RESTRICTED  
  
WT/TPR/G/290  
23 October 2013  
(13-5777)  Page: 1/15  
Trade Policy Review Body  Original:  English  
 
TRADE POLICY REVIEW 
REPORT BY 
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trad e Organization), the policy statement by the 
former Yugoslav Republic of Macedonia is attached. 
 
 
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. WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  Contents 
1   INTROD UCTION  .......................................................................................................... 3  
2   ECONOMIC ENVIRONMENT .......................................................................................... 4  
2.1   Economic trends ........................................................................................................ 4  
2.2   Trade policy developments .......................................................................................... 5  
2.3   Privatization ........................................................................................................... .. 6 
2.4   International competitiveness ...................................................................................... 6  
2.5   Foreign investments................................................................................................... 6  
2.6   Technological Industrial  Development Zo nes (TID Zs) ...................................................... 7  
2.7   Small and medium  sized enterprises ............................................................................ 7  
2.8   Intellectu al property .................................................................................................. 7 
2.9   Competit ion policy ..................................................................................................... 8 
3   ECONOMIC POLICY PRIORITIES .................................................................................. 8  
3.1   Determinants of Macedo nia's Foreign Tr ade Policy .......................................................... 8  
3.1.1   Macedoni a and the WTO .......................................................................................... 8  
3.1.2   Macedoni a and the EU ............................................................................................. 9  
3.1.3   Free trad e agreements ............................................................................................ 9  
3.1.4   Aid for trade ......................................................................................................... . 9 
3.2   Sectoral policies ....................................................................................................... . 9 
3.2.1   Agriculture ............................................................................................................. 9  
3.2.2   Fisheries ............................................................................................................... 10 
3.2.3   Fo restry  .............................................................................................................. . 10 
3.2.4   Wate r econ omy ..................................................................................................... 10 
3.2.5   In dustry .............................................................................................................. . 10 
3.2.6   Energy ................................................................................................................ . 12 
3.2.7   Services .............................................................................................................. . 12 
4   MACEDONIA AND DOHA DEVELOPMENT ROUND OF MULTILATERAL TRADE 
NEGOTIATIO NS .............................................................................................................. 15  
5   CONC LUSION............................................................................................................. 15  
 WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  1  INTRODUCTION 
1.1.  The Republic of Macedonia, on 4 April 2003, became the 146th Member of the World Trade 
Organization (WTO) and in accordance with the objectives and the procedures of trade policy review mechanism arising from its membership is presenting its first Trade Policy Review. In this 
context, Macedonia is fully aware of the signific ance of this periodic review as assessment and 
evaluation of the Macedonian trade policy and practice regarding disciplines and commitments 
under the multilateral trade agreements.  
1.2.  In the past years the integration of Macedonia in the world economy has been conducted 
through three mutually compatible processes: integration in the multilateral trading system, integration in the European Union, and regional tr ade integration. As an outcome of such policy, 
the key events of such trading policy were WTO membership, conclusion of the Stabilisation and 
Association Agreement with the European Union - the first of its kind - and conclusion of free trade 
agreements with the countries in the region and Europe.  
1.3.  The economic policy of Macedonia in recent years has been focused on implementing reforms 
by continuous increasing improvement of th e business environment, enhancing support of 
innovation and entrepreneurship as main promoters of dynamic economic growth. The economic progress and capacity to implement reforms, stre ngthening of functioning of the market economy 
is best reflected in the World Bank Doing Business 2013 report, where Macedonia is ranked at the 
high 23rd place in the world according to the conditions for doing business and marked as a leader in SEE region. 
1.4.  The Macedonian Government considers foreig n direct investments as one of the cornerstones 
for future growth and in recent years has been active in efforts to attract private investors in the 
country. Hence, many activities have been focu sed on wide-ranging reforms that has already 
improved the business environment and brought incr eased economic growth as well as higher FDI 
inflows. These efforts have helped to attract FDI, which reached 4.5 per cent of GDP in 2011. In 
addition, a large number of companies are in an advanced stage of negotiations with the Government on new FDIs (mostly in the auto industry, food and construction). Total green-field 
FDI in 2013 (largely by export-oriented industries) is expected to reach around Euro 270 million 
(3.3% of GDP). This trend is likely to continue in 2014 as the Government continues pursuing its agenda of improving the business climate combin ed with aggressive marketing as well as 
expanding the number of Free TIDZ. 
1.5.  Macedonia has been a candidate country for EU membership since 2005, in October 2009, 
and the European Commission has recommended start of accession negotiations for full-fledged membership. Membership in the EU is a strong motive and lead of comprehensive economic 
reforms by the Government. The Stabilisation and Association Agreement (SAA), concluded on 
9 April 2001 provides a framework for political dial ogue and strengthens the regional cooperation, 
promotes expansion of markets and economic relations among the EU and Macedonia and 
establishes the grounds for technical and financial support. In addition, the Republic of Macedonia 
embarked on a high level accession dialog (HLAD)  with the EU, which provided another platform 
for accelerating accession relating reforms in the economy. 
1.6.  Macedonia has concluded and implemented 32 bilateral agreements on trade and economic 
cooperation, 6 of which with the EU Member States and other with third countries. The aim of 
these agreements is to improve overall econom ic relations and cooperation between Macedonia 
and other countries. In addition, by 2012 Macedonia has concluded 38 bilateral agreements on 
promotion and mutual protection of investments, of which 16 in force were signed with countries 
of the EU. Macedonia has concluded a total of 42 double taxation avoidance agreements of which 
23 are with the EU Member States. 
