Officials from Kosovo and the European Union convened a meeting in Brussels on 9 June 2022 to discuss developments over the past year in the areas of Trade, Industry, Customs and Taxation. The discussion was held in the framework of the Stabilisation and Association Agreement (SAA), which entered into force in April 2016. During the meeting, officials exchanged views on various areas, including trade, industry and SME policy, customs, taxation and the free movement of goods. In all areas, the European Union and Kosovo agreed on the importance of implementing the relevant priorities of the Economic Reform Programme, European Reform Agenda and the recommendations from the Commission’s 2021 Kosovo Report. The European Union welcomed the progress in conducting reforms in some areas and it urged Kosovo to increase the pace of implementation in others, especially those related to ERA.
In the area of trade, the parties discussed the trade deficit and development of trade policy. Following the low point of 2020 in the middle of the pandemic, trade between Kosovo and the EU recovered well in 2021 and the EU remains Kosovo’s first trading partner. The Commission encouraged the continued implementation and strengthening of Central European Free Trade Agreement (CEFTA) and urged that the additional protocols on trade facilitation and trade in services be ratified swiftly. Regarding the investment climate, further alignment with EU regulations and best practices was encouraged. In this regard, progress on acquis alignment as regards vehicle homologation was also welcomed. The adopted of the law on external trade was welcomed and Kosovo was encouraged to develop a policy to address its trade deficit.
On customs and taxation, Kosovo has made progress on amending the Customs and Excise Code to align it with EU legislation. The European Commission also welcomed the opening of the first publicly owned inland customs terminal and encouraged Kosovo to continue the phase out of usage fees for customs facilities. In addition, the European Commission stressed the importance of further combating the informal economy and recommended taking steps to pave the way for a comprehensive and thorough reform of tax policy, including the continuation of a gradual full digitalisation of all tax services.
On industry and SME policy, the European Commission welcomed the establishment of the commercial court which has the potential to greatly improve the business environment in Kosovo. Kosovo committed to continue to improve the business environment including through increased digitalisation and simplification of licences and permits. The European Commission also recalled the need for the Kosovo Investment and Enterprise Support Agency (KIESA) to better support investments and the private sector.
On free movement of goods, discussion focused on increasing the capacity of institutions and further alignment of legislation with the EU acquis in order to improve the quality infrastructure in the areas of standardisation, accreditation, conformity assessment, metrology and market surveillance.
- The Stabilisation and Association Agreement (SAA) is the framework for the EU and the Kosovo administration to regularly discuss technical and policy issues in relation to the EU-related reforms. The SAA bodies include the Stabilisation and Association Council, assisted by the Stabilisation and Association Committee, as well as SAA Sub-Committees, which cover a wide range of the EU acquis. The meetings of the SAA bodies provide direct input into the European Commission’s annual reports.
- Each Sub-Committee meeting monitors and accompanies Kosovo’s delivery on reforms and identifies how the EU can assist in this process.
- There are seven areas covered through sectorial meetings of sub-committees, on Justice, Freedom and Security; Innovation, Information Society, Social Policy, Education and Culture; Trade, Industry, Customs and Taxation; Internal Market, Competition, Consumer and Health Protection; Agriculture, Fisheries, Forestry, Food Safety; Transport, Environment, Energy, Climate Change and Regional Development; Economic and Financial Issues, Statistics.
- Two other areas covered through the meetings of special groups are the reform of the public administration and normalisation.
- SA Committee and Sub-Committee meetings are co-chaired by the European Commission and Kosovo. Each meeting results in jointly agreed follow-up actions to be taken by the Kosovo authorities.
The time between the meetings allows for the implementation of the recommendations and agreed follow-up actions.