WORLD TRADE  
ORGANIZATION  WT/L/731/Rev.1 
23 July 2008 
 (08-3555) 
General Council 
29-30 July 2008 Original:   English 
 
 
 
EUROPEAN COMMUNITIES' PREFERENCES FOR ALBANIA, BOSNIA AND 
HERZEGOVINA, CROATIA, SERBIA AND MONTENEGRO AND THE FORMER 
YUGOSLAV REPUBLIC OF MACEDONIA 
 
Report of the European Community un der the Decision of 28 July 20061 
 
Revision  
 
 
 The following communication, dated 22 July 2008, 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 expired 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 Yugoslav Republic of Macedonia, Montenegro, Serbia and 
Kosovo
2.  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 
the calendar year 2007. 
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 January 2007, the two new EU Member States, Romania and Bulgaria, took over the 
above-mentioned EU trade regime to wards the Western Balkans.  To reflect this development, trade 
                                                      
1 WT/L/654. 
2 Under United Nations Security Council Resolution 1244. WT/L/731/Rev.1 
Page 2  
 
  statistics presented below were recalculated for the EU at 27 Member States.  As data for the full 
current year are not yet available, statistics presented relate to the year 2007. 
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 
stabilization in the region.  Fully liberalized acce ss 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 
stabilization 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 liberalization 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. Six agreements of this kind have been concl uded so far.  One with the former Yugoslav 
Republic of Macedonia, one with Croatia, one with  Albania and more recently with Bosnia and 
Herzegovina, Montenegro and Serbia.  The Stabiliza tion and Association Agreement with the former 
Yugoslav Republic of Macedonia entered into for ce on 1 April 2004 and the one with Croatia on 1 
February 2005.  The Stabilization and Association Agreement with Albania, Bosnia and Herzegovina, 
Montenegro and Serbia are undergoing ratification in each EU Member State.  
12. As the ratification procedures of these Stabilization and Association Agreements take a 
significant period of time, the trade provisions of these  agreements entered into force on, respectively, 
1 June 2001 for the former Yugoslav Republic  of Macedonia, 1 March 2002 for Croatia, 1
 December 
2006 for Albania, 1 January 2008 for Montenegro, 1 July 2008 for Bosnia and Herzegovina by means 
of interim agreements.  The entry in to force of the interim agreement with Serbia is suspended subject 
to fulfilling by Serbia of the conditions attached to  it.  All the agreements establish a free trade area 
with the concerned country in line with the obliga tions foreseen in Article XXIV of the GATT 1994.  
At the same time they allow the continuation of  the autonomous preferences where these provide 
more favourable conditions for the export of the goods originating in Croatia, the former Yugoslav 
Republic of Macedonia, Albania, Bosnia and Herze govina, Montenegro and also for Serbia once the 
interim agreement enters into force.  At the presen t moment almost all the countries in the region have  WT/L/731/Rev.1 
 Page 3 
 
 
  in place interim agreements or stabilization and associ ation agreements with the EU.  Hence, keeping 
the autonomous preferences is of most importance for Kosovo. 
4. Trade with the countries of the Western Balkans 
13. In the year 2007 EU imports from the Western Ba lkans concentrated primarily on agricultural 
and textile products.  However, the trade balance for the countries of the Western Balkans remained 
negative for all sectors.  Total trade with the Wester n Balkans remained also low, at 1.6 per cent of 
total EU trade with the rest of the world.  The stabilization of the area and the new export 
opportunities described in the precedent paragraphs  should help the Western Balkans countries to 
diversify their economies and to am eliorate such a trade balance. 
14. 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 20073.  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. 
                                                      
3 To a large extent, separate statistics for Serbia a nd Montenegro are not availa ble yet. That is why we 
also present some updated statistics on Serbia and Montenegro together. WT/L/731/Rev.1 
Page 4  
 
  ANNEX 1: WESTERN BALKANS 
 
Population in Mio  20 
Area in 1000skm (2007) 264 
Gross Domestic Product in BN € 83 
GDP Per Capita in euro 4,134 
 