1.7.  In time of globalisation and increased competitive pressure, development of knowledge-
based economy, development of SMEs, innovations, job creation, favourable business climate and development of new technologies remain to be the main challenge of the Macedonian Government. The GDP growth in 2013 is expected to be ar ound 2%. In 2014 and 2015, in line with the 
expectations for the growth of economic activi ty in the EU and other important major trade 
partners, moderate acceleration of growth is ex pected. Thus, real GDP growth in 2014 is projected 
at 3,2% and 3,8% in 2015. WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  2  ECONOMIC ENVIRONMENT 
2.1  Economic trends 2.1.  In the fourth quarter 2012 compared to the same quarter of the preceding year, GDP grew 
by 0.2% in real terms, following the annual growth  of 0.3% registered in the third quarter. The 
average economic growth rate in 2012 was -0.2%, as a result of the decline of GDP in the first half 
2012. Adverse economic developments in the EU, the uncertainty related to the debt crisis in the 
Euro zone and the expectations of economic agents  had a significant impact on economic activity 
in 2012. Hence, reduced external demand for Mace donian products, mainly from the EU, and the 
decline in export prices, implied lower capacity utilization of companies in manufacturing, decline in industrial production and a negative exports gr owth. Additional impact on economic activity in 
the first quarter of 2012 had the bad weather, which led to a decrease in construction activity and 
investment demand.  
2.2.  In 2012, according to the expenditure approach  of calculating the GDP, the high increase of 
gross capital formation by 12.1% in real terms limit ed the decline of GDP, creating also a basis for 
strengthening the competitiveness of the economy in the next period. Final consumption fell by 
0.7% in real terms, as a result of the decrease in household consumption by 1.2%, whereas general government consumption increased by 1.2%. Export of goods and services decreased by 
0.4%, while imports grew by 3.6% in real terms, mainly as a result of the high growth of gross 
capital formation. 
2.3.  The analysis of GDP according to the prod uction side shows that the decline in economic 
activity in 2012 was due to lower industrial produc tion by 7.4%. Construction, after the decline by 
8.1% in the first half of 2012, due to the bad weather (in the first quarter), as well as the high 
comparative basis, in the second half registered a high positive growth rate of 13.3%, leading to 
an average growth in 2012 by 4.6%.  
2.4.  In Q1 2013, GDP increased by 2.9% in real terms compared to the same quarter last year, 
which is a significant acceleration in economic activity after the growth of 0.2% in the second half last year. Analyzed according to the expenditure side, GDP growth in Q1 2013 was driven by gross 
investment, which increased by 9.4%. Gross investment growth is in line with the high growth of 
construction activity as well as the increase of domestic production of capital goods. Final consumption in Q1 2013 registered a slight decrease  of 0.4%, which is mainly due to the decrease 
of public consumption by 1.5%, while personal consumption registered а mild decrease of 0.1%. 
The decrease in economic activity in EU and consequently lower external demand caused a 
decrease in foreign trade. Export of goods and services fell by 0.3%, while import of goods and 
services was down by 3.7%. Due to the stronger decrease in imports than exports, net exports 
contributed positively to the overall economic growth. 
2.5.  Analyzed according to the production side of GDP, in Q1 2013 a positive growth was 
registered in all sectors. The most significan t contributor to the total economic growth was 
construction sector, which registered an increase of 36.8%, following the increase by 12.5% in the 
second half last year. In Q1 2013 industrial production registered a positive growth of 0.7%, after the decrease in the previous six quarters. Activity  in agriculture increased by 1%, and the services 
sector registered a growth rate of 1.9%. 
2.6.  Macroeconomic policy in the period 2013-2015 provides conditions for increased economic 
activity through sustainable fiscal policy, which, in coordination with the monetary policy, will contribute to achieving sustainability of the ex ternal position of the country and maintaining 
macroeconomic stability of the economy. Medium-term macroeconomic scenario is based on the 
expectations for slow exit of the EU economy fr om the recession and realisation of low positive 
growth rates in the coming years, realisation of the planned FDIs and structural reforms which 
contribute to increasing country's competitiveness. 
2.7.  Maintaining price stability is the primary monetary objective of the National Bank of the 
Republic of Macedonia (NBRM). Without prejudice to its primary objective, the NBRM also contributes towards sustaining financial stability and supports the general economic policies in the 
country. The implementation of the primary goal of  NBRM is done by using the strategy of a de 
facto fixed exchange rate of the Macedonian currency - Denar against the Euro (previously against WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  the Deutsche Mark). The choice of the strategy re flects the specific features of the Macedonian 
economy, such as its small size and high openness, with its main trading partners coming from the eurozone and having relatively high level of euroization. The exchange rate targeting strategy has proven to be quite successful in stabilizing inflation expectations and maintaining low and stable 
inflation rate in Macedonia. Average inflation for 1996 to mid-2013 period amounted 2.3%, which 
is close to the average inflation in the EU countries.  
2.8.  Over the past years of global financial and economic crisis Macedonian monetary policy has 
played an increasingly important and challenging role to sustain macroeconomic stability and 
support economic revival in the country. The flexible set up of the monetary policy operational framework allowed NBRM to effectively cushion against risks using interest rates policy, changes in reserve requirements and some other monetary and prudential measures. Originally responding by 
interest rate rise at the beginning of 2009, towards the end of 2009 NBRM initiated an easing cycle 
gradually reducing the key policy rate. By July 2013 the key policy rate (interest rate of the CB 
bills) was brought down to its historical lo w of 3.25%. In April 2012, NBRM fundamentally 
redesigned its monetary policy instruments with the goal of further strengthening monetary policy 
effectiveness, easing credit conditions and supp orting the development of domestic money market. 
Additional measures in reserve requirement were undertaken in November 2012 and July 2013. 
The first measure is unconventional i.e. temporary and targeted towards easing credit conditions 
for domestic net exporters and electricity producers. The second one includes changes in the reserve requirements ratios and base to furthe r support savings in domestic currency and to 
stimulate long-term capital inflows in the domestic economy. By taking an active approach in 
managing the crisis, the NBRM managed to preserve the macroeconomic stability in the country. 
The stability of the exchange rate was successfully sustained with inflation expectations remaining firmly anchored. In conditions of available reso urces for financial support, adequate liquidity and 
capitalization, the banking system remains sound and stable thus being able to further support the 
domestic private sector activities. 
