WORLD TRADE  
ORGANIZATION  WT/L/668 
4 December 2006 
 (06-5816) 
General Council 
14-15 December 2006 Original:   English 
 
 
 
EC – AUTONOMOUS PREFERENTIAL TREATMENT TO THE COUNTRIES 
OF THE WESTERN BALKANS 
 
Report of the European Community under the Decision of 8 December 20001 
 
 
 The following communication, dated 1 December 2006, is being circulated at the request of 
the Delegation of the European Commission.  
_______________ 
 
 
1. Introduction 
1. On 8 December 2000, the EU was granted a wa iver (WT/L/380) from its obligations under 
paragraph 1 of Article I of the GATT 1994 to the extent necessary to permit the European Community 
to afford duty-free or preferential treatment to e ligible products originating in Albania, Bosnia-
Herzegovina, Croatia, the former  Yugoslav Republic of Macedonia and Serbia and Montenegro, 
without being required to extend the same duty-free or  preferential treatment to like products of any 
other member.  This waiver will expire on 31 December 2006. 
2. With a view to maintaining the current system  in place, the European Community requested 
an extension of the Western Balkans Waiver, whic h was adopted by the WTO General Council at its 
meeting on 27-28 July 2006 (WT/L/654).  This waiver  covers products originating in Albania, Bosnia 
and Herzegovina, Croatia, the former Y ugoslav Republic of Macedonia, Montenegro
2 and the 
customs territories of Serbia and of Kosovo.3  The waiver will expire on 31 December 2011. 
3. Under the terms of this waiver, the European Community is required to submit to the General 
Council an annual report on the preferences and dut y-free treatment afforded to products from the 
countries listed in paragraph 1, including the extent  to which such preferen ces and duty-free treatment 
differ from the European Communities' MFN and G SP concessions, with a view to facilitating the 
annual review provided for in paragr aph 4 of Article IX of the WTO Agreement.  This report covers 
calendar year 2006. 
4. The EU trade regime vis-à-vis  these countries is currently regulated by the granting of 
autonomous trade preferences and by the conclusion of Stabilization and Association Agreements.  
5. As of 1 May 2004, the ten new EU Member States took over the above-mentioned EU trade 
regime towards the Western Balkans. To reflect this development, trade statistics presented below 
                                                      
1 WT/L/380. 
2 Montenegro held a referendum on independence on 21 May 2006 and declared its independence on 
3 June 2006. 
3 Pursuant to United Nations Security Council Resolution 1244. WT/L/668 
Page 2  
 
  were recalculated for the EU at 25 Member States. As data for the full current year are not yet 
available, statistics presented relate to the year 2005. 
2. Autonomous trade preferences 
6. Before 2000, the European Union already had a liberal trade regime towards the Western 
Balkans, allowing more than 80 per cent of regional exports to enter the European Union duty-free.  
On 1 December 2000 the EU Council of Ministers ex tended the duty-free access to the EU market for 
products originating from this area even further. 
7. The reason for such an extension was that th e general level of imports from the Western 
Balkans countries remained very low, being less than  one per cent of all Community imports.  It was, 
therefore, considered appropriate to further im prove the Community's autonomous trade preferences 
by removing all remaining tariff ceilings for indu strial and agricultural products and by further 
improving access to the Community market for agricultural and fishery products. 
8. Further market opening is expected to contribute to the process of political and economic 
stabilisation in the region.  Fully liberalized access  to the markets of the European Union is also 
foreseen as part of the Stabilization and Association Agreements. 
3. The Stabilization and Association Agreements 
9. The Stabilization and Association Agreements, which the EU is progressively concluding 
with the countries of the Western Balkans, are tools  which provide, much as the Europe Agreements 
did for the candidate countries in Central Euro pe, for the economic development and political 
stabilisation of the countries in the region, and to establish a close, long-term association between the 
EU and the Western Balkans. 
10. The Stabilization and Association Agreements aim at creating a free trade area for goods 
among the parties over a transitional period in line with Article XXIV of the GATT 1994 and 
envisages a progressive and reciprocal liberalisation of  trade in services.  Associated disciplines in 
areas such as competition and state aid rules, intell ectual property, public procurement, etc. are also 
envisaged. 
11. Three agreements of this kind have been conc luded so far.  One with the former Yugoslav 
Republic of Macedonia, one with Croatia and, more recently, one with Albania.  The trade provisions 
of the first two agreements entered into force on,  respectively, 1 June 2001 for the former Yugoslav 
Republic of Macedonia and 1 March 2002 for Croatia , by means of interim agreements.  Both 
agreements establish a free trade ar ea with the concerned country in line with the obligations foreseen 
in Article XXIV of the GATT 1994.  At the same ti me they allow the continuation of the autonomous 
preferences where these provide more favourable c onditions for the export of the goods originating in 
Croatia, the former Yugoslav Repub lic of Macedonia and Albania.  
12. The Stabilisation and Association Agreemen t with the former Yugoslav Republic of 
Macedonia entered into force on 1 April 2004. That w ith Croatia entered in force on 1 February 2005. 
13. More recently, the Stabilisation and Associa tion Agreement with Albania was signed in 
Luxembourg on 12 June 2006.  The ratification process is ongoing. This agreement will enter into 
force on 1 December 2006, by means of an interim agreement.  WT/L/668 
 Page 3 
 
