regulatory framework are 
in place in the former Yugoslav Republic of Macedonia: carrier selection/pre-selection in the fixed 
                                               
24 European Bank for Reconstruction  and Development (2012), p. 35. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  network; reference interconnection offers of the fixed incumbent and mobile operators; reference 
unbundling offer of MakTel; regulated fixed interconnection and local loop unbundling (LLU) charges; and  fixed and mobile number portability. The main priorities for the AEC are the full, practical implementation of regulatory measures fo r next generation access, and providing a series 
of wholesale services. The Government has begun th e process of digitalization of all television 
broadcasters operating in the market. Consequently the frequency spectrum will be freed up for mobile operators to offer 4
th generation wireless data services. At the start of 2013, the AEC 
announced the holding of a public hearing regarding amendments to the method of calculation of 
the annual fee for the use of radio frequencies. 
4.78.  Fixed voice telephony was formally liberalized by 2008. Makedonski Telekom (MT), 35% 
state-owned, is the incumbent provider of fixed services. Fixed-line penetration declined from 
29/100 population in 2005 to 20/100 population in 2012. Alternative fixed operators have gained a 
market share of around one third of the market. MT faces strong competition from cable operators 
and fixed wireless access providers in the provisio n of fixed broadband services, with MT's fixed-
line market share at around 66%. Overall, fixe d broadband grew rapidly in a competitive market 
during the review period, reaching an estimated 14/100 population (Table 4.7). 
Table 4.7 Number of subscribers in the electronic communications market 
Indicator 2011 2012  
Total number of fixed lines (all technologies) 408,318 422,053 
Number of fixed lines per 100 inhabitants 19.82 20.56 
Total number of active mobile subscribers in mobile telephony 2,235,460 2,213,223 
Number of active subscribers in mobile telephony per 100 inhabitants 108.52 107.82 
Total number of subscribers of broa dband internet via mobile networks 
(2G/3G) 260,926 156,395 
Total number of subscribers of TV services 278,140 251,584 
Source:  Agency for Electric Communications. 
4.79.  There are three foreign-owned mobile ne twork operators (T-Mobile accounting for 48% of 
the market, ONE with 24%, and VIP with roughly 28%), all offering UMTS/3G. Mobile penetration 
is relatively modest at 108/100 population but competition is intensifying in the mobile market since the fees for mobile number portability have been reduced and national roaming is present.  
As of September 2012, new wholesale prices apply, facilitating price reductions for end-users, the 
entry of new investments and technologies. Mobile  broadband has grown slowly with two mobile 
networks offering service since 2008; penetration remained below 1/100 population in 2011 but mobile broadband should accelerate to compete with fixed broadband as the market develops. 
4.80.  With respect to assessing the overall comp etitiveness of the market, the former Yugoslav 
Republic of Macedonia uses EU best practice for market definition, analysis, and determination of 
significant market power. However, according to the EBRD, the remaining competitive market 
safeguards should be reinforced through stronger infrastructure access and sharing provisions and 
cost-oriented wholesale charging based on modern cost models. 
4.5.4  Transport and logistics 
4.81.  Efficient transport services and logistics are critical for a landlocked country. The former 
Yugoslav Republic of Macedonia however ranked 99
th out of 155 countries in the World Bank 2012 
Logistics Performance Index (LPI), down from 95th in 2011 and lagging behind most countries in 
the region.25 Despite of increased investments in the rail and road network since 2008, including 
with assistance from various donors, transport infrastructure is a constraint. Important challenges 
include: the development of motorway concession s and the continued upgrading of regional and 
local road networks to reverse the trend in road deterioration; addressing railway border-crossing 
bottlenecks and increasing the competiveness of railway operations; and sound implementation of 
the airport concession system. In its 2012 prog ress report, the EU Commission points out a 
number of problems in the transport sector, such as road safety, and the closing of the railway 
                                               
25 World Bank (2012a). The LPI measures on-the-ground  trade logistics performance based on a survey 
of logistics professionals su ch as freight forwarders. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  market for competition until EU accession is achi eved means that little progress has been achieved 
in transport policy. 
4.82.  Nevertheless, there was some infrastructure  modernization during the period under review. 
The largest airports were upgraded through a concession with a private operator from Turkey, 
thereby facilitating more efficient passenger and cargo traffic. The number of passengers increased 
by 43%, from 639,000 in 2009 to nearly 914,000 in 2012, while transported cargo increased by 2% to 2,500 tonnes. Also, the Government has invested in completing its main trade routes along 
the European Transport Corridors VIII and X
26, which constitute the backbone of the country's 
road network, as well as the related rail corridors.27 Ground traffic is heavily concentrated on 
international transit via Corridor X (Hungary-Belgra de-Skopje-Thessaloniki), reflecting increased 
transport from western Europe to Greece and some shift in container transit traffic  
4.83.  Road and railway transport are important fo r the former Yugoslav Republic of Macedonia not 
only to improve its own transport efficiency and competitiveness but also to compete for the container traffic between western Europe and Greece and Turkey. Road transport is clearly the 
dominant mode for both passenger and freight transport (Table 4.8). Railway freight transport 
remains low, even taking into account the size of the country. Currently, an estimated 99% of the traffic on the railways is international and 95% of freight revenue is generated along Corridor X. 
Data are not available on the share of trade by transport mode during the review period is not 
available. 
Table 4.8 Passenger and freight transport by mode 
 2001  2006 2011  
Goods carried by mode of transport (tonnes)    
Road transport ('000) 21,573 31,083 32,537 
Rail transport ('000) 2,799 3,800 2,770 
Air transport 2,329 1,680 2,185 
Freight transport (million tonne-kilometres)    
Total 2,773  8,913 5,860  
Road transport 2,311 8,299 5,381 
Rail transport 462 614 479 
Passengers carried by mode of transport ('000)    
Road transport 13,724 8,862 15,644 
Urban transport 98,474 66,687 67,072 
Rail transport 1,344 1,011 1,421 
Air transport 508 592 835 
Passenger transport (million passenger-kilometres)    
Total 964 1,121 1,785  
Road transport 831 1,016 1,640 
Rail transport 133 105 145 
Source: State Statistical Office (2012), Macedonia in Figures . Viewed at: 
http://www.stat.gov.mk/Publikacii/Mak_Brojki_2012_A.pdf . 
4.84.  The national transport strategy from 2007 to 201728 is a wide-ranging plan based on the 
concept of the EU neighbourhood policy in transport for better connecting the EU with its neighbouring countries and regions. The "strategy on connectivity" is aimed at promoting market-
oriented transport services harmonized with EU  transport policy and implementing the necessary 
measures to ensure that transport infrastructure is technically and financially sustainable. The strategy covers all the major transport modes with a timeline for achievement (Table 4.9). Of 
particular interest are the cross-border connectivity challenges posed by the 15 road and 3 railway 
                                               
26 Corridor X, which passes through the country in a no rth-south direction, and with a total length of 
172 km, has been 70% finalized to modern highway stan dards. Corridor VIII, with a total length of 304 km, 
crossing the country from east to west, is comparativ ely less advanced, with about 36% of the total length 
built to modern highway standards. 
27 Rail Corridor X with a total length of 215 km, and has 19 stations. Corridor VIII is 315 km in length 
and 50% of that has been built; there are no rail links with the neighbouring countries of Albania and Bulgaria. 
28 Ministry of Transport and Communications (2007). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  border crossings, which, according to the authorit ies, seriously hamper the operations of trucking 
and railways. 
Table 4.9 Transport action plan 
Area Action plan Indicator Timeframe 
 
    Road Complete corridor X Construction completed 
and open to public use Completion by 2016 
Complete corridor VIII Construction completed 
and open to public use  
Ensure national road 
network is connected efficiently to corridors and bottlenecks eliminated Reduce time of travel. 
Proven continuous efforts to increase the traffic flows  
Implement traffic 
management system Management system in 
place and operational  
 
