Vrankovic was heading the Croatian delegation at the third round of talks on expanding and modernising CEFTA which opened on Wednesday.
Over the next three days representatives of Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Montenegro, Serbia, and the UN Mission in Kosovo will be discussing the text of an agreement that would replace the existing network of 31 bilateral free trade agreements between the countries.
As an illustration of why a multilateral agreement would be better than the existing network of bilateral agreements, Vrankovic cited the case of tobacco trade between Serbia and Croatia.
"Serbian representatives are complaining that their producers are not exporting to Croatia, while the Croatian Rovinj Tobacco Factory (TDR) is exporting its products to Serbia. The matter is simple - Serbian companies are not exporting because they have a monopoly in a market where they can sell their products and make profit, while TDR is operating in an open market and is interested in exporting even though it pays ten times more in local taxes than Serbian companies do," Vrankovic said.
"Our bilateral agreement clearly defines the rules of the game, but Serbia is not complying with them, so we reckon that a new CEFTA would assure greater responsibility on the part of countries signatories to comply with the commitments assumed," he added.
Over the next three days negotiators will decide whether the new CEFTA would have a head office and will address two proposals put forward by Serbia, concerning a transitional period for some industrial and agricultural products and government subsidies for a Serbian oil company.
As for the CEFTA head office, Croatia's view is that it is not necessary. "Based on our experience in CEFTA, we think it would be an unnecessary expense," Vrankovic said, explaining that up to now a joint committee representing all member states had been in charge of monitoring the implementation of the agreements.
The Southeast Europe Stability Pact has proposed establishing one permanent body, a secretariat, to provide technical support to the joint committee.
Vrankovic said that it should first be seen whether such a body was necessary at all, adding that the question of where CEFTA would have its headquarters was not the subject of these talks.
The idea of creating a single free trade zone in Southeast Europe is strongly supported by the European Union and the Stability Pact. At the proposal of Croatian Prime Minister Ivo Sanader, it has been accepted that this should be achieved through expanding CEFTA to include countries that have not been covered by that agreement.
A new, expanded CEFTA is supposed to include some new aspects such as trade in services, public procurement and intellectual property rights.
CEFTA currently consists of Bulgaria, Croatia, Macedonia and Romania. Bulgaria and Romania will leave the organisation when they join the EU on January 1, 2007 or 2008.
Albania, Bosnia-Herzegovina, Moldova, Montenegro, and Serbia are expected to join CEFTA by the end of the year.
CEFTA, established in 1992, had also included countries that joined the EU in 2004.