 
  4. Trade with the countries of the Western Balkans 
14. In the year 2005 EU imports from the Western Ba lkans concentrated primarily on agricultural 
and textile products. However, the trade balance fo r the countries of the Western Balkans remained 
negative for all sectors.  Total trade with the Wester n Balkans remained also low, at 1.3 per cent of 
total EU trade with the rest of the world. The st abilization of the area and the new export opportunities 
described in the precedent paragraphs should help the Western Balkans countries to diversify their 
economies and to ameliorate such a trade balance. 
15. Statistical annexes are provided to present a de tailed description of the EU trade relations 
with the countries of the Western Balkans for the year 20054.  The first annex describes the trade 
relations with the countries of the Western Balkan s as a whole, while the remaining annexes describe 
in detail the trade relations with each country of the region. 
 
                                                      
4 To a large extent, separate statistics for Serb ia and Montenegro are not available yet as this 
information is available on a separate basis only since June 2005. That is why we also present some updated 
statistics on Serbia and Montenegro together. WT/L/668 
Page 4  
 
   
ANNEX 1: WESTERN BALKANS 
 
 
 
POPULATION in Mio 
(2005)  24.0 
AREA in 1,000skm 
(2006)  265 
Gross Domestic Product 
in Bn euro (2005)  70 
GDP Per Capita  in euro 
(2005)  2,917 
 
 
 
EU-25 TRADE WITH WESTERN BALKANS  
 
 
 IMPORTS 
 EXPORTS 
 TRADE 
BALANCE 
 Value (mio €) Share of EU 
total (%) Value (mio €) Share of EU 
total (%) Value (mio €) 
2000 5,532 0.6 12,468 1.5 6,936 
2002 6,238 0.67 16,788 1.86 10,551 
2003 6,641 0.71 17,274 1.97 10,663 
2004 7,819 0.76 19,530 2.03 11,711 
2005 7,551 0.64 17,648 1.66 10,097 
 
 
 
MAIN PRODUCTS IN 2005  
 
 
EU IMPORTS 
 EU EXPORTS BALANCE 
 
Products Value 
(mio€) Western 
Balkan's 
share by 
product  
Products Value 
(mio€) Western 
Balkan's 
share by 
product Value 
(mio€) 
Agricultural 
products 988 1.22 Agricultural 
products 1,769 2.86 781 
Energy 253 0.10 Energy 620 1.59 367 
Machinery 924 0.33 Machinery 3,912 1.26 2,988 
Transport. 
Material 526 0.54 Transport. 
Material 2,222 1.33 1,696 
Chemical 
products 436 0.47 Chemical 
products 2,175 1.33 1,739 
Textiles and 
clothing 1,054 1.50 Textiles and 
clothing 1,262 3.83 208 
 
