CEFTA AGREEMENT BECOMES OPERATIVE IN BOSNIA ON NOVEMBER 22

SARAJEVO, Bosnia (November 21,2007) – The Central European Free Trade Agreement (CEFTA) will become operative in Bosnia on November 22. The new agreement creates the same trade conditions which are applied in the rest of the world.

”That concretely means that the Bosnian business community now has the conditions for long-term planning of the business activities and that the trade regiment will not vary from one country to another, like was the case with 32 bilateral agreements”, Sabrija Serifovic, Advisor to the Bosnian Minister of Foreign Trade said yesterday.

Connecting the countries of the region gives a chance to the region itself to consolidate from within. Bigger market is more attractive to investors, both domestic and foreign.

Apart from that, geographical position of Bosnia is very specific. Staying apart from the free trade zone would mean bringing Bosnia into a very difficult position.

Advantages of economic cooperation with the CEFTA countries have been known from before; especially the so-called “diagonal communication”. Analysts, however, state that that possibility cannot be used by far prior to signing of the Stabilisation and Association Agreement (SAA) with the European Union.

”I can mostly agree with that opinion. Rules on the origin of goods and merchandise in CEFTA agreement foresee a concept of diagonal accumulation of the origin. Keeping in mind the fact that Bosnia does not have the degree of analysis needed; it is mostly difficult to determine the origin. In that way, it is impossible to use the zero VAT rate”, Serifovic commented.

From the Bosnian perspective, it is now possible to accumulate the goods thorough the use of materials from the countries signatories. Once Bosnia signs the SAA with the EU, materials from the EU will be used as well. Knowing the structure of the Bosnian economy, Serifovic said, it is a fact that the concept of diagonal communication is yet to gain the significance.