   Rail Reconstruction of corridor 
X Reconstruction completed 
and open to public use 2014 
Complete corridor VIII Construction completed 
and open to public use Up to 2025 
Political support to 
separate infrastructure from operations Laws in place and 
infrastructure and operation separated Completed in 2007 
Improve traffic 
management system Management system in 
place and operational 2016 
 
  Air transport  Increase capacity at 
Skopje and Ohrid airports Master Plan and 
extension of the airports completed 2011 Airports in Skopje and 
Ohrid are operating  
3rd, 4th, and 5th freedom 
implementation EU regulations 
transposed Implementation of 3rd 
and 4th freedoms; 5th 
freedom subject to 
completion of 1st phase of 
ECAA Agreement 
Promote airports to attract low-cost carriers (LCCs) MoU signed with several 
LCCs Ongoing 
Promote connection with 
main hubs in Europe Route development plan 
developed and 
implemented Ongoing 
 
Maritime  Insure access to sea 
ports in the region, Albania, Greece, and Bulgaria Bilateral agreements in 
place (public and private)  
Pipeline connectivity Secure oil and gas supply Bilateral agreements in 
place (public and private)  
 
Multimodal connectivity Put in place strategic 
national nodes  Multi-modal terminals in 
place and operational  
Develop policy framework 
in place Apply policy framework in 
place  
 
  
Cross border connectivity 
 Improve turnover of 
passenger and freight lead times; ease border 
documentation; and 
improve efficiency with border management Improved traffic flow; 
reduce border passing time to acceptable level; 
reduce documentation 
and put efficient management in place  
Standardize customs and Adoption of relevant  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Area Action plan Indicator Timeframe 
 immigration procedures; 
implement international 
convention and standards international standards 
and conventions 
Control security 
measures State security measures; 
define security standards; and implement efficient measures and applications  
Source: National Transport Strategy for the Republic of Macedonia, 2007-2017. 
Land transport  
4.85.  Road transport is governed by several la ws, including the Law on Road Transport, the Law 
on Public Roads, the Law on the Transport of Da ngerous Goods by Road and Rail, the Law on Road 
Transport Safety, and the Law on Vehicles. The Ministry of Transport and Communications is in 
charge of transport policy and the State Transport Inspectorate, located in the Ministry, is 
authorized to carry out inspections. The EU Commission notes that state transport inspections have been stepped up but the administrative capaci ty of the State Transport Inspectorate needs to 
be augmented. The Fund for National and Regional Roads is in charge of road planning, 
construction, maintenance, and financing. Currently, road maintenance is contracted out to one 
state enterprise (without competition) but the authorities say they are committed to introducing fair competition and best practice maintenance contracts. 
4.86.  The 1997 Traffic Agreement between the form er Yugoslav Republic of Macedonia and the EU 
has been incorporated into the SAA. International transport of passengers and goods by road is on 
the basis of bilateral agreements between the Go vernment and European countries, which aim to 
fully liberalize passenger and freight transport, in cluding transit. International transport of goods 
to most countries takes place without permits or with an agreed quota regime. In 2009, the Government abolished discriminatory treatment of fo reign vehicles regarding the collection of fees 
designed to finance infrastructure.  
4.87.  Macedonian railways was one of the biggest loss-making public sector enterprises in the 
country with total debt approaching 3.3% of GDP a decade ago. The Government reform process, 
which began in 2005, resulted in the institutional separation of the railway in 2007 into an 
infrastructure company (MR-I) and an operating company (rail transport joint-stock company 
MR-T, in which all shares are state-owned). There have been significant labour adjustments and tariff reforms, and institutional mechanisms for the introduction of public service obligations and 
access charges are under development. Streamli ned operational and financial performance and 
targeted investments have improved the railwa y's performance as a commercial enterprise.  
4.88.  Under the 2010 Law on the Railway System, the responsibilities of the regulatory body 
(Agency for Regulating the Railway Market), were in creased to include licensing as well as quality 
control of railway services, protection of passeng er rights, and ensuring non-discriminatory access 
charges. The agency, legally independent and financed by a percentage of track access charges, is responsible to Parliament, to which it submits an annual report. In recent years there have been 
significant efforts to liberalize the sector through alignment with the 1
st and 2nd railway package of 
EU Directives. However, the EU Commission notes that further alignment with the railway acquis is 
still necessary due, inter alia  to: the negative competitive impact of track-access charges levied on 
freight trains; lengthy procedures for licensing and safety certification, which act as a deterrent for 
railway operators to enter the market; and an am endment to the law to close the railway market 
to all except the state-owned operator until EU accession is achieved, which reverses the progress of recent years. 
Air transport 
4.89.  The country's tiny air transport sector with its two airports has gradually resumed growth 
after a period of turbulence. The Government has overhauled the institutional framework and 
concessioned the airports to a private operator. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  4.90.  The former Yugoslav Republic of Macedo nia is a mountainous and landlocked country for 
which air transport represents an important mode. There are two commercial airports in the capital Skopje and the lakeside town of Ohrid, the latter a popular tourist destination accounting for less than 10% of total traffic and mainly handli ng charter flights. With Skopje and Ohrid only 
150 km apart, the country has virtually no domestic flights. In 2008, the Government launched a 
tender for 20-year concession for the management, operation and maintenance of the two airports and the construction of a new cargo airport in Shtip. The concession was won by Turkish company 
TAV Airports Holding. In 2010, TAV Macedonia Skopje took over the operation of the Skopje and 
Ohrid airports for a period of 20 years. 
4.91.  As a result of significant investment, Skopje's (Alexander the Great) airport has been 
expanded and is being turned into a regional  hub to drive economic growth. Currently, 14 
scheduled airlines cover 20 destinations and 6 non-scheduled airlines cover 4 destinations from 
Skopje, while 6 scheduled airlines cover 3 destinations from Ohrid. The airports are under the safety oversight of the Civil Aviation Agency . Land-side services, including management and 
maintenance of runways, taxiways, airport installations, and equipment, are managed for the time 
being by the concessionaire. Further steps are being undertaken to liberalize ground-handling and other airport services.
29 Self-handling by airlines is permitted subject to specific conditions 
stipulated in the Aviation Act. 
4.92.  During the 1990s, Macedonian air traffic benefited from additional demand during the wars 
in neighbouring Bosnia and Kosovo but experienced a downturn in the wake of domestic civil strife 
at the turn of the century. The number of passe ngers reached 1 million in 1999 but fell back to 
508,000 in 2001. With the return of peace and ec onomic growth, this figure has increased to 
around 835,000 annually. There is no flag carrier in the country. 
4.93.  Regarding the regulatory and institutional framework, the former Yugoslav Republic of 
Macedonia adopted a new Aviation Act in 2006, amended in 2010, which provided for the 
establishment of an independent regulatory body the Civil Aviation Agency (CAA), to act as the 
sector regulator and to be funded by navigation, licence, and inspection charges. This entailed the 
transformation of the Civil Aviation Agency from a governmental to an independent body and a 
transfer of operational functions concerning airports and air traffic management to a separate entity, M-NAV Air navigation Service Provider. 
4.94.  The Aviation Act was amended in 2010 and 2012 to improve compliance with the 2006 
European Common Aviation Area (ECAA) requirements. Parties to the ECAA are all EU countries 
and all countries of the Western Balkans. The ECAA commits all signatories to adopt the EU acquis 
including: legislation that liberalizes market access , traffic rights, and fares; regulation on airport 
ground handling and slot allocation; safety and security regulations; rules on competition and 
state aid; and environmental standards and consumer rights pertaining to aviation. Once this package of legislation has been implemented, the we stern Balkans will be part of a fully integrated 
aviation market with a common regulatory framework spanning the European continent. In its 
most recent progress report, the EU Commission states that the Aviation Law amendment introduced national subsidies for operators with the aim of expanding tourism and air transport and that the compatibility of the amendments wi th the ECAA provisions is under examination. 
Furthermore, progress regarding the 1
st phase of the ECAA agreement30 is also being assessed. 
Overall, preparations are considered by the Commission to be "moderately advanced"31. 
4.95.  The former Yugoslav Republic of Macedo nia has bilateral air service agreements with 32 
countries. 
4.96.  During the review period, the ECAA agreement was ratified, several foreign airlines entered 
the market, increasing supply and competition, and air ticket prices declined. Despite these 
                                               