EU 27 TRADE WITH WESTERN BALKANS 
  
  IMPORTS 
Rank 2007:24 EXPORTS  
Rank 2007:11 TRADE  
BALANCE 
Year Value 
(Mio €) Share of 
total  
EU imports  
(%) Value  
(Mio €) Share of 
total  
EU exports 
(%) Value  
(Mio €) 
2003 6,784   0.7   17,992  2.1   11,208  
2004 8,073   0.8   20,554  2.2   12,480  
2005 8,990 0.8 21,429 2.0 12,439 
2006 11,544   0.9   24,929  2.2   13,385  
2007 13,291   0.9   28,782  2.3   15,491  
 
MAIN PRODUCTS IN 2007 
EU 27 Imports EU 27 Exports Balance 
SITC Rev.3  
Product 
Groups Value  
(Mio €) Share by 
products  
(%) Share of 
totals 
(%) SITC Rev.3 
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share of 
totals 
(%) Value 
(Mio €) 
TOTAL 13,291 0.93   100.0 TOTAL 28,782 2.3   100.0 15,491   
Agricultural products 1,586   1.69   11.9 Agricultural 
products 2,370   3.3   8.2 784   
Energy 338   0.10   2.5 Energy 1,720   2.8   6.0 1,382   
Non-
agricultural 
raw materials 42   0.06   0.3 Non-
agricultural 
raw materials 97   2.0   0.3 55   
Office/telecom. 
Equipment 96   0.18   0.7 Office/telecom. 
Equipment 401   1.7   1.4 304   
Power/non-
electrical 
mach. 886   1.11   6.7 Power/non-
electrical 
mach. 3,066   1.6   10.7 2,180   
Transport 
equipment 531   0.59   4.0 Transport 
equipment 3,541   2.1   12.3 3,010   
Chemicals 853   0.75   6.4 Chemicals 3,609   1.9   12.5 2,756   
Textiles and 
clothing 1,365   1.73   10.3 Textiles and 
clothing 1,716   5.1   6.0 350   
Iron and steel 1,527   3.75   11.5 Iron and steel 1,220   3.5   4.2 -307   
 
World excluding Intra-EU trade and European Union: 27 members. 
 
Source : Eurostat (Comext), FMI.  WT/L/731/Rev.1 
 Page 5 
 
 
  ANNEX 2: ALBANIA 
 
Population in Mio  3 
Area in 1000skm (2007) 29 
Gross Domestic Product in BN € 7 
GDP Per Capita in euro 2,317 
 
EU 27 TRADE WITH ALBANIA 
  
  IMPORTS 
Rank 2007: 88 EXPORTS  
Rank 2007: 62 TRADE 
BALANCE 
Year Value 
(Mio €) Share of 
total 
EU imports 
(%) Value 
(Mio €) Share of 
total 
EU exports 
(%) Value 
(Mio €) 
2003 360 0.04 1,156 0.1 795 
2004 398 0.04 1,276 0.1 878 
2005 417 0.04 1,383 0.1 966 
2006 496 0.04 1,541 0.1 1,045 
2007 602 0.04 1,805 0.1 1,203 
 
MAIN PRODUCTS 2007 
EU 27 Imports  EU 27 Exports Balance 
SITC Rev.3  
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share 
of 
totals 
(%) SITC Rev.3 
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share 
of 
totals 
(%) Value 
(Mio €) 
TOTAL 602 0.0 100.0 TOTAL 1,805 0.1 100.0 1,203 
Agricultural products 35 0.0 5.8 Agricultural 
products 249 0.3 13.8 214 
Energy 40 0.0 6.6 Energy 180 0.3 10.0 140 
Non-
agricultural raw 
materials 1 0.0 0.1 Non-
agricultural raw 
materials 7 0.2 0.4 7 
Office/telecom 
Equipment 0 0.0 0.1 Office/telecom 
Equipment 18 0.1 1.0 17 
Power/non-electrical mach . 14 0.0 2.4 Power/non-
electrical mach. 159 0.1 8.8 144 
Transport 
equipment 2 0.0 0.3 Transport 
equipment 113 0.1 6.3 111 
Chemicals 1 0.0 0.1 Chemicals 184 0.1 10.2 184 
Textiles and 
clothing 157 0.2 26.0 Textiles and 
clothing 187 0.6 10.4 30 
Iron and steel 3 0.0 0.5 Iron and steel 43 0.1 2.4 41 
 
World excluding Intra-EU trade and European Union: 27 members. 
 
