"We will sign the free trade agreement in Bucharest on December 19, after which we have to settle issues regarding requests from Serbia and Bosnia-Herzegovina," State Secretary Vlatko Sekulovic said. He added that the proposals sent to Croatia were related to the reduction of taxes on tobacco imports, but he did not state the percentage of reduction.
"If other partners in the region respond favourably to the proposal, that will be good, but if not, there are two possibilities - to establish uniform systems regulating excise taxes or allow each country to protect its own market, which means that we would stay on the same positions, until admission to the EU," Sekulovic said.
He recalled Croatia's explanation that provisions from bilateral free trade agreements and the agreement on CEFTA had to be observed, adding that Serbia considered the explanation not right. "If Serbia has discriminatory regulations, Croatia has discriminatory practice regarding tobacco imports," Sekulovic said.
The Serbian official believes that the agreement will be signed by all countries, including Bosnia-Herzegovina, "because they have time until May 2008", when the agreement is to be ratified by the parliaments of all signatory-countries.
Negotiations on CEFTA are being held by delegations from Serbia, Bosnia-Herzegovina, Macedonia, Croatia, Albania, Bulgaria, Romania and the UN Mission in Kosovo. The purpose of the agreement is to enable manufacturers in the region to find partners in the EU and market their products without taxes and restrictions in the EU market.
The agreement on the amendment and joining of CEFTA was initialled in Brussels on November 9 by eight of the ten countries which took part in the negotiations.
Bosnia-Herzegovina in November refused to initial the agreement requesting Croatia to allow the reintroduction of taxes on some agricultural products which it exports to Bosnia-Herzegovina.