29 Ground handling has been liberalized in accordance  with the Law on Aviation, which transposes the 
EU Directive 96/67 concerning access to the ground handling market at airports. 
30 Implementation is taking place in three phases. In the first phase, 3rd and 4th freedom rights are to be 
fully liberalized i.e. all airlines licensed within the EC AA area may fly to and from their countries to any ECAA 
destination without frequency or capacity restrictio ns. In addition, a basic package of the aviation acquis  needs 
to be implemented, mainly relating  to safety and security rules.  
31 For aviation regulations developed in accordance with accepted international aviation standards and 
recommended practices,  see CAA online information. Viewed at: http://www.caa.mk/ . WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  encouraging signs, transport of exports and im ports by air remains among the lowest in the 
region. Poor international connections and relatively high passenger fares are significant constraints for Macedonian air cargo and passenger traffic. More frequent and cheaper flights could 
generate more air traffic, reduce business costs, and increase tourism and migrants' visits home. 
The former Yugoslav Republic of Macedonia may need to liberalize ground-handling and other 
airport services, and become a full member of the Joint Aviation Authorities (JAA), whose functions 
have been/are being transferred to the Eu ropean Aviation Safety Agency (EASA). 
4.5.5  Tourism 
4.97.  More frequent and cheaper flights would help promote tourism, which remains one of the 
growth sectors in the world economy and is a sign ificant driver of growth in many developing 
countries. The former Yugoslav Republic of Macedonia's tourism industry accounts for about 2% of 
GDP and grew during the review period. Inbound tourism generates around 6% of the country's 
services exports and government revenue from the tourism sector is worth €186 million annually. Employment in the tourism sector in 2010 was estimated at around 20,000, the great majority in 
hotels and restaurants. Tourism employment cont ributes over 3% of total employment, remaining 
broadly constant during the period under review. 
4.98.  The number of tourists (defined as international arrivals) remains relatively small in regional 
terms, numbering over 350,000 in 2012 (Table 4.10). While the number of inbound tourists has 
grown quite strongly, international travel receipts have increased only modestly and the average receipt amount per tourist declined from $841 to $733 between 2009 and 2011 and declined in absolute terms in 2012. 
Table 4.10 Tourism indicators, selected years 
 2007  2009  2011 2012  
International arrivals ('000) 230.1 259.2 327.5 351.4 
Total nights spent ('000) 518.1 538.8 755.2 811.7 
International travel receipts (US$ million) .. 217.8 239.4 233.1 
.. Not available. 
Source: Information provided by the authorities. 
4.99.  In the Ministry of Economy, the Departme nt for Tourism and Catering is responsible for 
devising and implementing strategies and policies in  tourism, including compliance with the sector 
legislation and categorization of tourist facilities. Tourism services are regulated by the Law on 
Tourism Activity and the Law on Catering Activity. Legislation is largely harmonized with European legislation, (EU Directive 90/314), covering: travel arrangements, inclusion of service quality 
criteria in contracts between service providers and consumers, and consumer protection. A licence 
is required in order to operate in the tourism sector, and any foreign or domestic legal entity may establish a tourism agency or enterprise. The Government's National Tourism Development Strategy 2009-2015, envisages the development of different types of tourism: wine tourism, rural 
and lake tourism, culture tourism, and mountain sport-based tourism. 
4.100.  The budget of the Department is €75,000 and is drawn from the national budget. In 2008, 
the Agency for the Promotion and Support of Tourism was established as a government 
organization with the aim of attracting tourists to the country, mostly through marketing and 
promotion. The agency's  budget is €2.4 million and is support ed by an accommodation tax. The 
Government provides incentive programmes to encourage tourism development by subsidizing 
tour operators and travel agencies offering complete tourism packages.
32 In 2011, the 
Government reduced the rate of VAT applic able to accommodation from 18% to 5%. 
                                               
32 WTO document G/SCM/N/220/MKD. See also OG  11/2013. The annual amount of the subsidy is 
MDen 60 million for 2013, to cover activities such as: bus transfer, air transfer, and group tours. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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at:http://www.customs.gov.mk/en/Uploads/S trategic%20plan%202012%20-%202014.pdf . 
 
European Bank for Reconstruction and Development (2012), Electronic Communication Sector 
Comparative Assessment: FYR Macedonia - Country Summary . Viewed at: 
http://www.ebrd.com/downloads/legal /telecomms/fyr-macedonia-2012.pdf . 
 
European Commission (2012), Former Yugoslav Republic of Macedonia 2012 Progress Report , 
Commission Staff Working Document SWD (2012) 332 final, Brussels. Viewed at:  http://ec.europa.eu/enlargement/pdf/key_doc uments/2012/package/mk_rapport_2012_en.pdf . 
 
IMF (2012), Former Yugoslav Republic of Macedonia 2011 Article IV Consultatio n, Country Report 
No. 12/133, p. 7. Viewed at: http://www.imf.org/external/pubs/ft/ scr/2012/cr12133.pdf . 
 
IMF (2013), Former Yugoslav Republic of Macedonia 2013 Article IV Consultation and First Post-
Program Monitoring Discussions , IMF Country Report No. 13/178. Viewed at: 
http://www.imf.org/external/p ubs /ft/scr/2013/cr13178.pdf . 
 
Ministry of Agriculture, Forestry and Water Economy (2012), Strategic Framework of the National 
Strategy for Agriculture and Rural Development from 2014-2020 , (unpaginated). Skopje 
 
Ministry of Economy (2009), Industrial Policy of the Republic of Macedonia 2009–2020 . Skopje. 
 
Ministry of Economy (2011), Programme for Stimulating Investment in the Republic of Macedonia 
2011-2014 . Skopje.  
 
Ministry of Finance (2012), Pre-Accession Economic Programme 2012-2014 . Viewed at: 
http://www.finance.gov.mk/files/u1/pre_acce ssion_economic_progr amme_2012_2014.pdf .  
 
Ministry of Transport and Communications (2007), National Transport Strategy for the Republic of 
Macedonia 2007-2017 . Viewed at: 
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%202017%20ENG.pdf . 
 
OECD (2010), Investment reform Index 2010, Monitoring Policies and Institutions for Direct 
Investment in South-East Europe . Viewed at: http://dx.doi.org/10.1787/%209789264079588-en. 
 
State Statistical Office (2012), Macedonia in Figures 2012, “Foreign trade by SITC sector”.  Viewed 
at: http://www.stat.gov.mk/Publikacii/Mak_Brojki_2012_A.pdf . 
 
Stojilovska, A. (2012), “The Story of the Macedonian heat market - how to reform it?”, Policy 
paper of the Czech Association for International Affairs. Viewed at: http://pasos.org/wp-
content/uploads/2012/06/pp2012-stojilovska-macedonia-energy.pdf . 
 
UNCTAD (2012), Investment Policy Review of The former Yugoslav Republic of Macedonia . Viewed 
at: http://unctad.org/en/PublicationsLibrary/diaepcb2011d3_en.pdf . 
 
USAID (2012a), Competiveness Project Final Report , 12 July. Viewed at: 
http://macedonia.usaid.gov/Documents/ grants/092012/MCP%20Final%20Report.pdf .  
 
USAID (2012b), Macedonia High Level Financial Sector Overview . Viewed at: 
http://www.pfsprogram.org/sites/d efault/files/Macedonia_High_Le vel_Financial_Se ctor_Overview_
Oct_2012.pdf . 
 