2.2  Trade policy developments 
2.9.  The main government authority responsible for formulating and implementing policies 
relating to foreign trade is the Ministry of Econ omy. The Ministry of Economy is responsible for 
concluding and signing trade treaties and other trade-related agreements with foreign countries. 
In carrying out these tasks, the Ministry of Ec onomy cooperates with the Ministry of Foreign 
Affairs, the Ministry of Finance, the Ministry of Agriculture, Forestry and Water Economy, and other 
authorized Ministries. Foreign trade policy is formulating 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. 
2.10.  Following the WTO accession process, the Republic of Macedonia had integrated the basic 
WTO principles in its trade policy, undertook obligations of the membership and provides 
participation in further creating of the international trade policy. Due to the principle of 
liberalization, the market of goods and services was opened and liberalized. All laws and regulations governing the right to trade in goods, as well as other measures have been complied with Macedonia’s WTO commitments and are implemented in full conformity with these 
obligations.  
2.11.  As a small country Macedonia is relatively open to trade in goods and services. The degree 
of Macedonia’s trade openness which in 2008 accounted for 133% of GDP is an important indicator 
and component of economic growth. In 2011, ther e was some stabilization and improvement of 
the performance of the external sector, where trade openness has increased by 15 p.p. compared to 2010 amounting to 109.5% Both imports and exports were very dynamic during the past 
period, having the continuous expansion of the integration of Macedonia in global trade flows. 
Between 2002 and 2012, imports rose from about 1,2 to 6,5 billion US$, while exports grew from 1,2 to 4,0 billion US$. This demonstrates that Macedonia is highly dependent on the international economy and susceptible to foreign shocks, such as the recent global economic crisis. 
Licences, export/import controls 
2.12.  Macedonia has made considerable efforts to liberalise the legislative and administrative 
regimes according to WTO rules and SAA and constantly working on the improvement of its WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  national export and import control system. The Law on Control of exports of Dual-Use Goods and 
Technologies adopted in 2005, aligned with EU acqu is regulates the export and transfer of such 
goods. The establishment of the electronic One- Stop-Shop system for issuing import and export 
licenses – EXIM, fully operational from November 2008, represents a substantial progress in 
customs operation in terms of facilitating the movement of goods. The special internet portal 
enables the economic operators (provided they have  a digital certificate) to request and obtain 
import and export licenses from relevant governmental institutions. Furthermore, EXIM enables 
the importers to electronically submit their applic ations for tariff quotas distribution, which are 
available as per the agreements on free trade. 
2.3  Privatization 2.13.  Economic activities in the country are based on dominant private ownership with fully 
functioning of a market economy on the principl es of free interaction between supply and demand. 
A new Law on state capital management, which will regulate the privatisation of state capital, is in the phase of preparation. Further privatisation process includes restructuring of the public 
enterprises (PE Macedonian roads, Macedonian Post , etc.), by defining possibilities for further 
selling of extracted parts, including selling of non-co re activities, as well as selling of the residual 
shares owned by the government and the Pension and Disability Insurance Fund.  
2.14.  Within the privatisation procedure of the four large companies: EMO AD Ohrid, OHIS AD 
Skopje, Tutunski kombinat AD Prilep and Eurokompozit AD Prilep, documentation for  new public calls for selling of the government and the Pension and Disability Insurance Fund  shares in 
Eurokompozit AD Prilep and in EMO AD Ohrid is in the phase of preparation. In tobacco capacity 
T u t u n s k i  k o m b i n a t  A D  P r i l e p  a n o t h e r  f o r m  o f  i n vestment has been planned, by finding foreign 
company for strategic partnership. 
2.4  International competitiveness 
2.15.  Encouraging competitiveness as a backbone of a sustainable economic growth is realized 
through implementation of more strategic documents, action plans, programs and measures focused on development of SMEs, support of inve stments, implementation of industrial policy, 
cluster development, support of innovation and export promotion. In order to improve the 
awareness of the business community for active policies, programs and measures for strengthening the competitiveness that are conducted by various institutions, donors  is developed. 
2.16.  The Government policies and measures st ay focused too on improvement of the business 
climate, continuing regulatory reforms (Regulator y Guillotine and Regulatory Impact Assessment – 
RIA), for simplification of procedures for doing business, eliminating barriers, improvement of the 
dialogue with the business community, diminishing the costs and other initiatives in order to 
create equal conditions for economic development and advancement of the private sector development. For providing a more efficient and f unctional dialogue between the private, public 
and civil society actually the Government and the business community in 2012 was restarted NECC 
(National Entrepreneurship and Competitiveness Council) with the  objective to improve the 
competitiveness of the Macedonian economy. With in its activities, the Council also follows the 
Report on Global Competitiveness (Global Competitiveness Index) by the World Economic Forum 
and gives proposals for measures that will lead to improvement in the rating. 
2.5  Foreign investments 2.17.  The majority of foreign direct investment in Macedonia before 2003 entered through 
acquisitions i.e. through a privatization process which was almost completed that year (except a 
few mines and the electricity management). Since 2003, many of the foreign direct investment has been green-field investments or capital investments in the financial sector usually through 
undertaking private financial companies.  The foreign direct investments contributed to the 
acceleration of the economic growth of the country by creating new jobs, increasing productivity and competition, industrial specialization, the transfer of sophisticated technology, faster access to the global market, transfer of management skills, introduction of innovations, as well as higher 
integration of the country in the international trade. 
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  2.18.  Invest Macedonia (The Agency for Foreign Investments and Export Promotion of the 
Republic of Macedonia), founded in 2005, as part of the Government’s efforts to attract foreign investments is the focal institution responsible for attracting foreign investments and acts as central coordinating body responsible for developm ent of the export potential of the Macedonian 
products and services. Its activities are performed in accordance to the strategic documents: 
Programme for Stimulating Investment in the Republic of Macedonia 2011-2014 and Export Promotion Strategy (2011), which serve as a route map to achieving the suggested goals and to 
sharpen the strategic direction and coordination among the institutions responsible for attracting 
FDI and the institutions responsible for export promotion.  
