WORLD TRADE  
ORGANIZATION  WT/L/635 
29 November 2005 
 (05-5663) 
General Council 
1-2 December 2005 Original:   English 
 
 
  
EC – AUTONOMOUS PREFERENTIAL TREATMENT TO THE COUNTRIES 
OF THE WESTERN BALKANS 
 
Report of the European Community under the Decision of 8 December 2000
1 
 
 
 The following communication, dated 28 November 2005, 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. Under the terms of this waiver, the European Community is required to submit to the General 
Council an annual report on the implementation of th e autonomous preferential treatment with a view 
to facilitating the annual review pr ovided for in paragraph 4 of Artic le IX of the WTO Agreement.  
This report covers calendar year 2005. 
3. 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.  
4. 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 
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 2004. 
2. Autonomous trade preferences 
5. 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. 
                                                     
 
1 WT/L/380. WT/L/635 
Page 2  
 
6. 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  0.5 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. 
7. 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 
8. 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. 
9. 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. 
10. Two agreements of this kind ha ve been concluded so far.  One with the former Yugoslav 
Republic of Macedonia and one with Croatia.  The trade provisions of these 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 ag reements. Both agreements establish a free trade 
area with the concerned country in line with th e obligations foreseen in Article XXIV of the 
GATT 1994.  At the same time they allow the c ontinuation of the autonomous preferences where 
these provide more favourable conditions for the export  of the goods originating in Croatia and in the 
former Yugoslav Republic of Macedonia.  
11. 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. 
12. Negotiations on a Stabilisation and Association Agreement with Albania started on 
31 January 2003 and are ongoing.  
4. Trade with the countries of the Western Balkans 
13. In the year 2004 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 Western Balkans remained also low, at 1.3% of total EU 
trade with the rest of the world. The stabili zation 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. 
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 2004.  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.  WT/L/635 
 Page 3 
 
 
 
  
ANNEX 1 
 
WESTERN BALKANS 
 
 
Population:  2003 24.2  Mio 
Area: (1,000skm) 264  
 
Gross Domestic Prod. 2004 63 Bn euro 
GDP Per Capita  2003 2,255 Euro 
  
EU-25 TRADE WITH WESTERN BALKANS (MIO ECU/EURO) 
 
 
  2000 2002 2003 2004   2000 2002 2003 2004 
Imports 5,532 6,238 6,641 7,819 Exports 12,468 16,788 17,274 19,530
Share of EU total (%) 0.6 0.7 0.7 0.8  1.5 1.9 1.9 2.0
Trade balance 6,936 10,551 10,663 11,711        
 
 
MAIN PRODUCTS IN 2004 (MIO EURO AND %)  
 
 
EU Imports      EU Exports        
Products Value Western 
Balkans 
share by 
prod. Products Value Western 
Balkans 
share by 
prod. Balance  
Agricultural 
products 1,062 1.3 Agricultural 
products 2,094 3.6 1,031 
Energy 207 0.1 Energy 644 2.3 437 
Machinery 944 0.4 Machinery 4,703 1.7 3,759 
Transport. 
Material 659 0.7 Transport. 
Material 2,576 1.6 1,917 
Chemical 
products 524 0.6 Chemical 
products 2,488 1.6 1,964 
Textiles and 
clothing 1,220 1.7 Textiles and 
clothing 1,478 4.3 258 
 
World*:  Intra-EU excluded. 
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM). WT/L/635 
Page 4  
 
ANNEX 2 
 
ALBANIA 
 
 
Population:  2004 3.5 Mio 
Area: (1000skm) 2004 29  
 
Gross Domestic Product  2004 6Bn euro 
GDP Per Capita  2004 1,713 Euro 
 
 
EU-25 TRADE WITH ALBANIA (MIO ECU/EURO AND %) 
 
 
Rank  Imports 2000 2002 2003 2004 Rank Exports 2000 2002 2003 2004 
93 279 336 360 397 63 836 1,117 1,115 1,218 
Share of EU 
total 0.03 0.04 0.04 0.04   0.1 0.1 0.1 0.1 
Trade balance 557 781 755 821          
 
 
MAIN PRODUCTS IN 2004 (MIO EURO AND %)  
 