Source : Eurostat (Comext), FMI. WT/L/731/Rev.1 
Page 6  
 
  ANNEX 3: BOSNIA AND HERZEGOVINA 
 
Population in Mio  4 
Area in 1000skm (2007) 51 
Gross Domestic Product in BN euro  10 
GDP Per Capita in euro 2,412 
 
EU 27 TRADE WITH BOSNIA AND HERZEGOVINA 
  
  IMPORTS 
Rank 2007: 65 EXPORTS  
Rank 2007: 55 TRADE 
BALANCE 
Year Value 
(Mio €) Share of 
total  
EU imports 
(%) Value  
(Mio €) Share of 
total  
EU exports 
(%) Value  
(Mio €) 
2003 848 0.1 2,215 0.3 1,367 
2004 1,019 0.1 2,388 0.3 1,369 
2005 1,332 0.1 2,871 0.3 1,538 
2006 1,725 0.1 2,882 0.2 1,158 
2007 1,829 0.1 3,123 0.3 1,293 
 
MAIN PRODUCTS 2007 
EU 27 Imports  EU 27 Exports  Balance 
SITC 
Rev.3 
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share of 
totals 
(%) SITC 
Rev.3 
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share of 
totals 
(%) Value 
(Mio €) 
TOTAL 1,829 0.1 100.0 TOTAL 3,123 0.3 100.0 1,293 
Agricultural 
products 170 0.2 9.3 Agricultural 
products 338 0.5 10.8 168 
Energy 24 0.0 1.3 Energy 74 0.1 2.4 50 
Non-
agricultural 
raw materials 1 0.0 0.1 Non-
agricultural 
raw materials 22 0.1 0.7 21 
Office/ 
telecom 
Equipment 1 0.0 0.0 Office/ 
telecom 
Equipment 27 0.1 0.9 27 
Power/non-
electrical 
mach. 173 0.2 9.4 Power/non-
electrical 
mach. 354 0.2 11.3 181 
Transport 
equipment 150 0.2 8.2 Transport 
equipment 390 0.2 12.5 241 
Chemicals 55 0.0 3.0 Chemicals 382 0.2 12.2 328 
Textiles and clothing 133 0.2 7.3 Textiles and 
clothing 194 0.6 6.2 61 
Iron and 
steel 80 0.2 4.4 Iron and 
steel 126 0.4 4.0 46 
 
World excluding Intra-EU trade and European Union: 27 members. 
 Source : Eurostat (Comext), FMI.  WT/L/731/Rev.1 
 Page 7 
 
 
  ANNEX 4: CROATIA 
 
 
 
  
 
 
EU 27 TRADE WITH CROATIA 
  
  IMPORTS 
Rank 2007: 45 EXPORTS 
Rank 2007:23 TRADE 
BALANCE 
Year Value 
(Mio €) Share of 
total  
EU imports 
(%) Value 
(Mio €) Share of 
total 
EU exports 
(%) Value 
(Mio €) 
2003 3,347 0.36 9,037 1.04 5,689 
2004 4,004 0.39 9,971 1.05 5,967 
2005 4,077 0.35 10,732 1.02 6,654 
2006 4,891 0.36 12,362 1.07 7,472 
2007 4,974 0.35 13,256 1.07 8,281 
 