World Bank (2009), Macedonia Competitiveness Assessment Policy Note 1, Making Exports a 
Catalyst for Economic Growth . Viewed at: http://siteresources.worldbank.org/ 
INTMACEDONIA/Resources/TradePolicyPresenation.pptx .  
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- 81 - 
 
  World Bank (2011a), Barriers to Trade in Services in the CEFTA Region . Viewed at: 
http://siteresources.worldbank.org/ECAEXT/Reso urces/BarrierstoTradeinServicesintheCEFTA%20R
egion.pdf  
 
World Bank (2011b), Macedonia Competitiveness Assessment Policy Note 1 – Powerpoint 
Presentation - Making Exports a Catalyst for Economic Growth . Viewed at: http://siteresources. 
worldbank.org/INTMACEDONIA/Resources/TradePolicyPresenation.pptx . 
 
World Bank (2012a), Connecting to Compete 2012: Trade Logistics in the Global Economy - The 
Logistics Performance Index and its Indicators . Viewed at:  
http://documents.worldbank.org/curated/en/2012/11/16926571/macedonia-country-partnership-
strategy-progress-report-period-fy11-14  
 
World Bank (2012b), Country Partnership Strategy Progress Report for the Republic of Macedonia 
for the Period FY11-FY14 . Viewed at:  http://documents.worldbank.org/ 
curated/en/2012/11/16926571/macedonia-country-p artnership-strategy-progress-report-period-
fy11-14. 
 
World Bank (2012c), Macedonia, former Yugoslav Republic of - First Phase of the Competitiveness 
Development Policy Lending Project . Viewed at: 
http://documents.worldbank.org/curated/en/2012/10/16864116/macedonia-former-yugoslav-
republic-of-competitiveness-dpl  
. 
 
World Bank (2013), Doing Business 2013: Smarter Regulations for Small and Medium-Size 
Enterprises . Viewed at: 
http://www.doingbusiness.org/~/media/GIAW B/Doing%20Business/Documents/Annual-
Reports/English/DB13-full-report.pdf . WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  5  APPENDIX TABLES 
Table A1. 1 Merchandise exports by group of products, 2006-12 
(€ million and %) 
  2006  2007  2008  2009  2010 2011 2012  
Total export 1,913.4  2,453.4  2,697.6  1,937.9  2,530.3 3,203.4 3,113.4  
 (% of total)  
Total primary products 30.5  23.9 28.4 22.9 31.9 29.1 28.2  
  Agriculture 16.8 14.4 14.2 18.7 16.8 14.8 15.5 
   Food 16.1  13.7 13.7 18.2 16.3 14.1 14.9  
   1211 Tobacco, not  
   stemmed/stripped 3.8 2.6 2.4 2.9 2.8 2.6 3.0 
   1121 Wine of fresh grapes (including 
   fortified wine) 1.9 1.8 1.5 2.0 1.5 1.4 1.8  
   0484 Bread, baked goods 0.7 0.8 0.9 1.4 1.3 1.1 1.2 
  Agricultural raw material 0.8  0.7 0.5 0.5 0.5 0.6 0.6  
Mining 13.6 9.5 14.2 4.2 15.1 14.3 12.6 
  Ores and other minerals 3.9  4.3 6.2 2.8 7.1 5.8 5.9  
   2874 Lead ores and concentrates 0.2 0.6 1.9 0.0 2.0 1.6 1.6 
   2831 Copper ores and concentrates 0.8  0.8 1.1 0.0 1.5 1.3 1.5  
  Non-ferrous metals 0.3 0.3 0.2 0.3 0.2 0.2 0.4 
  Fuels 9.4  4.9 7.8 1.1 7.7 8.4 6.4  
   3510 Electric energy 0.6 0.1 0.0 0.2 1.0 1.0 1.0 
Manufactures 69.4  76.0 71.5 50.9 68.1 70.9 71.8  
  Iron and steel 27.8 37.6 32.3 6.3 23.2 22.7 20.8 
6715 Other ferro-alloys (excl. radio- 
active ferro-alloys) 10.5 18.4 11.8 1.1 10.3 11.5 11.5  
6732 Flat, hot-rolled products,  
iron/steel, not clad/plated/coated 0.0 5.8 9.7 0.8 5.2 4.9 3.3 
6794 Other tubes, pipes, and hollow  
profiles, iron/steel 3.1 3.2 3.6 1.7 2.6 2.5 2.3  
6743 Flat-rolled iron/steel products, 
painted/varnished, etc. 1.0 1.2 1.2 0.9 1.5 1.0 1.3 
Chemicals 4.2  3.9 4.6 4.5 11.4 16.7 17.0  
5988 Catalysts and catalytic  
preparations, n.e.s. 0.0 0.0 0.0 0.2 6.6 12.2 12.3 
5429 Medicaments, n.e.s.  1.6 1.4 1.6 0.1 1.7 1.4 1.6  
  Other semi-manufactures 5.5 5.4 6.1 5.6 4.4 3.4 3.2 
Machinery and transport equipment 4.9  4.5 4.7 5.3 5.9 7.9 9.9  
Power generating machines  0.1 0.1 0.1 0.2 0.0 0.0 0.0 
Other non-electrical machinery 0.7  0.9 0.9 1.3 1.7 3.1 5.2  
7436 Filtering and purifying  
machines for liquids/gases 0.0 0.0 0.0 0.0 0.7 2.3 4.4 
Agricultural machinery and tractors 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
Office machines & telecommunication 
equipment 0.1 0.2 0.3 0.3 0.3 0.3 0.3 
Other electrical machines 2.5  2.0 2.3 2.5 2.8 3.5 3.3  
7726 Electric control panels 0.1 0.0 0.1 0.5 1.4 1.8 2.0 
   Automotive products 1.0  0.9 0.8 0.7 0.8 0.6 0.8  
   Other transport equipment 0.5 0.4 0.4 0.3 0.3 0.3 0.3 
Textiles 1.9  1.5 1.4 1.7 1.7 1.3 1.5  
Clothing 21.2 18.9 18.0 21.7 16.8 14.8 14.9 
   8415 Shirts 3.7  3.3 3.0 3.4 2.6 2.4 2.3  
   8427 Blouses/shirts,  
   women´s/girls´, not  
   knitted/crocheted 4.6 4.1 3.5 4.2 2.8 2.2 2.1 
   8426 Trousers, breeches, etc., 
   women's/girls´, not     knitted/crocheted 2.5
 2.2 1.8 2.3 1.9 1.7 1.7  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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    2006  2007  2008  2009  2010 2011 2012  
   8414 Trousers, bib and brace  
   overalls, breeches and shorts 1.3 1.4 1.5 1.9 1.5 1.4 1.4 
   8413 Jackets and blazers, 
   men's/boys', not knitted or    crocheted 1.3
 1.0 1.1 1.4 1.0 0.8 1.0  
   Other consumer goods 4.0 4.2 4.4 5.9 4.6 4.0 4.3 
Other 0.2  0.1 0.1 26.2 0.1 0.1 0.0  
 
