Free Trade Agreement between Serbia and China
Newsletter 139
In light of current events and announcements of further developing of diplomatic relations between Serbia and the People’s Republic of China, we look back at the Free Trade Agreement (“FTA”) signed between the two countries on October 17, 2023. The FTA was signed during the Third Forum for International Cooperation « Belt and Road » and is a significant achievement in trade liberalization, as it represents the first agreement of this kind between China and a country in Central and Eastern Europe. China and Serbia have long-standing diplomatic relations, dating back to 1955.
In the period until the entry into force of the Agreement (expected in the first half of 2024), preferential customs rates for the import of goods originating from China will be shown in Serbia by the Regulation on Harmonization of the Customs Tariff Nomenclature for 2024.
A free trade agreement is an agreement between two or more countries concluded with the aim of reducing barriers to the import and export of goods and services between them. Under a free trade policy, goods and services can be bought and sold across international borders with lower or no government tariffs, customs or prohibitions that would prevent their exchange.
Besides the FTA with China, Serbia has a trade agreement with the EU, and thus enjoys preferential market access to two large markets, which are also Serbia’s largest trade partners. It is insufficiently known that Serbia is China’s main trade partner in Central and Eastern Europe, and that China occupies the position of Serbia’s key trade partner in Asia. With this, it is expected that the export of Serbian products to China will increase, but also that Serbian companies will be included in China’s global supply chains.
The signing of bilateral agreements generally has more impact on large and developed economies. However, in the long term, the Chinese market is opening up to Serbia. The effects of signing this agreement will be visible in the coming years. The agreement refers to almost 10.500 products from Serbia and almost 9.000 Chinese products and represents a great opportunity for Serbian exporters.