MAIN PRODUCTS 2007 
EU 27 Imports EU 27 Exports  Balance  
SITC Rev.3  
Product 
Groups Value (Mio 
€) Share by 
products 
(%) Share 
of 
totals 
(%) SITC 
Rev.3  
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share 
of totals 
(%) Value 
(Mio €) 
TOTAL 4,974 0.3 100 .0 TOTAL 13,256 1.1 100 .0 8,281 
Agricultural 
products 612 0.7 12.3 Agricultural 
products 1,119 1.5 8.4 507 
Energy 240 0.1 4.8 Energy 854 1.4 6.4 614 
Non-
agricultural raw materials 19 0.0 0.4 Non-
agricultural raw materials 29 1.0 0.2 11 
Office/ 
telecom. 
Equipment 90 0.2 1.8 Office/ 
telecom. 
Equipment 201 0.9 1.5 110 
Power/non-
electrical 
mach. 461 0.6 9.3 Power/non-
electrical 
mach. 1,345 0.7 10.1 884 
Transport 
equipment 252 0.3 5.1 Transport 
equipment 1,799 1.1 13.6 1,548 
Chemicals 429 0.4 8.6 Chemicals 1,607 0.8 12.1 1,178 
Textiles and 
clothing 408 0.5 8.2 Textiles and 
clothing 658 2.0 5.0 249 
Iron and steel 34 0.1 0.7 Iron and steel 581 1.7 4.4 547 
 
World excluding Intra-EU trade and European Union: 27 members.  
Source : Eurostat (Comext), FMI. Population in Mio  4 
Area in 1000skm (2007) 57 
Gross Domestic Product in BN € 35 
GDP Per Capita in euro 7,790 WT/L/731/Rev.1 
Page 8  
 
  ANNEX 5: FORMER YUGOSLAV REPUBLIC OF MACEDONIA 
 
 
 
  
 
 
EU 27 TRADE WITH FORMER YUGOSLAV REPUBLIC OF MACEDONIA 
    IMPORTS 
Rank 2007:63 EXPORTS  
Rank 2007: 61 TRADE 
BALANCE 
Year Value 
(Mio €) Share of 
total  
EU imports 
(%) Value 
(Mio €) Share of 
total  
EU exports  
(%) Value 
(Mio €) 
2003 701 0.07 1,299 0.15 598 
2004 820 0.08 1,517 0.16 697 
2005 1,018 0.09 1,567 0.15 550 
2006 1,304 0.10 1,832 0.16 528 
2007 1,866 0.13 2,082 0.17 217 
 
MAIN PRODUCTS 2007 
EU 27 Imports EU 27 Exports Balance 
SITC Rev.3 
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share 
of 
totals 
(%) SITC Rev.3 
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share 
of 
totals 
(%) Value 
(Mio €) 
TOTAL 1,866 0.1 100.0TOTAL 2,082 0.2 100 .0 217 
Agricultural 
products 173 0.2 9.3 Agricultural 
products 192 0.3 9.2 19 
Energy 3 0.0 0.2 Energy 95 0.2 4.6 92 
Non-
agricultural 
raw materials 0 0.0 0.0 Non-
agricultural 
raw materials 5 0.1 0.2 4 
Office/ 
telecom. 
Equipment 1 0.0 0.0 Office/ 
telecom. 
Equipment 24 0.1 1.2 24 
Power/non-
electrical 
mach. 13 0.0 0.7 Power/non-
electrical 
mach. 154 0.1 7.4 142 
Transport 
equipment 8 0.0 0.4 Transport 
equipment 201 0.1 9.7 194 
Chemicals 22 0.0 1.2 Chemicals 228 0.1 11.0 206 
Textiles and 
clothing 477 0.6 25.6 Textiles and 
clothing 312 0.9 15.0 -165 
Iron and steel 756 1.9 40.5 Iron and steel 178 0.5 8.6 -578 
 
World excluding Intra-EU trade and European Union: 27 members. 
 Source : Eurostat (Comext), FMI. 
 Population in Mio  2 
Area in 1000skm (2007) 26 
Gross Domestic Product in BN € 5 
GDP Per Capita in euro 2,561  WT/L/731/Rev.1 
 Page 9 
 
 
  ANNEX 6: SERBIA 
 
 
 
  
 
 
EU 27 TRADE WITH SERBIA 
    IMPORTS 
Rank 2007: 53 EXPORTS  
Rank 2007: 33 TRADE 
BALANCE 
Year Value  
(Mio €) Share of 
total  
EU imports 
(%) Value 
(Mio €) Share of 
total  
EU exports 
(%) Value 
(Mio €) 
2005* 1,177   0.1  2.610  0.2  1,433  
2006 2,835   0.2  5.792  0.5  2,957  
2007 3,677   0.3  7.845  0.6  4,168  
2005* : June 2005-December 2005 
 
