Trade relations

Western Balkans

In 2000, the European Community granted exceptional unlimited duty-free access to the EU market for nearly all products originating in the countries of Western Balkans, without quantitative restrictions, thus granting unlimited duty-free accesses to the market of the enlarged Union (Council Regulation (EC) No. 1215/2009 -known as Autonomous Trade Measures - ATMs). These measures include almost all basic agricultural products with the exception of some fishery products, "baby beef", wine and sugar, for which duty-free or reduced duties within preferential quotas have been set.

Since then, these provisions were, by and large, translated into contractual agreement by signing of the respective countries' Stabilisation and Association Agreement (SAA). Pending the ratification of the SAAs, the Union’s trade relations with some countries are governed by Interim Agreements.

Trade measures of the SAA represent a uniform system of preferences for the countries of the region. They remain asymmetrical, i.e. offering immediately improved market access to nearly all products originating in the region. On the other hand Western Balkan countries agree under the contractual obligations of the SAA to dismantle gradually its tariffs to imports from the European Union in order to achieve a substantial liberalisation of trade within 5 – 10 years after the entry into force of the SAA.

The EU is by far the most important export market for the Western Balkan countries and the trade preferences have created an enabling environment for an increase of exports. Western Balkans' exports to EU of basic agricultural products continue an upward trend rising by over 20% between 2005 and 2009.

Until 2005, Croatia was the largest exporter in the region of basic agriculture products, providing the EU with nearly half of its imports from the Western Balkans. Since 2005, the imports from Serbia have been increasing substantially, representing at present (2009 data) 56% of total EU imports from the region. Together with Croatia, the imports from those two countries represent 79% of the total value. The export performances of these two countries are therefore an important determinant for the development of exports from the region as a whole.

Reciprocally, trade agreements allow for the gradual opening up of the markets of the Balkan region to EU products. Between 2005-2009, the EU export of basic agriculture products into the Western Balkans rose by almost 20% on average. Croatia remains the largest importer of EU basic agriculture products, accounting for 56% of all EU exports in the Balkan region (2009 data). Bosnia and Herzegovina and Serbia share second place importing around 15% respectively of total EU exports of basic agriculture products to the region.

Turkey

Trade relations with Turkey date back to 1963 with the signature of the Ankara Association Agreement between the EEC (European Economic Community) and Turkey. This Agreement envisaged the progressive establishment of a customs union which would bring the two sides closer together in economic and trade matters.

For this purpose, one of the institutions established was the Association Council, made up of representatives of the Turkish government, the European Council and the European Commission, responsible for shaping the Turkey-EU relations. Its aim is to implement the association agreement in political, economic and trade issues.

A customs union between Turkey and the EU was completed in 1995 (Decision No 1/95 of the EC-Turkey Association Council). Since then, Turkey's share in the EU's foreign trade has significantly increased, to the extent that in 2009 Turkey was the EU's 7th biggest trading partner. Although trade concessions were included in Decision No 1/95 for processed agricultural products, basic agricultural products were left out of the Customs Union in 1995.

The EC-Turkey bilateral trade agreement for agricultural products results from Decision No 1/98 of the EC-Turkey Association Council, and entered into force on 25.02.1998. This decision was amended by Decision No 2/06 of the EC-Turkey Association Council, in the follow-up of the accession of the 10 NMS to the EU in May 2004. These Decisions establish mutual trade concessions for agricultural products.

In the sequence of these agreements, imports of agricultural products from Turkey into EU-27 have increased progressively reaching a peak in 2007 (2 765 Mio Euros) and falling 10% between 2007 and 2009, while exports of EU-27 to Turkey have increased by 23% in the period 2005-2009. This shows progressive development of trade relations between both sides, although with a trade deficit of the EU (1 485 million euros in 2009).

Iceland

The European Economic Area (EEA) Agreement with EFTA States Iceland, Liechtenstein and Norway, in force since 1994, does not cover the acquis on agriculture and rural development except for compulsory marketing standards like organic farming, sheep carcass classification, and wines and spirits, and some other standards necessary for free circulation on the EU's internal market, in particular as regards veterinary and phytosanitary issues.

In 2007 the Icelandic market for agricultural products from EU was partially opened following negotiations conducted under Article 19 of the EEA. It resulted in bilateral trade preferences between the EU and Iceland, in the form of full tariff liberalisation for non sensitive products and some quotas and/or tariff reduction for sensitive products.

The EU is the main trading partner of Iceland, with regard to all commodities, as well as for agricultural products. As regards trade in agricultural products, the EU accounted for about 65 % of all Icelandic imports and about 47 % of all Icelandic agricultural exports in 2008. Icelandic tariff is generally low but Iceland protects its local agricultural production by some high import tariffs, especially as regards meat and dairy products.