Source: UNSD, Comtrade database (SITC Rev.3) and st atistics provided by the authorities for year 2008. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Table A1. 2 Merchandise imports by group of products, 2006-12 
(€ million and %) 
  2006  2007  2008  2009  2010 2011 2012  
Total imports 2,998.9 3,821.4 4,679.7 3,631.0 4,133.2 5,038.2 5,065.5 
 (% of total) 
Total primary products 37.0 37.4 37.8 21.0 38.2 44.1 46.0 
Agriculture 12.9 12.6 11.9 14.4 13.5 12.8 13.9 
  Food 11.7 11.6 11.0 13.2 12.4 11.8 13.0 
    0123 Poultry, meat and offal 0.6 0.7 0.6 0.9 0.8 0.7 0.9 
    4215 Sunflower seed or safflower oil, 
    and their fractions 0.6 0.6 0.7 0.6 0.7 0.7 0.9 
    0989 Food preparations, n.e.s. 0.7 0.7 0.7 0.9 0.8 0.7 0.7 
      Agricultural raw material 1.2 1.0 0.9 1.2 1.1 1.0 0.9 
Mining 24.1 24.8 26.0 6.5 24.8 31.4 32.2 
     Ores and other minerals 2.2 4.5 4.0 0.4 4.0 4.1 3.5 
      2841 Nickel ores and concentrates 1.0 2.4 1.4 0.0 2.0 1.8 2.2 
      2823 Other ferrous waste and 
      scrap 0.0 0.0 0.0 0.0 1.3 1.4 0.7 
      Non-ferrous metals 1.8 1.6 1.2 1.0 3.1 6.8 7.3 
    6812 Platinum unwrought, unworked 
    or semi-manufactured 0.0 0.0 0.0 0.0 2.0 5.5 6.2 
    Fuels 20.2 18.7 20.7 5.2 17.7 20.5 21.3 
    3510 Electric energy 1.7 4.8 5.1 2.4 2.1 3.3 3.9 
    3330 Crude oils of petroleum and  
    bituminous minerals 14.3 10.9 12.3 0.0 9.6 8.2 3.5 
    3432 Natural gas, in the gaseous 
    state 0.6 0.5 0.7 0.6 0.8 0.9 1.1 
Manufactures 62.8 62.5 62.1 62.2 61.6 55.7 53.8 
   Iron and steel 9.9 10.4 11.1 6.0 6.5 6.2 5.7 
    6762 Bars/rods (not 676.1) 
    iron/steel, hot-rolled, etc. 0.0 0.4 0.6 0.6 0.5 0.8 0.7 
  Chemicals 9.7 9.2 8.9 11.2 12.1 11.8 11.3 
    5429 Medicaments, n.e.s. 1.0 0.8 1.0 1.4 1.3 1.2 1.3 
    5334 Paints and varnishes; plastics 
    in solution; etc. 0.3 0.3 0.3 0.3 0.3 1.0 0.9 
    5243 Metallic acid salts, compounds 
    of precious metals 0.0 0.0 0.0 0.2 2.1 1.3 0.8 
    5542 Surface-active agents (excl. 
    soap) 0.7 0.6 0.5 0.7 0.6 0.6 0.6 
  Other semi-manufactures 9.0 8.2 7.9 9.1 8.3 8.0 8.4 
    6639 Articles of ceramic materials, 
    n.e.s. 0.0 0.0 0.0 0.0 0.3 0.5 0.7 
   Machinery and transport equipment 18.3 19.8 21.0 20.6 20.2 16.9 15.8 
    Power generating machines 0.3 0.4 1.2 0.3 0.6 0.5 0.6 
  Other non-electrical machinery 5.2 5.4 5.6 6.2 4.6 4.5 4.4 
     Agricultural machinery and tractors 0.3 0.5 0.4 0.4 0.4 0.3 0.3 
    Office machines &  
    telecommunication equipment 4.0 4.8 4.7 4.7 4.8 3.7 4.0 
     7643 Radio or television 
     transmission apparatus 1.0 0.8 0.9 0.3 0.8 0.7 0.8 
  Other electrical machines 2.6 2.8 2.7 3.3 2.9 3.0 2.5 
    Automotive products 5.0 5.6 6.0 5.5 6.4 4.7 3.9 
    7812 Motor vehicles for the  
    transport of persons, n.e.s. 3.5 3.6 3.7 3.4 4.4 2.7 2.1 
    Other transport equipment 1.3 0.7 0.9 0.6 0.8 0.5 0.5 
Textiles 9.0 8.1 6.8 7.7 7.5 6.8 6.7 WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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    2006  2007  2008  2009  2010 2011 2012  
   6523 Other fabrics of 85% finished 
   cotton <200g/m2 1.8 1.6 1.2 1.3 1.3 1.2 1.1 
   6552 Other knitted/crocheted 
   fabrics, not impregnated/coated, etc. 0.6 0.6 0.6 0.7 0.8 0.8 0.9 
Clothing 1.7 1.5 1.3 1.5 1.2 1.0 1.0 
Other consumer goods 5.2 5.2 5.1 6.2 5.9 5.0 4.9 
Other 0.1 0.1 0.1 16.8 0.1 0-2 0.1 
 
Source: UNSD, Comtrade database (SITC Rev.3). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Table A1. 3 Merchandise expo rts by destination, 2006-12 
(€ million and %) 
  2006 2007  2008  2009  2010 2011 2012  
Total exports (€ million) 1,913.4 2,453.4  2,697.6  1,937.9  2,530.3 3,203.4 3,113.4  
 (% of total) 
America 1.0 1.6 0.3 0.4 0.5 1.1 1.7 
United States 0.9 1.5 0.3 0.4 0.4 0.8 1.4 
Other America 0.1 0.1 0.1 0.1 0.1 0.3 0.3 
Europe 96.8 96.5 96.3 95.6 94.3 90.5 89.7 
EU (27) 61.2 65.1 59.5 56.2 61.8 60.6 62.8 
Germany 15.6 14.4 14.2 16.7 21.3 27.9 29.4 
Bulgaria 5.4 7.2 9.5 8.1 8.8 6.9 7.1 
Italy 9.9 10.3 8.1 8.1 7.0 6.5 6.9 
Greece 15.0 12.5 13.3 10.8 7.3 4.8 4.7 
Slovenia 1.7 2.0 1.6 1.3 2.1 2.0 1.9 
Slovakia 0.1 0.2 0.3 0.4 1.0 1.5 1.8 
Netherlands 2.3 2.1 1.8 2.3 2.1 2.0 1.6 
United Kingdom 1.5 2.2 1.8 1.6 1.8 1.2 1.6 
Romania 0.6 0.6 0.8 0.7 1.6 1.0 1.3 
Austria 0.6 0.6 0.6 0.7 1.1 0.9 1.2 
Spain 2.1 5.2 1.9 1.4 2.2 1.5 1.2 
Belgium 3.5 5.3 2.8 1.3 2.4 1.4 1.0 
Czech Rep. 0.4 0.3 0.4 0.3 0.5 0.5 0.9 
EFTA 0.4 0.3 0.4 0.7 0.6 0.7 0.8 
Switzerland 0.4 0.3 0.4 0.6 0.6 0.7 0.8 
CEFTA 32.8 29.5 35.5 37.2 30.4 27.6 24.4 
Serbia 23.2 19.1 23.4 24.2 21.2 19.6 17.2 
Croatia 5.2 4.9 5.8 5.7 3.7 3.1 2.5 
Bosnia Herzegovina 2.7 2.6 2.6 3.2 2.5 2.1 2.1 
Albania 1.7 2.2 2.7 3.1 2.2 2.0 1.9 
Other Europe 2.3 1.6 0.8 1.5 1.5 1.6 1.7 
Turkey 2.3 1.6 0.8 1.5 1.5 1.6 1.7 
Commonwealth of 
Independent States (CIS)a 1.2 0.9 1.1 1.3 1.6 3.2 1.5 
Africa 0.2 0.2 0.2 0.3 0.1 0.1 0.1 
Middle East 0.4 0.1 0.2 0.2 0.4 0.4 0.4 
Asia 0.4 0.7 2.0 2.2 3.0 4.7 6.6 
China 0.1 0.0 0.0 0.1 2.7 2.9 4.0 
Japan 0.1 0.0 0.0 0.1 0.0 0.0 0.0 
Six East Asian Traders 0.1 0.4 1.8 0.5 0.1 1.3 1.8 
Korea, Rep. of 0.1 0.0 0.0 0.1 0.1 0.4 1.4 
Other Asia 0.2 0.2 0.1 1.4 0.2 0.5 0.8 
 