2.19.  The combined efforts of the Invest Macedonia Agency, together with the other partner 
institutions responsible for attracting investments and the aggressive marketing promotion are 
supported by the latest data of the Macedonian National Bank, which show a significant increase of 
the FDI inflow for the first quarter of 2013, compared to the same period last year. Namely, in 2012 the inflow of foreign direct investment for the first quarter amounted to EUR 40.1 million 
while for the same period in 2013 the FDI inflow is EUR 73.3 million, which shows an increase of 
33.2 million EUR. Most potential investors are coming from Turkey, USA or the older EU members (Germany, Belgium, the Netherlands, etc.), while primary industries for which they are interested 
are the following: automotive, textile, construction, food processing and manufacturing. All 
investors bring new technology and know-how, which inevitably reflect the local economy and the relevant industry. Equally important, is that many of these companies produce highly sophisticated products with high added value, which is already leading to structural changes in the industry and 
exports in the country. 
2.20.  Tools for export promotion are also being enhanced. Since 2011, Invest Macedonia covers 
activities related to export promotion funded from  the Agency’s budget and from donor projects. It 
has implemented a number of activities and organized around 20 promotional events related to 
the identified target sectors such as promotion of Macedonian food and wines in several cities in USA, EU countries (Finland, Poland, Germany, the Netherlands etc), participation at business and 
investment forums in different sectors, enabled participation of Macedonian producers of 
automotive components on fairs in Serbia and Germany, participation of ICT companies on B2B events in UK, Germany, Kosovo and Albania, study visits etc. In 2012, 65 companies used the services of the Agency regarding the promotional events and it is estimated that the number will 
increase to 80 in 2013. 
2.6  Technological Industrial Development Zones (TIDZs) 2.21.  Under the Law on Technological Industrial Development Zones, the TIDZs are established 
with a view to the development of modern technologies and efficient resource utilization by 
applying high environmental standards. In accordance to the Law, the Directorate for TIDZs has competence for activities related to establishing, development and monitoring of the Zones. 
Currently, there are 9 established TIDZs in the Republic of Macedonia, out of which 4 are 
functional, with 1,270 employees double more compar ed to 2011, thus contributing to the creation 
of new jobs in the country. 
2.7  Small and medium sized enterprises 
2.22.  The Republic of Macedonia has made substantial progress over the last few years in 
harmonizing its Small and medium-sized enterprises (SMEs) policy with the SBA principles. Policies and activities for SME support and development arises from the National Strategy for the 
Development of the SME Sector (2002-2013), Craft strategy 2012-2020, annual Programs for SME 
development and EU Small Business Act (SBA). Over the last few years the government has focused on improving the business environment, by implementing a comprehensive regulatory 
reform, introducing RIA, establishing a one-stop shop for company registration including online 
registration and widening the range of the e-government services. 
2.8  Intellectual property 2.23.  Since the WTO accession, the Republic of Macedonia has given serious consideration to the 
protection of intellectual property. Rights arising from scientific, artistic and other intellectual 
works are guaranteed under Article 74 of the Constitution. Republic of Macedonia is a member of WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  all relevant international agreements in the area of intellectual property. In accordance with 
commitments undertaken under the WTO TRIPS Agreement and as part of its efforts to harmonize national with EU legislation on intellectual pr operty rights, Republic of Macedonia carried out 
modifications and adjustments of the existing legislation and undertook certain activities for the 
purpose of providing more efficient protection of intellectual property rights. With the aim of 
reducing IP rights infringements, special atte ntion has been given to the enforcement of IPR 
through strengthening the fight against counterfeiting and piracy and establishing a reliable track 
record on enforcement of IPR. Further efforts in the IP field will be focused on stimulating 
innovations, transfer of technologies arising from research at the universities and strengthening the links with the business community. 
2.9  Competition policy 
2.24.  Competition policy in Macedonia is based on the competition legislation that includes 
antitrust (prohibited agreements and abuse of a dominant position) and merger control. State aid rules are part of this policy too. So far three competition acts have been adopted (1999, 2005 and 
2010) and a whole range of implementing rules in form of decrees and guidelines. In respect of 
state aid rules, the current Law on Control of State Aid (2010) replaced the old Law on State Aid (2003). Commission for Protection of Competition (CPC) is an independent state authority since 
2005. CPC is independent in its operation and making decisions within the scope of its 
competences, while the budget necessary for its operation is provided from the Budget of the Republic of Macedonia.  
2.25.  The primary purpose for adoption of the new Law on Protection of Competition (LPC) is 
further alignment with the EU acquis and e nhancing efficient competition enforcement in 
Macedonia. Another important change introduced with LPC is that the CPC was entrusted with the power to establish infringement of competition rules and to impose fines for such determined 
misdemeanour offence in a single decision adopted in single misdemeanour procedure. 
Furthermore, LPC introduced the following novelties: a legal basis for future potential group exemption of air transport agreem ents; leniency programme i.e. immunity from fines or reduction 
of fine for a specific perpetrator of a misdemeanour prescribed in the LPC in cases undertakings 
participating in prohibited agreements cooperate with CPC and fulfil precisely defined conditions of Article 65 of the LPC; right of the perpetrators of the competition rules to offer to the CPC undertaking commitments within a defined deadline, fu lfilling of which will lead to overcoming the 
restriction of competition caused by the beha viour of the perpetrator (Article 43 of LPC). 
3  ECONOMIC POLICY PRIORITIES 3.1  Determinants of Macedonia's Foreign Trade Policy 
3.1.1  Macedonia and the WTO 
3.1.  Macedonia has consistently pursued to be  a country with an open and transparent trade 
regime fully compatible with WTO rules and disciplines. Despite of the global financial and 
economic crisis, Macedonia has followed its WTO commitments respecting the importance of free 
trade and integration into the world economy. 
3.2.  Since the accession to the WTO (and before) the Republic of Macedonia is beneficiary country 
of WTO “technical assistance” to build trade capacity. The officials form competent authorities 
participated in WTO training courses, seminars an d workshops. Improvements in trade capacity on 
WTO matters have facilitated the participation of trade officials of Macedonia to implement the existing WTO trade agreements, commitments undertaken during the accession and representing 
the country at the WTO.  