World*:  Intra-EU excluded. 
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM). 
   WT/L/668 
 Page 5 
 
 
   
ANNEX 2: ALBANIA 
 
 
 
POPULATION in Mio 
(2005)  3.6 
AREA in 1,000skm 
(2006)  29 
Gross Domestic Product 
in Bn euro (2005)  7 
GDP Per Capita  in euro 
(2005)  1,888 
 
 
 
EU-25 TRADE WITH ALBANIA 
 
 
 
 IMPORTS 
Rank 2005: 89 EXPORTS 
Rank 2005: 65 TRADE 
BALANCE 
 Value (mio €) Share of EU 
total (%) Value (mio €) Share of EU 
total (%) Value (mio €) 
2000 279 0.03 836 0.1 557 
2002 336 0.04 1,117 0.12 781 
2003 360 0.04 1,115 0.13 755 
2004 397 0.04 1,218 0.13 821 
2005 459 0.04 1,321 0.12 862 
 
  
 
MAIN PRODUCTS IN 2005 
 
 
EU IMPORTS 
 EU EXPORTS BALANCE 
 
Products Value 
(mio€) Albania's 
share by 
product  
Products Value 
(mio€) Albania's 
share by 
product Value 
(mio€) 
Agricultural 
products 35 0.04 Agricultural 
products 179 0.29 144 
Energy 11 0.00 Energy 67 0.17 56 
Machinery 19 0.01 Machinery 256 0.08 237 
Transport. 
Material 48 0.05 Transport. 
Material 80 0.05 32 
Chemical 
products 1 0.00 Chemical 
products 123 0.08 122 
Textiles and 
clothing 109 0.15 Textiles and 
clothing 152 0.46 43 
 
World*:  Intra-EU excluded. 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).  WT/L/668 
Page 6  
 
  PLACE OF ALBANIA IN EU TRADE (2005) 
 
 
 
EU IMPORTS EU EXPORTS 
 
Products  
Rank Value 
€M Share by 
products 
(%) Share 
of total 
(%)  
Rank Value 
€M Shareby 
products 
(%) Share 
of total 
(%) 
Total 89 459 0.04 100.0 65 1,321 0.12 100.0 
Agricultural 
products 110 35 0.04 7.7 50 179 0.29 13.5 
Energy 73 11 0.00 2.3 43 67 0.17 5.1 
Non agr. 
Raw 
materials 75 0 0.00 0.0 70 5 0.14 0.4 
Office 
machinery and telec 
equipment 57 5 0.00 1.2 76 65 0.07 4.9 
Power 
generating 
machinery 70 7 0.01 1.5 76 125 0.08 9.5 
Transport 
materials 59 48 0.05 10.4 87 80 0.05 6.1 
Chemicals 99 1 0.00 0.2 70 123 0.08 9.3 
Textiles 
and 
clothing 44 109 0.15 23.6 32 152 0.46 11.5 
Iron and 
steel 70 0 0.00 0.1 63 26 0.12 1.9 
 
Source:  EUROSTAT (COMEXT). 
  WT/L/668 
 Page 7 
 
 
  ANNEX 3: BOSNIA HERZEGOVINA 
 
  
POPULATION in Mio 
(2005)  3.9 
AREA in 1,000skm 
(2006)  51 
 
Gross Domestic Product 
in Bn euro (2005)  8 
GDP Per Capita  in euro 
(2005)  1,933 
 
  
EU-25 TRADE WITH BOSNIA HERZEGOVINA  
  
 IMPORTS 
Rank 2005: 64 EXPORTS 
Rank 2005: 49 TRADE 
BALANCE 
 Value (mio €) Share of EU 
total (%) Value (mio €) Share of EU 
total (%) Value (mio €) 
2000 610 0.06 1,853 0.22 1,243 
2002 719 0.08 2,273 0.25 1,554 
2003 847 0.09 2,190 0.25 1,343 
2004 984 0.10 2,347 0.24 1,363 
2005 1328 0.11 2,714 0.26 1,386 
 
 
 