a Republic of Moldova included in CEFTA for calculation purposes. 
 Source: UNSD, Comtrade database (SITC Rev.3) and st atistics provided by the authorities for year 2008. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
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  Table A1. 4 Merchandise imports by origin, 2006-12 
(€ million and %) 
  2006  2007  2008  2009  2010 2011 2012  
Total imports 2,998.9  3,821.4  4,679.7  3,631.0  4,133.2 5,038.2 5,065.5  
 (% of total)  
America 3.9  3.9 4.2 4.8 4.2 3.6 3.3  
United States 1.1 1.5 1.5 2.2 1.9 1.3 1.3 
Other America 2.8  2.4 2.8 2.6 2.3 2.3 2.0  
Europe 68.5 67.2 67.5 71.6 71.4 73.2 77.1 
EU(27) 52.9  49.5 48.1 52.2 53.2 54.3 58.4  
Greece 8.5 7.9 7.5 8.7 8.2 8.1 12.3 
Germany 9.8  10.0 9.5 10.3 11.2 10.4 9.7  
United Kingdom 1.0 1.0 1.0 1.2 5.2 8.4 8.6 
Bulgaria 6.6  5.1 4.8 4.8 5.5 6.5 6.3  
Italy 6.0 5.8 5.6 7.2 6.1 6.0 6.1 
Slovenia 3.4  3.0 3.0 3.8 3.0 2.6 2.3  
Romania 2.4 1.8 1.7 2.1 2.3 1.3 1.8 
Austria 2.1  1.9 1.7 2.0 1.7 1.9 1.8  
Poland 3.1 3.1 3.9 1.7 1.3 1.2 1.5 
France 1.8  1.7 1.8 1.8 1.6 1.8 1.3  
Spain 1.4 1.0 0.8 1.0 1.1 0.9 1.2 
Czech Rep. 0.9  1.2 1.0 1.0 0.9 0.9 1.1  
EFTA 1.6 2.3 4.3 2.5 1.9 2.5 2.3 
Switzerland 1.6  2.2 4.3 2.4 1.8 2.5 2.3  
CEFTA 10.6 11.7 11.1 11.9 11.5 11.4 11.4 
Serbia 7.5  8.6 7.8 8.1 8.1 7.6 7.8  
Croatia 2.1 2.1 2.0 2.3 2.1 1.9 1.9 
Bosnia and Herzegovina 0.7  0.7 0.8 0.9 0.9 1.3 1.1  
Other Europe 3.3 3.7 3.9 5.0 4.8 4.9 5.0 
Turkey 3.3  3.7 3.9 5.0 4.8 4.9 5.0  
Commonwealth of Independent States 
(CIS)a 18.5 16.6 17.2 11.6 12.3 12.1 7.1 
Russian Federation 15.1  12.3 13.6 9.8 10.1 9.8 5.5  
Ukraine 2.8 2.0 3.0 1.7 2.1 2.2 1.3 
Africa 0.4  0.7 0.6 0.3 0.6 0.6 0.4  
Middle East 0.5 0.4 0.5 0.6 0.5 0.5 0.5 
Asia 8.2  11.2 10.0 11.1 11.1 10.1 11.6  
China 3.7 4.6 4.6 5.7 5.3 5.1 5.8 
Japan 0.7  0.8 0.8 1.1 0.8 0.7 0.7  
Six East Asian Traders 2.0 2.3 2.0 2.0 1.9 1.8 1.6 
Other Asia 1.8  3.4 2.6 2.2 3.1 2.5 3.5  
Indonesia 1.1 2.6 1.6 1.0 1.1 1.1 1.8 
Other 0.0  0.0 0.0 0.0 0.0 0.0 0.0  
 
a Republic of Moldova included in CEFTA for calculation purposes. 
 Source: UNSD, Comtrade database (SITC Rev.3). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 88 - 
 
  Table A1. 5 Foreign direct investment 
(€ million) 
  2006  2007  2008  2009  2010 2011 2012  
Agriculture, forestry and fishing 2.1 10.5 4.1 0.1 1.0 2.7 0.8 
Mining and quarrying 0.6 8.9 70.2 -5.8 42.1 43.5 -67.5 
Manufacturing 99.4 126.8 -15.5 48.4 85.1 208.6 42.6 
  Food products, beverages and tobacco 
products 5.5 21.8 .. 34.0 13.5 48.5 -27.5 
  Textiles & wood activities 7.6 9.4 .. 4.2 8.5 28.6 19.5 
  Petroleum, chemicals, pharmaceutical 
products, rubber & plastic products 21.5 27.3 .. 4.5 -0.1 2.5 -0.5 
  Metal & machinery products 42.5 88.2 .. -47.2 -13.1 39.7 28.4 
  Vehicles & other transport equipment 1.1 0.3 .. 54.7 69.1 88.9 -0.3 
  Other manufacturing 21.2 -20.2 .. -2.0 7.3 0.4 22.9 
Electricity, gas and water 119.2 -3.6 26.2 24.3 1.0 4.3 60.8 
Construction 3.3 14.8 20.5 10.0 17.6 21.3 -3.9 
Services 118.9 339.0 295.2 69.4 13.2 56.5 -11.3 
  Wholesale and retail trade; repair of motor 
  vehicles and motorcycles .. .. .. .. 22.2 22.2 -6.1 
  Transportation and storage .. .. .. .. 3.5 24.8 4.0 
  Accommodation and food service activities .. .. .. .. 5.9 0.6 0.8 
  Information and communication .. .. .. .. 10.3 -79.4 1.4 
  Financial and insurance activities .. .. .. .. -24.5 67.6 -15.7 
  Real estate activities .. .. .. .. -4.9 8.0 0.2 
  Professional, scientific and technical activities .. .. .. .. 6.0 -2.3 0.5 
  Administrative and su pport service activities .. .. .. .. 6.3 1.6 4.4 
  Education .. .. .. .. -0.1 0.5 0.0 
  Human health and social work activities .. .. .. .. 1.7 21.3 -0.1 
  Arts, entertainment and recreation .. .. .. .. -13.6 -8.5 -1.0 
  Other service activities .. .. .. .. 0.4 -0.1 0.2 
Non-allocated 1.3 9.6 0.0 -1.5 -0.1 -0.1 1.0 
Subtotal 343.5 496.4 400.8 146.5 160.1 336.9 21.4 
  Private purchases and sales of real estate .. .. -0.9 .. 0.0 0.0 0.0 
  Undistributed-reinvested earnings and part of 
other capital .. .. .. .. .. .. 82.4 
TOTAL 344.8  506.0  399.0  145.0  160.0 336.8 104.8  
 
.. Not available.  Source: Information provided by the authorities and the National Bank of the Republic of Macedonia. Viewed 
at: http://www.nbrm.mk/ (Access to data on 10 April 2013). WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 89 - 
 
  Table A3. 1 Non-ad valorem tariffs under applied MFN regimes by HS 2-digit level 
Descriptions No. of tariff 
lines 
Total lines 312 
     Mixed duty rate 310 
     Compound rate 2 
of which:  
     HS 01 Live animals 3 
     HS 02 Meat and edible meat offal 50 
     HS 03 Fish and crustaceans, molluscs and other aquatic invertebrates 16 
     HS 04 Dairy produce 47 
     HS 07 Edible vegetables  and certain roots and tubers 16 
     HS 08 Edible fruit and nuts ; peel of citrus fruit or melons 11 
     HS 10 Cereals 3 
     HS 11 Products of the milling indu stry; malt; starches; inulin; wheat gluten 3 
     HS 15 Animal or vegetable fats and oils 8 
     HS 16 Preparations of meat, of fish  or of crustaceans, molluscs or other  
     aquatic invertebrates 14 
     HS 17 Sugars  and sugar confectionery 9 
     HS 18 Cocoa and cocoa preparations 11 
     HS 19 Preparations of cereals, flour,  starch or milk; pastry cooks' products 20 
     HS 20 Preparations of vegetabl es, fruit, nuts or other parts of plants 91 
     HS 21 Miscellaneous edible preparations 8 
     HS 23 Residues and waste from the food industries; prepared animal fodder 2 
 
Source:  Tariff information provided by the authorities. WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 90 - 
 
  Table A3. 2 Tariff quotas under FTAs, 2012 
(US$ million and %) 
Origin of imports Estimated value of 
imports subject to 
tariff quotas Value of total imports Share in total imports 
of TQs (%) 
Croatia 20.9 120.8 17.3 
EU 82.6 3,800.5 2.2 
Moldova 0.1 0.7 8.9 
Norway 0.0 3.6 0.0 
Switzerland 0.0 148.0 0.0 
Turkey 9.6 324.0 3.0 
Ukraine 0.0 86.9 0.0 
 
Note: No tariff quotas for Serbia.  Source: UN Comtrade and State Statis tical Office's database. Viewed at: 
http://makstat.stat.gov.mk/PXWeb2007Bazi/Dialog/statfile1.asp . 
 