MAIN PRODUCTS 2007 
EU 27 Imports  EU 27 Exports  Balance 
SITC 
Rev.3  
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share 
of 
totals 
(%) SITC 
Rev.3  
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share 
of 
totals 
(%) Value 
(Mio €) 
TOTAL 3,677 0.3 100.0 TOTAL 7,845 0.6 100.0 4,168 
Agricultural 
products 589 0.6 16.0 Agricultural 
products 384 0.5 4.9 -205 
Energy 31 0.0 0.8 Energy 460 0.7 5.9 429 
Non-
agricultural raw 
materials 21 0.0 0.6 Non-
agricultural raw 
materials 33 0.5 0.4 12 
Office/ 
telecom. Equipment 4 0.0 0.1 Office/ 
telecom. Equipment 124 0.5 1.6 120 
Power/non-
electrical 
mach. 219 0.3 6.0 Power/non-
electrical 
mach. 979 0.5 12.5 760 
Transport 
equipment 117 0.1 3.2 Transport 
equipment 943 0.6 12.0 826 
Chemicals 347 0.3 9.4 Chemicals 1,157 0,6 14,7 810 
Textiles and 
clothing 189 0,2 5,1 Textiles and 
clothing 341 1,0 4,3 152 
Iron and steel 635 1,6 17,3 Iron and 
steel 278 0,8 3,5 -358 
 World excluding Intra-EU trade and European Union: 27 members.  
Source : Eurostat (Comext), FMI. 
 
 Population in Mio  8 
Area in 1000skm (2007) 102 
Gross Domestic Product in BN € 26.2 
GDP Per Capita in euro 3,495 WT/L/731/Rev.1 
Page 10  
 
  ANNEX 7: MONTENEGRO 
 
 
 
  
 
 
 
 
EU 27 TRADE WITH MONTENEGRO 
    IMPORTS 
Rank 2007: 107 EXPORTS  
Rank 2007: 99 TRADE 
BALANCE 
Year Value 
(Mio €) Share of 
total  
EU imports 
(%) Value  
(Mio €) Share of total
EU exports  
(%) Value 
(Mio €) 
2005* 85 0,01 284 0,0 199 
2006 293 0,02 519 0,0 227 
2007 343 0,02 672 0,1 330 
2005* : June 2005-December 2005 
 
MAIN PRODUCTS 2007 
EU 27 Imports  EU 27 Exports  Balance 
SITC Rev.3  
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share 
of 
totals 
(%) SITC Rev.3 
Product 
Groups Value 
(Mio €) Share by 
products 
(%) Share of 
totals (%) Value 
(Mio €) 
TOTAL 343 0,0 100,0 TOTAL 672 0,1 100,0 330 
Agricultural products 7 0,0 2,0 Agricultural 
products 88 0,1 13,0 81 
Energy 0 0,0  0,0 Energy 56 0,1 8,4 56 
Non-
agricultural 
raw materials 0 0,0 0,1 Non-
agricultural 
raw materials 0 0,1 0,1 0 
Office/ 
telecom. 
Equipment 0 0,0 0,0 Office/ 
telecom. 
Equipment 7 0,0 1,0 7 
Power/non-
electrical 
mach. 6 0,0 1,7 Power/non-
electrical 
mach. 76 0,0 11,2 70 
Transport 
equipment 3 0,0 0,7 Transport 
equipment 93 0,1 13,9 91 
Chemicals 0 0,0 0,1 Chemicals 51 0,0 7,6 50 
Textiles and 
clothing 3 0,0 0,8 Textiles and 
clothing 24 0,1 3,6 22 
Iron and steel 19 0,0 5,5 Iron and steel 13 0,0 2,0 -6 
 
World excluding Intra-EU trade and European Union: 27 members. 
 
Source : Eurostat (Comext), FMI. 
 
__________ Population in Mio  0,7 
Area in 1000skm (2007) 25,3 
Gross Domestic Product in BN € 4,8 
GDP Per Capita in euro 7,098