MAIN PRODUCTS IN 2005  
 
 
EU IMPORTS 
 EU EXPORTS BALANCE 
 
Products Value 
(mio€) Bosnia's 
share by 
product  
Products Value 
(mio€) Bosnia's 
share by 
product Value 
(mio€) 
Agricultural 
products 142 0.18 Agricultural 
products 344 0.56 202 
Energy 33 0.01 Energy 93 0.24 60 
Machinery 110 0.04 Machinery 538 0.17 428 
Transport. 
Material 195 0.20 Transport. 
Material 322 0.19 127 
Chemical 
products 30 0.03 Chemical 
products 286 0.18 256 
Textiles and 
clothing 122 0.17 Textiles and 
clothing 188 0.57 66 
 
World*:  Intra-EU excluded. 
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM).  WT/L/668 
Page 8  
 
  PLACE OF BOSNIA HERZEGOVINA IN EU TRADE (2005) 
  
EU IMPORTS EU EXPORTS 
 
Products  
Rank Value 
€M Share by 
products 
(%) Share 
of total 
(%)  
Rank Value 
€M Shareby 
products 
(%) Share 
of total 
(%) 
Total 64 1328 0.11 100.0 49 2,714 0.26 100.0 
Agricultural 
products 73 142 0.18 10.7 34 344 0.56 12.7 
Energy 64 33 0.01 2.5 39 93 0.24 3.4 
Non agr. 
Raw 
materials 51 1 0.00 0.1 44 16 0.24 0.6 
Office 
machinery 
and telec equipment 61 4 0.00 0.3 58 133 0.14 4.9 
Power 
generating 
machinery 33 91 0.13 6.8 58 298 0.18 11.0 
Transport 
materials 41 195 0.20 14.7 52 322 0.19 11.9 
Chemicals 56 30 0.03 2.3 50 186 0.18 10.5 
Textiles 
and clothing 41 122 0.17 9.2 26 188 0.57 6.9 
Iron and 
steel 35 31 0.20 2.3 41 89 0.42 3.3 
 
Source:  EUROSTAT (COMEXT).  WT/L/668 
 Page 9 
 
 
  ANNEX 4: CROATIA 
 
 
POPULATION in Mio 
(2005)  4.5 
AREA in 1,000skm 
(2006)  57 
Gross Domestic Product 
in Bn euro (2005)  30 
 
GDP Per Capita  in euro 
(2005)  6,708 
 
  
 
EU-25 TRADE WITH CROATIA  
 
 
 IMPORTS 
Rank 2005: 41 EXPORTS 
Rank 2005: 27 TRADE 
BALANCE 
 Value (mio €) Share of EU 
total (%) Value (mio €) Share of EU 
total (%) Value (mio €) 
2000 2,860 0.29 5,893 0.69 3,033 
2002 3,078 0.33 8,261 0.92 5,183 
2003 3,301 0.35 8,889 1.01 5,587 
2004 3,928 0.38 9,785 1.01 5,857 
2005 3,979 0.34 10,402 0.98 6,423 
 
 
 
MAIN PRODUCTS IN 2005 
 
 
EU IMPORTS 
 EU EXPORTS BALANCE 
 
Products Value 
(mio€) Croatia's 
share by 
product  
Products Value 
(mio€) Croatia's 
share by 
product Value 
(mio€) 
Agricultural products 526 0.65 Agricultural 
products 935 1.51 409 
Energy 204 0.08 Energy 363 0.93 159 
Machinery 723 0.26 Machinery 2,354 0.76 1,631 
Transport. 
Material 258 0.27 Transport. 
Material 1,499 0.90 1,241 
Chemical 
products 350 0.37 Chemical 
products 1,322 0.81 972 
Textiles and 
clothing 459 0.65 Textiles and 
clothing 578 1.75 119 
 
World*:  Intra-EU excluded. 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).  WT/L/668 
Page 10  
 
  PLACE OF CROATIA IN EU TRADE (2005) 
  