 
EU Imports      EU Exports        
Products Value Albania 
share by 
prod. 
Products Value Albania 
share by 
prod. Balance  
Agricultural 
products 31 0.0 Agricultural 
products 187 0.3 156 
Energy 12 0.0 Energy 47 0.2 35 
Machinery 19 0.0 Machinery 255 0.1 236 
Transport. 
Material 2 0.0 Transport. 
Material 74 0.0 72 
Chemical 
products 1 0.0 Chemical 
products 108 0.1 107 
Textiles and 
clothing 111 0.2 Textiles and 
clothing 157 0.5 46 
 
World*:  Intra-EU excluded 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).   WT/L/635 
 Page 5 
 
 
 
 PLACE OF ALBANIA IN EU TRADE (2004) 
 
 
EU Imports EU exports 
Products Rank € M Share by 
products Share of 
total Rank € M Share by 
products Share of 
total 
Total 93 397 0.04 100.0 63 1,218 0.13 100.0
Agricultural 
products 114 31 0.04 7.8 46 187 0.32 15.3
Energy 65 12 0.01 3.0 43 47 0.17 3.9
Non agr. 
Raw 
materials 68 0 0.01 0.0 66 4 0.15 0.4
Office 
machinery and telec 
equipment 56 4 0.00 1.1 75 55 0.07 4.5
Power 
generating 
machinery 63 8 0.01 2.0 75 123 0.08 10.1
Transport 
materials 104 2 0.00 0.5 90 74 0.05 6.1
Chemicals 98 1 0.00 0.3 69 108 0.07 8.9
Textiles 
and 
clothing 46 111 0.16 28.0 31 157 0.46 12.9
Iron and 
steel 89 0 0.00 0.0 66 18 0.11 1.5
 
Source:  EUROSTAT (COMEXT). 
 WT/L/635 
Page 6  
 
ANNEX 3 
 
BOSNIA HERZEGOVINA 
 
 
Population:  2004 3.9  Mio 
Area: (1,000skm) 51   
 
Gross Domestic Prod. 2004 7 Bn euro 
GDP Per Capita  2004 1,711 Euro 
 
 
EU-25 TRADE WITH BOSNIA HERZ EGOVINA (MIO ECU/EURO AND %) 
 
 
Rank  Imports 2000 2002 2003 2004 Rank Exports 2000 2002 2003 2004 
66 610 719 847 984 47 1,853 2,273 2,190 2,347
Share of EU 
total 0.06 0.08 0.09 0.1   0.22 0.25 0.25 0.2
Trade balance 1,243 1,554 1,343 1,363         
 
 
MAIN PRODUCTS IN 2004 (MIO EURO AND %) 
 
 
EU Imports      EU Exports        
Products Value Bosnia 
share by 
prod. 
Products Value Bosnia 
share by 
prod. Balance  
Agricultural 
products 147 0.2 Agricultural 
products 427 0.7 279 
Energy 7 0.00 Energy 89 0.3 83 
Machinery 50 0.02 Machinery 462 0.2 411 
Transport. 
Material 114 0.1 Transport. 
Material 314 0.2 200 
Chemical 
products 11 0.01 Chemical 
products 277 0.2 266 
Textiles and 
clothing 128 0.2 Textiles and 
clothing 170 0.5 43 
 
World*:  Intra-EU exclu. 
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM).   WT/L/635 
 Page 7 
 
 
 
 PLACE OF BOSNIA HERZEGOVINA IN EU TRADE (2004) 
 
 
EU Imports EU exports 
Products Rank € M Share by 
products Share of 
total Rank € M Share by 
products Share of 
total 
Total 66 1002 0.10 100.0 47 2,347 0.24 100.0
Agricultural 
products 72 147 0.19 14.7 29 427 0.73 18.2
Energy 69 7 0.00 0.7 30 89 0.32 3.8
Non agr. 
Raw 
materials 42 1 0.00 0.1 40 15 0.35 0.6
Office 
machinery and telec 
equipment 83 1 0.00 0.1 62 96 0.12 4.1
Power 
generating 
machinery 41 43 0.06 4.3 61 251 0.17 10.7
Transport 
materials 50 114 0.12 11.4 53 314 0.20 13.4
Chemicals 64 11 0.01 1.1 51 277 0.18 11.8
Textiles 
and 
clothing 43 128 0.18 12.7 29 170 0.50 7.2
Iron and 
steel 43 15 0.12 1.5 51 45 0.27 1.9
 