  
  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 91 - Table A4. 1 Applied MFN tariff averages by HS2-digit level, 2004 and 2013 
HS 
code Product descriptions 2004  2013 
No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%)  No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%) 
Total 10,360 11.1 0-70.1 23.3  9,629  8.5 0-70 40.0 
HS 01-HS 24 2,416 19.5 0-70.1 12.8  2,540  15.1 0-70 35.4 
HS 25-HS 97 7,944 8.6 0-31 26.5  7,089  6.1 0-25 41.7 
             
1. Live animals 57 10.0 0-66 49.1  73 9.2 0-66 46.6 
2. Meat and edible meat offal 232 16.8 0-54 0.9  248 16.0 0-40 0.8 
3. Fish and crustaceans, molluscs and other aquatic invertebrates 323 9.0 0-63.5 0.6   427 2.1 0-62 90.9 
4. Dairy produce; birds' eggs; natural honey; edible products of 
animal origin, not elsewhere specified or included 177 19.4 5-66 0.0  174 18.3 0-53.1 0.6 
5. Products of animal origin, not elsewhere specified or included 21 0.0 0 100.0  20 0.0 0 100.0 
6. Live trees and other plants;  bulbs,  roots and the like;  cut flowers 
and ornamental foliage 48 11.7 0-35 4.2  48 11.7 0-35 20.8 
7. Edible vegetables and certain roots and tubers 119 30.6 0-65 12.6  124 28.9 0-65 15.3 
8. Edible fruit and nuts; peel of citrus fruit or melons 129 19.7 0-50 6.2  125 18.0 0-50 7.2 
9 Coffee, tea, maté and spices 42 7.6 0-45 61.9  50 6.3 0-45 70.0 
10. Cereals 61 22.5 0-70.1 16.4  67 20.8 0-59.5 25.4 
11. Products of the milling industry; malt; starches; inulin; wheat 
gluten 86 9.7 0-55 4.7  73 9.9 0-52 5.5 
12. Oil seeds and oleaginous fruits;  misc grains, seeds and fruit; 
industrial or medicinal plants; straw and fodder 81 2.5 0-15 49.4  74 1.3 0-10 82.4 
13. Lac;  gums, resins and other vegetable saps and extracts 20 0.0 0 100.0  16 0.0 0 100.0 
14. Vegetable plaiting materials; ve getable products not elsewhere 
specified or included 8 0.0 0 100.0  5 0.0 0 100.0 
15. Animal or vegetable fats and oils and their cleavage products; 
prepared edible fats; animal or vegetable waxes 126 3.8 0-38.9 69.1  128 3.0 0-40 73.4 
16. Preparations of meat, of fish or of crustaceans, molluscs or other 
aquatic invertebrates 94 12.6 5-40.5 0.0  97 7.1 0-35.7 57.7 
17. Sugars and sugar confectionery 47 17.7 0-40 4.3  44 10.4 0-30 18.2 
18. Cocoa and cocoa preparations 27 25.2 0-39.5 22.2  27 18.3 0-34.9 22.2 
19. Preparations of cereals, flour,  starch or milk;  pastry cooks' 
products 52 36.3 0-54.9 1.9  52 27.8 0-46 3.9  
  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 92 - HS 
code Product descriptions 2004  2013 
No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%)  No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%) 
20. Preparations of vegetables, fruit,  nuts or other parts of plants 338 34.5 5-67.5 0.0  346 28.8 0-70 4.3 
21. Miscellaneous edible preparations 46 26.0 0-66.5 4.4  42 21.8 0-63 4.8 
22. Beverages, spirits and vinegar 179 42.7 0-53.4 1.7  186 29.2 0-50 39.3 
23. Residues and waste from the f ood industries; prepared animal 
fodder 67 6.1 0-48.3 34.3  66 4.6 0-30 33.3 
24. Tobacco and manufacture d tobacco substitutes 36 22.2 10-60 0.0  28 28.8 10-60 0.0 
25. Salt;  sulphur; eart hs and stone;  plasteri ng materials, lime and 
cement 90 6.6 0-21 40.0  78 4.8 0-15 47.4 
26. Ores, slag and ash 47 2.2 0-20 61.7  44 2.3 0-20 61.4 
27. Mineral fuels, mineral oils and products of their distillation;  
bituminous substanc es; mineral waxes 112 7.4 0-20 19.6  114 8.0 0-20 22.8 
28. Inorganic chemicals;  organic or inorganic compounds of precious 
metals, of rare-earth metals, of ra dioactive elements or of isotopes 266 3.1 0-8.4 34.2  248 3.0 0-5 35.1 
29. Organic chemicals 546 2.5 0-12.4 45.1  473 2.2 0-6 51.2 
30. Pharmaceutical products 59 1.6 0-25 71.2  59 1.3 0-25 81.4 
31. Fertilizers 37 1.9 0-6 67.6  33 0.0 0 100.0 
32. Tanning or dyeing extracts; tanni ns and their derivatives; dyes, 
pigments and other colouring matt er; paints and varnishes; putty 
and other mastics; inks 65 4.4 0-14.6 43.1  57 2.9 0-6.5 49.1 
33. Essential oils and resinoids;  perfumery, cosmetic or toilet 
preparations 59 6.7 0-17.6 52.5  48 2.7 0-6.5 58.3 
34. Soap, organic surface-active ag ents, washing preparations, 
lubricating preparations, artifi cial waxes, prepared waxes, 
polishing or scouring preparations, candles and similar articles, 
modelling pastes, dental waxes an d dental preparations with a 
basis 37 10.1 0-29.3 32.4  31 4.1 0-6.5 35.5 
35. Albuminoidal substances;  modified starches;  glues;  enzymes 32 2.5 0-9.4 15.6  32 0.8 0-6.5 75.0 
36. Explosives;  pyrotechnic products;  matches;  pyrophoric alloys;  
certain combustible preparations 10 6.0 0-11 40.0  10 3.8 0-6.5 40.0 
37. Photographic or cinematographic goods 58 6.4 0-8.6 15.5  43 4.8 0-6.5 14.0 
38. Miscellaneous chemical products 136 5.8 0-25 24.3  161 3.5 0-25 58.4 
39. Plastics and articles thereof 264 8.4 0-25.3 22.7  215 4.1 0-6.5 25.1 
40. Rubber and articles thereof 118 6.1 0-21 44.1  103 5.9 0-15 40.8 
41. Raw hides and skins (other than furskins) and leather 79 5.9 0-13 24.1  73 6.1 0-13 21.9 
42. Articles of animal gut (other than silk-worm gut) 38 23.8 7-27.5 0.0  37 16.2 7-25 0.0  
  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 93 - HS 
code Product descriptions 2004  2013 
No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%)  No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%) 
43. Furskins and artificial fur; manufactures thereof 39 16.7 3-28.4 0.0  23 13.3 3-25 0.0 
44. Wood and articles of wood; wood charcoal 166 4.1 0-25.2 69.3  179 1.2 0-18 90.5 
45. Cork and articles of cork 13 5.9 0-13 15.4  12 6.4 0-13 8.3 
46. Manufactures of straw, of esparto or  of other plaiting materials;  
basketware and wickerwork 12 15.0 15 0.0  23 15.0 15 0.0 
47. Pulp of wood or of other fibr ous cellulosic material;  recovered 
