General overview

Multi-annual Action Plan for Regional Economic Area (REA) and succeeding Common Regional Market Action Plan 2021-2024 (CRM) remains the key instrument for promoting economic cooperation and European integration in the Western Balkans. CRM with Regional Trade Area based on the four freedoms builds on the CEFTA  legal framework and relevant Stabilisation and Association Agreements (SAAs) seeking to enable free movement of goods, services, capital and people throughout the region. CEFTA has an active role in implementation of the key activities from the Action Plan.

The Action Grant contributes to enhancing competitiveness of the CEFTA Parties by supporting economic integration as envisaged in the CRM and CEFTA Agreement. The positive correlation between the regional integration and more competitiveness is based on the following assumption: by removing and reducing barriers to trade and investment, the CEFTA Parties will increase potential for export and put higher pressure to local economy through more competition, resulting in more dynamic and productive businesses. More competitive local markets produce more competitive companies not only in regional, but also European and global context. As it moves to more integrated  market, the CEFTA Parties become more attractive to foreign investors given its size and more efficient and EU compliant business environment. Altogether, more export opportunities, more effective competition and more foreign investors, as a driver of higher productivity, will result in significant improvement of competitiveness.

CEFTA Priorities

In the area of cross-cutting trade measures in the CRM, CEFTA Parties are to adopt a framework agreement on dispute settlement. New mechanism should be more effective and streamlined, specifically from the point of view of efficient implementation of undertaken commitments.

The Parties are to continue with the activities towards full implementation of the Additional Protocol 5. This, particularly, refers to extension of the scope of the current Proposal on facilitating trade in fruit and vegetables to all agricultural products eventually. The similar activities are to be conducted for non-agricultural products as well.

As for the facilitating trade in fruit and vegetables the Parties are continuing activities regarding implementation of the respective Decision. The focus will be on identifying the most adequate risk-based approach for the regulation of trade in fruit and vegetables among the CEFTA Parties and for the clarifying the possibilities for the re-export procedures. Additionally, the Parties will focus on surveys on priority pests for Fruits and vegetables and contingency plans. Additional recognition programmes should be developed.

The Parties will continue with the implementation of the Decision on Establishing Procedures for Mutual recognition of Authorized Economic Operators. Validation missions for North Macedonia, Serbia and Moldova are finalized and the other Parties are expected to submit application for starting the validation procedure as well.

When it comes to IT interconnections for data exchange between agencies the Parties have developed the feasibility plans for investment and have secured the funding for the internal level connections for the implementation of SEED+.

As for Risk Management (the Parties are continuing to implement 3 piloted common joint risk profiles – illegal trade of tobacco; empty trucks-movement, identification and routing and IPR trademark with some „new“ (but already validated CRPs) and to include other agencies involved in the clearance of goods (e.g. Phytosanitary/Veterinary inspections). The ultimate goal is to improve information sharing between the CEFTA customs authorities and to remove redundant procedures and overlapping checks at the BCPs/CCPs.

Implementation of Green Lanes to all BCPs/CCPs in CEFTA and with the EU MS remain a priority.  Pilot crossings have been selected, the methodology has been agreed, and the framework for data exchange with the EU MS needs to be fine-tuned and agreed prior the implementation starts. Therefore, the whole process from the EU side is supported and coordinated by the DG TAXUD, while the EU MS have to examine and prove the necessity of data exchange with CEFTA. The other EU MS are expected to join the intuitive as well. Considering that the expansion of the Green Lanes with EU MS is one of the utmost priorities for all CEFTA Parties, confirmed by CRM, extension envisages the funding for the extension of the Green Lanes with the EU.

When it comes to the Competition and State Aid, the Parties are to develop instruments for information exchange between the respective authorities, to enhance their cooperation, and to ensure full and sustainable reporting of state aid including state aid schemes and measures. Two exploratory meetings have been held and it is expected that further consultations will be needed in order to adopt the future structure for the exchange of information. The Parties are still to explore instruments and mechanisms towards creating an area without NTMS.

Parties will continue setting-up the regional framework developing a regional framework on trade related aspects of intellectual property and related EU acquis and best European practices and standards, including format of cooperation among IPR authorities, within CEFTA in line with the CRM’s cross-cutting trade measures that will contribute to enhancing the competitiveness of CEFTA Parties.