EU IMPORTS EU EXPORTS 
 
Products  
Rank Value 
€M Share by 
products 
(%) Share 
of total 
(%)  
Rank Value 
€M Shareby 
products 
(%) Share 
of total 
(%) 
Total 41 3979 0.34 100.0 27 10,402 0.98 100.0 
Agricultural 
products 34 526 0.65 13.2 16 935 1.51 9.0 
Energy 48 204 0.08 5.1 16 363 0.93 3.5 
Non agr. 
Raw 
materials 25 15 0.04 0.4 36 27 0.59 0.3 
Office 
machinery 
and telec equipment 32 74 0.05 1.9 32 570 0.60 5.5 
Power 
generating 
machinery 25 299 0.41 7.5 28 1,188 0.72 11.4 
Transport 
materials 35 258 0.27 6.5 24 1,499 0.90 14.4 
Chemicals 24 350 0.37 8.8 26 1,322 0.81 12.7 
Textiles 
and clothing 26 459 0.65 11.5 15 578 1.75 5.6 
Iron and 
steel 40 19 0.12 0.5 21 261 1.23 2.5 
 
Source:  EUROSTAT (COMEXT). 
  WT/L/668 
 Page 11 
 
 
  ANNEX 5: FORMER YUGOSLAV REPUBLIC OF MACEDONIA (FYROM) 
 
 
POPULATION in Mio 
(2005)  2.1 
 
AREA in 1,000skm 
(2006)  26 
 
Gross Domestic Product 
in Bn euro (2005)  4 
 
GDP Per Capita  in euro 
(2005)  1,954 
 
 
 
 
EU-25 TRADE WITH FYROM  
 
 
 IMPORTS 
Rank 2005: 73 EXPORTS 
Rank 2005: 63 TRADE 
BALANCE 
 Value (mio €) Share of EU 
total (%) Value (mio €) Share of EU 
total (%) Value (mio €) 
2000 813 0.08 1,584 0.18 771 
2002 593 0.06 1,264 0.14 671 
2003 674 0.07 1,152 0.13 478 
2004 777 0.08 1,253 0.13 476 
2005 948 0.08 1,343 0.13 395 
 
 
 
MAIN PRODUCTS IN 2005 
 
 
EU IMPORTS 
 EU EXPORTS BALANCE 
 
Products Value 
(mio€) FYROM's 
share by 
product  
Products Value 
(mio€) FYROM's 
share by 
product Value 
(mio€) 
Agricultural 
products 123 0.15 Agricultural 
products 170 0.28 54 
Energy 3 0.00 Energy 56 0.14 53 
Machinery 27 0.01 Machinery 213 0.07 186 
Transport. 
Material 8 0.01 Transport. 
Material 116 0.07 108 
Chemical 
products 7 0.01 Chemical 
products 157 0.10 150 
Textiles and 
clothing 300 0.43 Textiles and 
clothing 235 0.71 -65 
 
World*:  Intra-EU excluded. 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM). WT/L/668 
Page 12  
 
   
PLACE OF FYROM IN EU TRADE – 2005 
 
 
EU IMPORTS EU EXPORTS 
 
Products  
Rank Value 
€M Share by 
products 
(%) Share 
of total 
(%)  
Rank Value 
€M Shareby 
products 
(%) Share 
of total 
(%) 
Total 73 948 0.08 100.0 63 1,343 0.13 100.0
Agricultural 
products 79 123 0.15 13.0 53 170 0.28 12.6
Energy 77 3 0.00 0.4 45 56 0.14 4.2
Non agr. 
Raw 
materials 73 0 0.00 0.0 86 2 0.11 0.1
Office 
machinery and telec 
equipment 82 2 0.00 0.2 72 71 0.07 5.3
Power 
generating 
machinery 64 8 0.01 0.9 82 103 0.06 7.7
Transport 
materials 87 8 0.01 0.9 76 116 0.07 8.6
Chemicals 70 7 0.01 0.8 59 157 0.10 11.7
Textiles 
and 
clothing 30 300 0.43 31.6 25 235 0.71 17.5
Iron and 
steel 21 195 0.26 20.6 44 79 0.37 5.9
 