Source:  EUROSTAT (COMEXT). WT/L/635 
Page 8  
 
ANNEX 4 
 
CROATIA 
 
 
Population:  2004 4.5  Mio 
Area: (1,000skm) 57   
 
Gross Domestic Prod. 2004 27 Bn euro 
GDP Per Capita  2004 5,932 Euro 
 
 
EU-25 TRADE WITH CROATIA (MIO ECU/EURO AND %) 
 
 
Rank  Imports 2000 2002 2003 2004 Rank Exports 2000 2002 2003 2004 
41 2,860 3,078 3,301 3,928 25 5,893 8,261 8,889 9,785
Share of EU 
total 0.29 0.33 0.35 0.4   0.69 0.92 1.01 1.0
Trade balance 3,033 5,183 5,587 5,857         
 
 
MAIN PRODUCTS IN 2004 (MIO EURO AND %)  
 
 
EU Imports      EU Exports        
Products Value Croatia 
share by 
prod. 
Products Value Croatia 
share by 
prod. Balance  
Agricultural 
products 405 0.5 Agricultural 
products 908 1.5 502 
Energy 164 0.1 Energy 381 1.4 217 
Machinery 741 0.3 Machinery 2,309 0.8 1,567 
Transport. 
Material 488 0.5 Transport. 
Material 1,498 1.0 1,010 
Chemical 
products 381 0.4 Chemical 
products 1,225 0.8 844 
Textiles and 
clothing 537 0.8 Textiles and 
clothing 631 1.8 95 
 
World*:  Intra-EU exclu. Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).   WT/L/635 
 Page 9 
 
 
 
 PLACE OF CROATIA IN EU TRADE (2004) 
 
 
EU Imports EU exports 
Products Rank € M Share by 
products Share of 
total Rank € M Share by 
products Share of 
total 
Total 41 3942 0.38 100.0 25 9,786 1.01 100.0
Agricultural 
products 37 405 0.51 10.3 14 908 1.54 9.3
Energy 42 164 0.09 4.2 12 381 1.36 3.9
Non agr. 
Raw 
materials 23 17 0.07 0.4 34 22 0.88 0.2
Office 
machinery 
and telec 
equipment 30 79 0.05 2.0 31 517 0.63 5.3
Power 
generating 
machinery 26 235 0.36 6.0 28 1,135 0.76 11.6
Transport 
materials 22 488 0.50 12.4 21 1,498 0.95 15.3
Chemicals 22 381 0.44 9.7 25 1,225 0.81 12.5
Textiles 
and clothing 23 537 0.77 13.6 13 631 1.85 6.5
Iron and 
steel 35 34 0.26 0.9 20 230 1.39 2.3
 
Source:  EUROSTAT (COMEXT). 
 WT/L/635 
Page 10  
 
ANNEX 5 
 
FORMER YUGOSLAV REPUBLIC OF MACEDONIA (FYROM) 
 
 
Population:  2004 2.1  Mio 
Area: (1,000skm) 26   
 
Gross Domestic Prod. 2004 4 Bn euro 
GDP Per Capita  2004 1,845 Euro 
 
 
EU-25 TRADE WITH FYROM (MIO ECU/EURO AND %) 
 
 
Rank  Imports 2000 2002 2003 2004 Rank Exports 2000 2002 2003 2004 
73 813 593 674 777 60 1,584 1,264 1,152 1,253
Share of EU 
total 0.08 0.06 0.07 0.1   0.18 0.14 0.13 0.1
Trade balance 771 671 478 476         
 
 
MAIN PRODUCTS IN 2004 (MIO EURO AND %)  
 
 
EU Imports      EU Exports        
Products Value Macedonia 
share by 
prod. 
Products Value Macedonia 
share by 
prod. Balance  
Agricultural 
products 92 0.1 Agricultural 
products 177 0.3 85 
Energy 14 0.01 Energy 35 0.1 21 
Machinery 30 0.01 Machinery 207 0.1 178 
Transport. 
Material 5 0.01 Transport. 
Material 104 0.1 99 
Chemical 
products 5 0.01 Chemical 
products 159 0.1 154 
Textiles and 
clothing 283 0.4 Textiles and 
clothing 244 0.7 -38 
 