Statistics continues to be one of the priorities in terms of improving the quality and uniformity of trade in goods and trade in services statistics. enhancing cooperation on trade-related statistics. In this respect the Parties will be working towards a comprehensive legal framework that will establish the basis for an enhanced cooperation in statistics among statistical offices and central banks.

Trade in services (CRM, Regional trade area, priority area 3) is to contribute to the further inclusion of the Parties in the global value chains. The Parties will work on identifying regulatory barriers to trade in services and setting up transparency instruments (such as databases) to aid regional businesses in overcoming these barriers. Furthermore, they will kick off interregional regulatory dialogue with a view of removing or reducing impact of the regulatory barriers through application of soft law, international or EU standards, MRAs or development of disciplines on domestic regulation.

CEFTA will continue working on ensuring full compliance with the Additional Protocol 6 by endorsing recommendations for improvement of regulatory frameworks in the Parties and launch discussions on regulatory means and methods for their implementation. Activities related to financial services will depend on the agreement on activities, including the role of CEFTA, made upon the feasibility assessment conducted by the World Bank. The exception is the insurance, where CEFTA will facilitate discussions on how to improve cooperation in relation to the third-party liability insurance. On postal services, upon the agreement on the recommendations for advancing cooperation, CEFTA will launch discussions on joint procedures for tariff monitoring and other (selected) measures for facilitation of parcel delivery in the region. On professional qualifications upon the agreement on the JC Decision, CEFTA will focus on discussion on Terms of Reference of the Joint Working Group and increasing capacities of the Parties for implementation of the Decision in the selected sector. In cooperation with RCC, CEFTA will continue to support the implementation of the Roadmap for recognition of electronic signatures as well as other forms of eIDs and trust services based on the relevant EU acquis In the area of electronic commerce, CEFTA will support implementation of the agreed Decision on facilitation of electronic commerce and launch discussion on geo-blocking and customs facilitation of parcel delivery.

In relation to free movement of capital, CEFTA will continue to work with RCC and World Bank in delivering activities aimed at development of a modern payment system with increased interest in setting up framework for limiting intra-CEFTA payment cost and facilitation of supply payment service across markets.

Regarding free movement of service, CEFTA will support implementation of the Decision on removing work permits for service suppliers and intra-company transfers and will look into possibilities of deepening cooperation on social insurance, in cooperation with RCC.

Areas of the project

Economic integration will be improved by facilitating trade and investment flows in CEFTA by strengthening main existing trade rules underpinning liberalisation of trade in goods and expanding liberalisation to new areas as envisaged by trade component of the CRM. The key enabler of trade facilitation in the region lies with rules and institutions of CEFTA. The Action Grant provides support by means of three groups of activities bundled together in three areas.

Support to smooth functioning of the CEFTA bodies

Implementation of CRM and CEFTA 2006 relies on smooth functioning of the CEFTA institutional set-up. More concretely, this Action enables functioning of the official CEFTA bodies, support the coordination role of the CEFTA Secretariat and enable it to effectively engage in CRM coordination and other relevant processes coordinated by other international organisations. Moreover, the Action provides support to the chairs in implementing their chairmanship programmes and further link between the institutions and CEFTA Secretariat through secondment programme.

Enhancing statistics and visibility

The Action contributes to increased economic benefits and increased demand for regional economic integration, by making policy outputs more available to general and specific public, by means of more effective communication with key stakeholder groups and public at large. This is to be achieved by communication coordinated and streamlines in strategic way, by significantly improving web and statistical portal, communication with key stakeholder groups and stronger promotion. Also, the Action supports CEFTA Secretariat in managing publicly available statistical portal with data on trade in goods, services, foreign direct investments and foreign affiliates trade statistics.

Technical and legal expertise

Implementation of CEFTA 2006 and CRM requires specific technical expertise that cannot be found in the CEFTA bodies and CEFTA Secretariat. The Action provides the technical and legal  expertise to support existing or future processes. This support is instrumental to further foster economic integration, for example by providing policy options, in measuring or assessing implementation of existing provisions, providing recommendations for potential remedial actions in case of non-compliance exploring new areas and/or forms of cooperation under CEFTA framework, reform of the institutional framework in line with changing demands and best international practices, etc.