3.3.  Macedonia participated in the Doha Minist erial Conference, as an observer country and in 
three WTO Ministerial Conferences: Sixth in Hong Kong, 2005; Seventh and Eight, in Geneva 2009 
and 2011, as the WTO Member. Macedonia has been involved in DDA negotiations, particularly in 
agricultural, NAMA and services negotiations, pres enting its position in the RAMs group (Recently 
Acceded Members) and also CEFTA plus group. WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  3.1.2  Macedonia and the EU 
3.4.  The most important trading partner of Macedonia is the EU, participating with 62.8% in the 
total exports and 58.4% in the Macedonian imports in 2012. Since 2001, Macedonia has benefited from asymmetric trade preferences from the EU by the Interim Agreement concerning trade and 
trade-related matters, immediately enabling application of the Stabilisation and Association 
Agreement (SAA). 
3.5.  The Republic of Macedonia is the firs t country that signed SAA with the European 
Communities. The SAA was signed on 9 April 2001 and entered into force on 1 April 2004. The 
Agreement sets out the cooperation framework betw een the EU and the Republic of Macedonia and 
enables progressive harmonisation of the relevant policies, legislation and institutions in the Republic of Macedonia with the values and standa rds of the European Unio n. According to the SAA 
harmonising the internal market legislation has been identified as a priority in the first phase of 
association and is in advance stage. Macedonia continues to meet all obligations envisaged in the first stage of implementation of SAA, therefore,  in October 2009, European Commission proposed 
shifting to the second stage of the association, in line with Article 5 of SAA. The harmonisation of 
legislation takes place through National Programme  of Adoption of EU Acquis, adopted by the 
Government on the basis of European Partne rship, the SAA and annua lly adopted Commission 
Reports. 
3.6.  Macedonia has achieved exceptionally a lot as regards realisation of its strategic goal for 
fully-fledged membership in the EU; it has been clearly affirmed with the recommendation for start 
of negotiations by the European Commission, which the country is given four years in a row 
already. A High Level Accession Dialogue (HLA D) was launched by the government and the 
Commission on 15 March 2012 with aim to provide new dynamics into the EU accession reform process. 
3.1.3  Free trade agreements 
3.7.  For the purpose of opening new markets, the Republic of Macedonia has approached to 
further liberalization of trading with goods through concluding free trade agreements in line with 
Article XXIV of GATT with the neighbouring count ries and the region. The free trade agreements 
(FTAs) currently applied by Macedonia are: th e SAA, CEFTA 2006, EFTA, Turkey and Ukraine. 
These FTAs present overall framework for developm ent of the regional cooperation, and broader 
connection with political and economic criteria for further integration in the European processes. 
3.1.4  Aid for trade 
3.8.  Support to improve the business climate,  competitiveness enhancement and support for 
labour skills development in sectors of particular interest of the country and implement outcomes 
(sectors that are explicitly highlighted in nation al development plans as significant potential to 
contribute to growth) could be iden tified as needs for future of Aid ‐for‐Trade support of the 
country. 
3.2  Sectoral policies 
3.2.1  Agriculture 
3.9.  Climatic conditions, a longstanding accumulation of skills and traditions make agriculture a 
particularly important industry in Macedonian economy. Regarding the share to GDP, the 
agriculture is the third largest sector in the economy (including hunting, forestry and fisheries). In 
2010, the primary agricultural production account s 10.6% of total GDP, after the services and 
industry sectors. Almost half of the population lives in rural areas, relying mainly on farming as a 
major form of economic activity. 
3.10.  Тhe National Strategy for Agriculture and Rural Development (NSARD) 2007-2013 provides 
strategic basis for adjustment of agriculture and rural policies to the Common Agriculture Policy (CAP) of the European Union. Therefore, most of  the reforms in the agriculture and rural sectors 
have been driven by structural and legal reforms preparing this sector for integration into the 
European Union. In the last years, Ministry of  Agriculture, Forestry and Water Economy (MAFWE) WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  has undertaken reforms, focused to increase the capacity of domestic economy to function in 
terms of the single European market through the approximation of the performances of Macedonian agricultural producers to the standards for quality and safety of food and in line with 
the demand of the domestic, regional and EU markets in terms of price, quality and consumer 
expectations. 
3.11.  In the following period, national agricultural and rural development policies will be focused 
on further modernization of Macedonian agriculture, increasing the competitiveness, improving 
farmers' incomes and social stability of rural popu lation, and provision of food safety and security 
with sustainable management of natural resources. 
3.2.2  Fisheries 3.12.  The reform of fisheries policy in the Republic of Macedonia is oriented towards more 
significant investments in modernization and adaptation of the current facilities for aquaculture 
production and building new processing facilities . Additionally, the reforms in fisheries cover 
sustainable management in the inland waters, more selective technologies, and improving the 
conditions and safety fishing. The management and use of fish, the aquaculture, the protection of 
fish and marketing, production of reproduction material, the establishments, association and financing, state aid, as well other issues related to fisheries and aquaculture are regulated by the 
Law on Fisheries and Aquaculture, Law on Veterinary Health, Law on Food Safety and the Law on 
State Agriculture Inspection. 
3.2.3  Forestry 3.13.  According to the National Strategy for Sust ainable Forestry Development in the Republic of 
Macedonia with the Action Plan 2007-2009”, both adopted by the Government, the MAFWE is 
responsible for creation and implementation of policies and reforms for sustainable management of forest resources. The state-owned forests cove r 90,14% and the private owned forests cover 
9,86% of the total forest land. State-owned forest management is carried out by Public Enterprise 
"Macedonian Forests" within which there are 30 branch offices responsible for forest management, sylviculture, seedling nurseries and aforestation, as well as forest protection 
3.2.4  Water economy 
3.14.  The reform processes in the irrigation and drainage sector in Macedonia are focused towards 
investments for rehabilitation and modernization of the current systems and construction of the new ones, as well as introduction measures aimed to decreasing of water loses within the systems 
and introduction of modern technologies. For achieving the mentioned reforms, re-structuring of 
the irrigation and drainage system were realized by establishment of multilevel management of the system i.e. irrigation and drainage orient ed towards end users. The final goal of this 
restructuring is decreasing the price of water fee, increasing the irrigated agricultural land, and 
poverty reduction. 