World*:  Intra-EU exclu. 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).  WT/L/635 
 Page 11 
 
 
 
  
PLACE OF FYROM IN EU TRADE – 2004 
 
 
EU Imports EU exports 
Products Rank € M Share by 
products Share of 
total Rank € M Share by 
products Share of 
total 
Total 73 777 0.08 100.0 60 1,255 0.13 100.0
Agricultural 
products 83 92 0.12 11.8 49 177 0.30 14.1
Energy 61 14 0.01 1.8 49 35 0.12 2.8
Non agr. 
Raw 
materials 65 0 0.00 0.0 91 1 0.09 0.1
Office 
machinery and telec 
equipment 73 2 0.00 0.3 70 65 0.08 5.2
Power 
generating 
machinery 65 6 0.01 0.8 82 99 0.07 7.9
Transport 
materials 94 5 0.01 0.6 81 104 0.07 8.3
Chemicals 71 5 0.01 0.7 60 159 0.11 12.7
Textiles 
and 
clothing 31 283 0.40 36.4 25 244 0.72 19.5
Iron and 
steel 22 106 0.83 13.7 43 71 0.43 5.7
 
Source: Eurostat (Comext).WT/L/635 
Page 12  
 
ANNEX 6 
 
SERBIA AND MONTENEGRO 
 
 
Population:  2004 8.3 Mio 
Area: (1,000skm) 102   
 
 
Gross Domestic Prod. 2004 19 Bn euro 
GDP Per Capita  2004 2,326 Euro 
 
 
EU-25 TRADE WITH SERBIA AND MON TENEGRO (MIO ECU/EURO AND %) 
 
 
Rank  Imports 2000 2002 2003 2004 Rank Exports 2000 2002 2003 2004 
56 970 1,511 1,459 1,732 34 2,302 3,873 3,929 4,927
Share of EU 
total 0.1 0.16 0.16 0.2   0.27 0.43 0.45 0.5
Trade balance 1,332 2,362 2,470 3,195         
 
 
MAIN PRODUCTS IN 2004 (MIO EURO AND %) 
 
 
EU Imports      EU Exports        
Products Value Serbia 
share by 
prod. 
Products Value Serbia 
share by 
prod. Balance  
Agricultural 
products 387 0.5 Agricultural 
products 395 0.7 9 
Energy 10 0.01 Energy 92 0.3 82 
Machinery 103 0.04 Machinery 1,470 0.5 1,367 
Transport. 
Material 50 0.1 Transport. 
Material 587 0.4 536 
Chemical 
products 126 0.1 Chemical 
products 719 0.5 593 
Textiles and 
clothing 162 0.2 Textiles and 
clothing 275 0.8 113 
 
World*:  Intra-EU exclu. 
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM). WT/L/635 
Page 13 
 
 PLACE OF SERBIA-MONTENEGRO IN EU TRADE (2004) 
 
 
EU Imports EU exports 
Products Rank € M Share by 
products Share of 
total Rank € M Share by 
products Share of 
total 
Total 56 1734 0.17 100.0 34 4,934 0.51 100.0
Agricultural products 43 387 0.49 22.3 34 395 0.67 8.0
Energy 66 10 0.01 0.6 29 92 0.33 1.9
Non agr. 
Raw materials 16 31 0.01 1.8 37 16 0.29 0.3
Office 
machinery 
and telec 
equipment 41 14 0.01 0.8 32 466 0.57 9.4
Power 
generating 
machinery 37 64 0.10 3.7 37 754 0.50 15.3
Transport 
materials 62 50 0.05 2.9 42 587 0.37 11.9
Chemicals 37 126 0.15 7.3 35 719 0.48 14.6
Textiles 
and 
clothing 39 162 0.23 9.4 22 275 0.81 5.6
Iron and 
steel 34 34 0.27 2.0 41 79 0.48 1.6
 
Source:  EUROSTAT (COMEXT). 
 
 
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