Serbia's minister for international economic relations, Milan Parivodic, said on Friday the government had adopted an action plan for the implementation of the Central European Free Trade Agreement's section on tobacco production and trade, which envisages equating excise taxes on domestic and foreign cigarettes as well as raising import tariffs as of 1 January 2008. The tobacco import tariff would rise from the current 15% to 57.6%.
The action plan the government prepared with tobacco manufacturers is a platform for talks with other CEFTA countries, with an aim to propose the unblocking of CEFTA negotiations, given that Croatia objected to Serbia's raising tariffs on import cigarettes after signing CEFTA.
Croatia asked that Serbia reduce excise taxes on import cigarettes and equate them with those on domestic ones, without increasing the import tariff.
Serbian Economy Minister told Radio B92 that negotiations with Croatia would certainly not be easy, but voiced hope that after the adoption of the action plan a solution and an agreement would also be found on tariffs.