3.2.5  Industry 
3.15.  Macedonian manufacturing industry has a significant share of 18% in the GDP structure, 
and its importance is indisputable in respect of employment and sustainable regional development. 
Measured by the volume of industrial production, currently the most significant activities in the structure of the manufacturing industry include: food and beverages, textile and apparel, 
manufacture of basic metal, machinery and equipment, tobacco products, and pharmaceutical 
products and pharmaceutical preparations. The manufacturing industry is the most significant industry in terms of employment. The greatest num ber of workers in the manufacturing industry is 
employed in: textile and apparel, food and bevera ges, exploitation and production of metals and 
metal products, and leader and related products. The largest portion of the manufacturing industry's exports is realized by the following groups of products: flat-rolled iron and still products, 
clothing, chemicals (catalysts) and chemicals products, food products and fuels.  
3.16.  The industrial policy of the Republic of  Macedonia is focused on a concept for economic 
development that supports the encouragement of domestic industry towards higher value added 
products and services based on knowledge, innovation and collaboration. Priority is given on WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  development of capabilities for applied research an d industrial production of sustainable, organic 
and specialized high technological product and serv ices for the needs of the international market, 
with its own design, highly trained work force, modern managerial approach, and use of research 
and development. 
Food and  Beverages 
3.17.  The food and beverages industry is on e of the key branches in Macedonian economy 
considering that most of its production is targeted for foreign markets. In 2012, the production of 
food products and beverages accounted for 16.4% of  the overall industrial production and tobacco 
products and fermented tobacco account for 5. 8%. The food exports in 2012 reached 14.9 % of 
total export of the country. The most important export articles are tobacco and tobacco products with 23.9% of food exports in 2012, fruit and vegetables with 21% and wine with 11.7%. Wine 
production has a long tradition in the country, which provides wine industry potential and 
competitiveness to participate in foreign markets. Fruit and vegetable processing industry is important as Macedonian processed products, especially traditional and ecological have a good 
reputation in the region and the EU countries.  
3.18.  The food industry has about 1,200 acti ve companies with around 17,000 employees, 
representing about 17% of the total number of employees in the manufacturing industry. Raw 
materials and export opportunities of healthy food is a challenge for rehabilitation and 
modernization of existing technological lines and construction of small production facilities adaptable to new attractive products, environmentally healthy, according to the long-term Strategy for development of primary agricultural production with aim to increase interest and 
attract strategic partners for joint ventures. 
Textile Industry 3.19.  The textile industry plays a significant role in Macedonia considering the fact that over 90% 
of its production is exported, and having the facts that it is the most widespread branch in the 
economy. The process of globalization and the increased inclusion of the national into the international economy, offers a great number of challenges to the textile industry. Macedonian 
textile and garments industry is passing through a period of very intensive changes and structural 
adjustment. In July 2007, Macedonia adopted the Strategy for the Macedonian Textile and Garment Industry for the period 2008–2020. The Strategy  defines: market re-positioning according to the possibilities and abilities of Mace donian textile companies; technology transfer 
and production; growth of textile companies and their networking with the intention to achieve 
greater negotiating abilities;  personnel adjustment to new markets, technological and organizational conditions of business running and development; tradition and experience in 
business and product quality being the most impo rtant strengths of the Macedonian textile and 
garment industry. The Strategy represents a base for preparation of a programme on measures intended for development of the textile industry, that includes more detailed short-term measures, 
middle-term and long-term measures, and they are at macro, mezzo and micro level. 
Competitiveness in textile industry may be maintained only by investments in technology that will enable higher level of productivity and product quality, innovations, creativity and design being of the key importance.  
Metallurgy 
3.20.  Metallurgical industry as the most vital in the economy, accounts for 7.5% of GDP and 11% 
of the added value created by the overall Macedoni an industry. In the total national export this 
sector accounts for approximately 35% and 14.9% of the total number of employees. Privatization 
process in companies of metallurgy sector is completed. Steel industry was covered by National Restructuring Programme as part of the obligations undertaken by Protocol 2 of the Stabilisation 
and Association Agreement with the European Unio n. Five-year period of implementation of the 
National Programme for Restructuring of the steel industry of the country was successfully completed. Annual reporting for the situation in Ma cedonia's steel industry is communicated to the 
European Commission. Ores of base metals and steel products (zinc, lead, copper, nickel, silicon, 
hot-rolled and cold-rolled products of iron or non-alloy still, flat-rolled products plated or coated 
with zinc, tubes, constructions etc.) are mostly exported to the markets of the EU and the countries of the region. WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  Non-metal industry 
3.21.  Non-metal industry includes the followin g branches: (1) other mining and quarrying with 
share of 1.5% of the total industrial production  and (2) manufacture of other non-metallic mineral 
products with a share of 7.5%. In the non-metal industry about 272 enterprises have been 
registered with a total 3,356 employees or approxim ately 3.3% of the total number of employed in 
the manufacturing industry. In 2012, these branch es have a share of about 2.0% of the total 
exports of the country, and 2.9% of total imports.  Exports of products of non-metal industry is 
realized in Serbia, Montenegro, Greece, Germany, Albania and other countries. Export of 
construction products is mainly, over 70%, in countries of the region (Serbia, Albania, Croatia, Turkey and Montenegro), and on ly approximately one-fifth (22%  - 28%) of the production is 
exported to the EU (Greece, Italy, Germany, the Netherlands, Bulgaria, Slovenia and Romania). 