(waste and scrap) paper and paperboard 23 0.0 0 100.0  24 0.0 0 100.0 
48. Paper and paperboard;  articles of paper pulp, of paper or of 
paperboard 179 7.1 0-24 27.4  151 1.8 0-15 83.4 
49. Printed books, newspapers, pict ures and other products of the 
printing industry;  manuscri pts, typescripts and plans 25 8.4 0-22 40.0  22 1.8 0-10 81.8 
50. Silk 26 0.5 0-6 88.5  25 0.5 0-6 88.0 
51. Wool, fine or coarse animal hair;  horsehair yarn and woven fabric 70 6.9 0-19.8 35.7  60 3.5 0-12 65.0 
52. Cotton 163 9.2 0-26 3.7  149 6.6 0-20 35.6 
53. Other vegetable textile fibres;  paper yarn and woven fabrics of 
paper yarn 43 0.0 0 100.0  34 0.0 0 100.0 
54. Man-made filaments 86 5.3 0-15.8 48.8  85 4.9 0-10 50.6 
55. Man-made staple fibres 167 9.3 0-15 1.8  143 6.6 0-12.5 32.2 
56. Wadding, felt and nonwovens; specia l yarns; twine, cordage, ropes 
and cables and articles thereof 66 8.9 0-15.4 1.5  57 8.6 0-12.5 1.8 
57. Carpets and other textile floor coverings 39 15.9 12.5-21.3 0.0  39 12.5 12.5 0.0 
58. Special woven fabrics  tufted text ile fabrics; lace;  tapestries; 
trimmings; embroidery 56 14.0 10-17.8 0.0  51 10.4 10-12.5 0.0 
59. Impregnated, coated, covered or laminated textile fabrics; textile 
articles of a kind suit able for industrial use 42 9.5 5-16.6 0.0  42 7.9 0-12.5 2.4 
60. Knitted or crocheted fabrics 65 14.9 13.4-19 0.0  57 10.0 10 0.0 
61. Articles of apparel and clothing accessories, knitted or crocheted 171 31.0 31 0.0  147 17.5 17.5 0.0 
62. Articles of apparel and clothing  accessories, not knitted or 
crocheted 204 31.0 31 0.0  194 17.5 17.5 0.0 
63. Other made up textile articles; sets; worn clothing and worn textile 
articles; rags 91 24.5 13-31 0.0  76 16.6 13-20 0.0 
64. Footwear, gaiters and the like; parts of such articles 80 24.3 10-26.7 0.0  80 22.8 10-25 0.0 
65. Headgear and parts thereof 15 19.3 16.7-19.8 0.0  12 15.0 15 0.0 
66. Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, 
riding-crops and parts thereof 9 17.1 5-24 0.0  8 11.3 5-15 0.0  
  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 94 - HS 
code Product descriptions 2004  2013 
No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%)  No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%) 
67. Prepared feathers and down and articles made of feathers or of 
down; artificial flowers; articles of human hair 8 14.8 13-15 0.0  8 14.8 13-15 0.0 
68. Articles of stone, pl aster, cement, asbestos, mica or similar 
materials 73 17.9 0-29 4.1  67 14.9 0-20 3.0 
69. Ceramic products 51 21.5 3-29 0.0  45 13.3 0-20 6.7 
70. Glass and glassware 131 9.7 0-21 3.8  132 8.2 0-15 3.8 
71. Natural or cultured pearls, precious or semi-precious stones, 
precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin 63 12.0 0-20 7.9  58 10.3 0-20 13.8 
72. Iron and steel 340 1.8 0-10 15.9  344 0.4 0-10 88.1 
73. Articles of iron or steel 276 10.7 0-29 13.8  248 9.5 0-23 24.2 
74. Copper and articles thereof 69 2.7 0-15 30.4  59 0.2 0-10 98.3 
75. Nickel and articles thereof 18 2.7 0-9.6 22.2  18 0.0 0 100.0 
76. Aluminium and articles thereof 65 5.9 0-29 55.4  56 2.7 0-20 76.8 
78. Lead and articles thereof 13 11.8 1.7-16 0.0  11 4.6 0-10 54.6 
79. Zinc and articles thereof 12 8.3 2.4-9.6 0.0  11 0.0 0 100.0 
80. Tin and articles thereof 8 0.6 0-2.4 75.0  6 0.0 0 100.0 
81. Other base metals; cermets; articles thereof 73 2.3 0-2.4 1.4  67 0.0 0 100.0 
82. Tools, implements, cu tlery, spoons and forks, of base metal; parts 
thereof of base metal 105 8.1 0-18.4 11.4  98 7.1 0-15 11.2 
83. Miscellaneous articles of base metal 50 9.8 0-17.4 14.0  42 10.6 3-15 0.0 
84. Nuclear reactors, boilers, machinery and mechanical appliances;  
parts thereof 1,051 6.5 0-19.8 34.1  898 4.3 0-15 54.7 
85. Electrical machinery and equipment and parts thereof;  sound 
recorders and reproducers, television image and sound recorders 
and reproducers, and parts and accessories of such articles 671 8.5 0-25 27.3  520 7.7 0-25 34.0 
86. Railway or tramway locomotives, rolling-stock and parts thereof; 
railway or tramway track fixtures and fittings and parts thereof; 
mechanical (including  electro-mechanical) traffic signalling 
equipment of all kinds 40 3.5 0-20 60.0  29 1.6 0-10 79.3 
87. Vehicles other than railway or tramway rolling-stock, and parts 
and accessories thereof 183 8.7 0-21 6.0  194 6.4 0-20 18.0 
88. Aircraft, spacecraft, and parts thereof 34 4.3 0-13 55.9  22 6.7 0-13 31.8 
89. Ships, boats and floating structures 38 12.6 0-17.4 2.6  35 11.5 0-15 2.9  
  WT/TPR/S/290 • The former Yugoslav Republic of Macedonia 
 
- 95 - HS 
code Product descriptions 2004  2013 
No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%)  No of 
tariff 
lines Simple 
average 
tariffs 
(%) Range 
(%) Share 
of 
duty-
free 
lines 
(%) 
90. Optical, photographic, cinema tographic, measuring, checking, 
precision, medical or surgical instruments and apparatus;  parts and accessories thereof 300 2.6 0-19.8 74.0  242 1.9 0-15 78.5 
91. Clocks and watches and parts thereof 65 13.6 0-17 4.6  55 5.0 5 0.0 
92. Musical instruments;  parts and accessories of such articles 31 9.0 9 0.0  30 9.0 9 0.0 
93. Arms and ammunition;  parts and accessories thereof 28 20.5 7-25 0.0  22 20.1 7-25 0.0 
94. Furniture;  bedding, mattresses, mattress supports, cushions and 
similar stuffed furnis hings;  lamps and lighting fittings, not 
elsewhere specified or included;  illuminated signs, illuminated name-plates 87 17.3 0-27 9.2  77 12.0 0-15 3.9 
95. Toys, games and sports requisites; parts and accessories thereof 79 6.5 6-10 0.0  62 2.4 0-10 67.7 
96. Miscellaneous manufactured articles 72 16.3 0-21 1.4  74 13.1 0-17.5 8.1 
97. Works of art, collectors ' pieces and antiques 7 7.0 7 0.0  7 7.0 7 0.0 
 
Source:  WTO Secretariat calculations, based on tariff and trade information provided by the authorities. 
 
__________