Source: EUROSTAT (COMEXT). WT/L/668 
 Page 13 
 
 
  ANNEX 6: SERBIA 
 
  
POPULATION in Mio 
(2005)  9.4 
AREA in 1,000skm 
(2006)  88 
 
 
Gross Domestic Product 
for Serbia and 
Montenegro in Bn euro 
(2005)  21 
GDP Per Capita for 
Serbia and Montenegro  
in euro (2005)  2533 
 
 
 
 
EU-25 TRADE WITH SERBIA AN D MONTENEGRO UNTIL 2005 
 
 
 IMPORTS 
Rank 2005: 56 EXPORTS 
Rank 2005: 34 TRADE 
BALANCE 
 Value (mio €) Share of EU 
total (%) Value (mio €) Share of EU 
total (%) Value (mio €) 
2000 970 0.1 2,302 0.27 1,332 
2002 1,511 0.16 3,873 0.43 2,362 
2003 1,459 0.16 3,929 0.45 2,470 
2004 1,732 0.17 4,927 0.51 3,195 
2005 2,107 0.18 4,812 0.45 2,706 
 
 
 
 
 
EU-25 TRADE WITH SERBIA SINCE JUNE 2005 
 
 
 IMPORTS 
 EXPORTS 
 TRADE 
BALANCE 
 Value (mio €) Share of EU 
total (%) Value (mio €) Share of EU 
total (%) Value (mio €) 
June 2005 -
May 2006 2,184 0.17 4,606 0.41 2,422 
 
 
 WT/L/668 
Page 14  
 
   
MAIN PRODUCTS (SERBIA AND MONTENEGRO) IN 2005  
 
 
EU IMPORTS 
 EU EXPORTS BALANCE 
 
Products Value 
(mio€) S&M's 
share by 
product  
Products Value 
(mio€) S&M's 
share by 
product Value 
(mio€) 
Agricultural 
products 447 0.55 Agricultural 
products 319 0.52 -128 
Energy 4 0.00 Energy 153 0.39 149 
Machinery 119 0.04 Machinery 1334 0.43 1215 
Transport. 
Material 37 0.04 Transport. 
Material 525 0.32 488 
Chemical 
products 133 0.14 Chemical 
products 732 0.45 599 
Textiles and 
clothing 180 0.26 Textiles and 
clothing 293 0.89 113 
 
World*:  Intra-EU excluded. 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM). 
  
PLACE OF SERBIA AND MONTENEGRO IN EU TRADE (2005) 
 
EU IMPORTS EU EXPORTS 
 
Products  
Rank Value 
€M Share by 
products 
(%) Share 
of total 
(%)  
Rank Value 
€M Shareby 
products (%) Share 
of total 
(%) 
Total  2,107 0.18 100.0 4,812 0.45  100.0 
Agricultural 
products  
447 0.55 21.2 319  0.52  6.6 
Energy  4 0.00 0.2 153  0.39  3.2 
Non agr. 
Raw 
materials  
27 0.00 1.3 23  0.30  0.5 
Office 
machinery and telec 
equipment  
9 0.01 0.4 377  0.39  7.8 
Power 
generating machinery  
86 0.12 4.1 739  0.45  15.4 
Transport 
materials  37 0.04 1.8 525  0.32  10.9 
Chemicals  133 0.14 6.3 732  0.45  15.2 
Textiles 
and 
clothing  
180 0.26 8.6 293  0.89  6.1 
Iron and 
steel  103 0.67 4.9 106  0.50  2.2 
Source:  EUROSTAT (COMEXT).  WT/L/668 
 Page 15 
 
 
  ANNEX 7: MONTENEGRO 
 
 
POPULATION in Mio 
(2006)  0.6 
AREA in 1,000skm 
(2006)  14 
 
 
EU-25 TRADE WITH MONTEN EGRO SINCE JUNE 2005 
 
 
 IMPORTS 
 EXPORTS 
 TRADE 
BALANCE 
 Value (mio €) Share of EU 
total (%) Value (mio €) Share of EU 
total (%) Value (mio €) 
June 2005 – 
May 2006 191 0.02 486 0.04 295 
 
__________