3.22.  The Government institutions through the programmes for financial support accelerated work 
on the implementation of European standards and certification for products as well as mechanisms of providing for “CE” marking for products intended for export in order to increase competitiveness 
in foreign markets. 
3.2.6  Energy 3.23.  The basic goal of the energy policy of Ma cedonia and one of the major strategic objectives 
in energy sector of the Government is reliable, safe and quality supply to consumers with all types 
of energy and energy fuels, integration of Ma cedonia’s energy market into the regional and 
international energy markets, promotion of rene wable energy sources and increasing of energy 
efficiency. This is very important for safety an d economical supplying the energy consumers, and 
creating conditions for sustainable energy develo pment in the state in framework for sustainable 
energy development in the region and widely. Th e energy policy is defined in the Strategy on 
Energy Development until 2030 adopted in April 2010.  This Strategy stipulate long-term objectives 
on particular energy activities development, for the purpose of securing reliability of different 
energy types supply; development priorities, incent ives to invest in energy facilities that use 
renewable energy sources, incentives to increase energy efficiency and other elements of 
importance for the development of the energy sector in the country.  
3.24.  In terms of reliable and quality supply, pursuant the strategic documents of the state 
regarding development of the transmission net of Macedonia, country gives emphasis on the 
interconnection lines in the electricity sector with the neighbouring countries. Macedonia has 
interconnection lines with Bulgaria and Greece, while interconnection line with Serbia is in the final 
phase. Procedure for establishing interconnection line with Albania is ongoing and it is planned interconnection line with Kosovo in the near future. 
3.2.7  Services 
Financial services 3.25.  In the period from 2006 to the end of  2012, the Macedonian banking system underwent 
several structural changes. The total banking assets were doubled from 174,1 billion Denars to 
352,9 billion Denars. The process of banking system  consolidation, which started in the previous 
years, continued in this period, which has led to a decrease of the number of banks from 19 to 16. At the same time, the share of foreign capital co ntinued its growth and reached 92.1% of the total 
banking assets (53.2% at the end of 2006). In addition, in 2007 a new Banking Law (2007) was 
adopted. The Law and the appropriate by-laws are in  line with EU directives and the international 
best practices and enable enhancement of risk management and corporate governance systems of 
banks, as well as enhancement of the risk-based supervisory practices of the National Bank of the 
Republic of Macedonia. 
Transport 
3.26.  The priorities for development of the road and railway infrastructure in the Republic of 
Macedonia are the transnational axes: Corridor 10, the North-South axis that connects the country with Serbia to the North and Greece to the South; and Corridor 8, the East-West axis that connects the country with the Bulgaria and Albania. In this area Macedonia continuously WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  implements the Memorandum of Understanding fo r the SEE main regional network and actively 
participates in the regional initiatives, with strong and substantial cooperation in the framework of the South East Europe Transport Observator y (SEETO). In addition, Macedonia actively 
participated in the negotiations on the Treaty establishing a Transport Community between the EU 
and SEE countries, which started in June 2008. 
3.27.  In April 2012 the National Transport Strategy (2007-2017) has been updated. The main 
objectives of this strategy are: promoting econom ic growth by building, enhancing, managing and 
maintaining transport services, infrastructure and networks for maximum efficiency; promoting 
integrated and interconnected transport network wh ich establishes effective customer services as 
well as the activities and areas in Macedonia beneficiaries of this network. 
Road Transport 
3.28.  Observing the general efforts to create an  integral, efficient and safety transport system, 
the policy on road transport of the Republic of Macedonia is directed towards a complete liberalization of the transport of passengers and goods with other countries. In order to increase 
the efficiency of the transport system, intensive wo rk has been completed on the finalisation of the 
legal framework regulating the relations in the field of transport. The new software for electronic distribution of licenses for international transport of goods and passengers has been acquired, thus 
providing greater transparency in the distribution, as well as corruption elimination. The Public 
Enterprise for State Roads (PESR) was established and there is ongoing restructuring of the road 
sector. Investment for improving the road network of Corridors VIII and X continued with assistance of international financial institutions (EIB, EBRD, European Commission) and own funds 
of PESR. The Road Investment Plan and National Transport Strategy for Roads represents solid 
base to explore alternatives in order to increase the effectiveness and efficiency of the road sector. 
Rail transport 
3.29.  The reform in the railways continues with  the implementation of the new legal framework 
whose basic characteristics are harmonization with the EU acquis as well as preparation and introduction of the liberalization of the railway market after the entry of Macedonia into the EU. An 
independent Rail Regulatory Agency (RRA) wa s established at the beginning of 2009 with 
responsibilities for both technical and economic regulation. In 2010 the Directorate for Safety in Railway System was established and the National Programme for Railway Infrastructure for the period 2011-2013 was adopted. Development of the ra ilway infrastructure is focused on realization 
of projects that belong to the Pan European railw ay corridors passing through the territory of the 
Republic of Macedonia. So far, the projects were funded by the state budget, foreign donations, credits and co-financing. According to the EU reco mmendations, financing will be made by Public 
Private Partnerships. 
Air Transport 3.30.  Aviation regulation is developed in accordance with accepted international aviation 
standards, recommended practices and legislat ion of the EU/ECAA, ICAO, ECAC, JAA/EASA and 
EUROCONTROL. The Aviation Act, as a legal frame wi th respect of civil aviation activities in the 
Republic of Macedonia, provides for a liberaliza tion of the market. Foll owing the concept of the 
"Single European Sky", Macedonia is taking steps to restructure the airspace based on traffic flow, 
rather than according to national borders. The Republic of Macedonia has concluded bilateral air 
service agreements with 32 countries. 
3.31.  In December 2008, full-fledged membership of  the Republic of Macedonia in Joint Aviation 
Authorities (JAA) was realised, by which the Civil Aviation Agency (CAA) became officially fully-
fledged member of JAA which ceased as such on 30 June 2009, but moved to the European Aviation Safety Agency (EASA). It is also signific ant that the transformation of the CAA completed 
in June 2009, by registering state-owned Joint Stock Company for carrying out the air navigation 
service provider activity. 
