The idea about establishing a single free trade agreement in the area is strongly supported by the European Union and the Stability Pact for Southeast Europe. In this context, Croatian Prime Minister Ivo Sanader's proposal to put the idea into practice through the enlargement of CEFTA was welcomed.
The current CEFTA members are Croatia, Bulgaria, Romania and Macedonia. With their entrance into the European Union either on 1 January 2007 or 2008, Bulgaria and Romania will leave CEFTA.
Candidates for CEFTA membership are Bosnia-Herzegovina, Serbia-Montenegro, Albania and Moldova, which are expected to join it until the end of this year.
CEFTA was established in 1992 and initially comprised central European countries: Poland, the Czech Republic, Slovakia, Hungary and later Slovenia, all of which entered the EU in 2004.
The European Commission has said that it supports efforts aimed at creating a common free trade area in southeastern Europe, but stressed that it will not be directly engaged in the negotiations on the matter.
We actively support the idea about establishing a single free trade zone, but this will not make any effect on our relations with western Balkan states, which remain to be bilateral and based on the grounds of headway which each of these countries is making, a source from the Commission said.
The purpose of the multilateral agreement, which is to be signed by the end of this year and enter into force next year, is to replace the existing 31 bilateral free trade agreements which the countries in question have signed.
The participants in the Bucharest meeting are expected to soften the membership criteria so that the CEFTA can accept new members.
For instance, it will be no longer required from the applicant country to be a member in the World Trade Organisation (WTO) or to have institutionalised relations with the EU.
A new CEFTA will regulate the regional trade in goods, services, intellectual rights protection, the market competition and public procurement. All of this is aimed at attracting more foreign investments in the region and at boosting trade between the countries in question.
According to figures released by the EC, the implementation of 31 bilateral free trade agreements singed since 2001 has led to a significant rise in the trade within the region. In the 2002-2004 period, the trade climbed by 33 percent from 2.6 billion to 3.5 billion euros.
In the said period, Croatia's export to those countries rose by 227 million euros (or by 27 percent) to 1.06 billion euros.
From 2001 to 2005, the trade between southeastern European countries and the EU increased by 53 percent from 52.09 billion to 79.77 billion euros. Croatia's trade with the EU saw an increase of 41 percent from 10.169 billion to 14.340 billion euros.