3.32.  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. On March 1, 2010, the Turkish company TAV Havalimanlar ı Holding A. Ş. Ltd and TAV WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  Macedonia Skopje, took over operation of the airports "Alexander the Great" and "St. Paul the 
Apostle " in Ohrid for a period of 20 years. 
Electronic communications 3.33.  The Agency for Electronic Communications (AEC) was established by the Law on Electronic 
Communications in 2005 as an independent nati onal regulatory body in the electronic 
communications markets. As a Regulator in the electronic communications markets, the AEC adopted a number regulations, guidelines, with  aim to facilitate the development of the 
competition in the market, providing innovative and quality of services for the end users, 
protection of the rights of the end users, mediat ion in the dispute resolution between the operators 
etc. According to these legal norms the electronic communications market is fully liberalised and free of any legal barriers for new players entry including foreign direct investments by 
internationally recognized and reputable operat ors of electronic communication networks. The 
participation of the foreign investments in the electronic communications markets is significant, bearing in mind that the largest one of these markets, the mobile market is fully covered with 
operators which are in direct foreign ownership. 
3.34.  AEC has developed a five year Strategy (2012-2016), document which includes an Action 
plan for the completed and the next regulatory st eps, providing to all operators clear picture and 
stability in their business plans in mid-term and helps to promoting investment, competition and 
innovation in electronic communication markets in Macedonia by providing regulatory certainty. At the moment, three licences have been granted for all three mobile operators for developing LTE at 800 MHz band. In fixed networks the biggest operator  MKT is the main builder of fibre network in 
the country. 
Tourism 3.35.  The Republic of Macedonia is a small country but it abounds in natural beauties and rarities. 
Attractive lakes, mountains and spas are the distinctive features of the country. The main tourist 
resorts are located around the three lakes, whic h are the best tourist attractions. Natural and 
spiritual beauties can be found in the most popular touristic destination Ohrid (city of UNESCO), 
situated on the shore of the lake, as a town-mus eum and a cultural treasury of Macedonia-often 
referred to as the “Balkan Jerusalem”. Macedonia is ecologically clean; the three national parks offer good conditions for pleasant recreation; the cultural heritage is testified by valuable archaeological sites. 
3.36.  The National Tourism Development Strategy 2009-2015 has been adopted, which envisages 
the development of different kinds of tourism: rural, lake tourism, wine tourism culture tourism and mountain with active sport. With its implementation Macedonia until 2020 will create image of 
recognizable European destination for tourism, based on the cultural and natural heritage and will 
be recognizable by the products and services se nsible for the environment and sustainable with 
high quality that are on level of the best inte rnational experiences. In 2011 a review of the 
Strategy through the World Bank BERIS project started in order to extend the activities of tourism 
development and to provide technical assistance  in reviewing and implementing of the new 
National Strategy for Tourism Development 2012-2017.  
3.37.  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 the 
policy of marketing and promotion and making new tourism product. The government provides incentive programmes to encourage tourism development through subsidizing tour operators and 
travel agencies offering complete tourism pack ages. The Programme for Promotion of Tourism for 
2012 is mainly focused on the overall promotion of the country on the international tourist stocks (Vakantiebeuers Utrecht, IFT Belgrade, ITV Berlin, EMIT Istanbul, Tel Aviv, Pristine, MATKA Finland 
and others), creation of special spot for tourism that is aired on renewed TV media  in many states 
in the world, visit of group of tour operators from different states and journalists from the area of tourism, organization of different business forums and conferences, preparation of printed promotion materials and others.  
3.38.  In 2011 a Committee on Tourism has been established chaired by the Prime Minister and 
with membership of institutions that are directly involved in the development of the tourism. The WT/TPR/G/290 • The former Yugoslav Republic of Macedonia 
 
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  Committee is reviewing and monitoring all activities in relation to the implementation of National 
Strategy for Tourism Development. 
4  MACEDONIA AND DOHA DEVELOPMENT ROUND OF MULTILATERAL TRADE 
NEGOTIATIONS 
4.1.  The Government has attached considerable importance to the Doha Development Agenda 
(DDA) negotiations. As a land-locked country, it closely monitors progress in the trade facilitation negotiations, as a challenge for all countries. Macedonia, as a continental country, with an open 
market economy, is very vulnerable to the efficiency of the movement of goods across borders. As 
trade facilitation can improve the efficiency of th e economy, Macedonia in the past years has paid 
attention to the trade facilitation concept development and made substantial progress toward improving of simplification, harmonisation of customs and trade procedures which resulted in more 
efficient and faster movement of goods across the borders. 
4.2.  On agriculture, it supports reforms in all three pillars (market access, domestic support and 
export subsidies) and agrees with the 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 Republic of Macedonia had committed to a very low level of domestic support, implemented substantial market access commitments and provides 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 that have been 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 negotiations regard ing public health, extending the list of patents 
regarding protection of biodiversity and tradit ional knowledge and achieving a higher level of 
protection of products with geographical indication. The country ratified the Protocol for Amending 
the TRIPS Agreement. 
5  CONCLUSION 5.1.  Throughout the reporting period, in order to integrate in the world economy, in the system of 
globalization created by free trade, Macedonia ha s conducted a policy of open market economy. 
The direction and dynamics of reforms in the trad ing system were determined by the Macedonia’s 
accession to the WTO, conclusion of SAA and FTAs.  
5.2.  Macedonia, due to the principle of liberali sation, has opened and liberalised the market of 
goods and services, implementing commitments undertaken during the WTO accession 
negotiations. In parallel, all laws and regulations governing the right to trade in goods, as well as other measures have been complied with Macedonia’s WTO commitments and are implemented in 
conformity with these obligations. 
5.3.  The Republic of Macedonia is supporting the DDA negotiations in WTO that are moving in 
direction of creating and strengthening of the WTO rules and as a Member participates in the 
relevant area of its interest. In this context, Macedonia is supporting positions recognised for 
granting a more favourable status for the Recently Acceded Memb ers of WTO (VRAMs). 
 
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