Trade plays an important role in the EU’s efforts to promote peace, stability, freedom and economic prosperity in the Western Balkans.
The Western Balkans include Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo*.
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For all Western Balkan partners, the EU is the largest trading partner, accounting for two-thirds (65.8%) of the region’s total trade; while the region’s share of overall EU trade is only 1.4%.
Trade between the EU and the Western Balkans was hit by the Covid-19 pandemic in 2020, falling by 7.8% compared to 2019, in line with falling trade in other markets. However, 2021 and 2022 saw a substantial recovery, with trade increasing by 28.6% in 2021 and 30.3% in 2022, bringing total trade with the region to €85 billion: the highest never recorded. Overall, this trade expansion has benefited the EU’s Western Balkan partners; Over the past 10 years, the region has increased its exports to the EU by 217%, compared to an increase in EU exports to the region of 125%.
- In 2022, the main EU imports from the Western Balkans were mainly: household machinery and appliances (19.9%), mineral products (15.2%), base metals (13.8%) and chemicals (11.5%).
- EU exports to the Western Balkans were mainly: mineral products (19.8%), household machinery and appliances (18.2%), chemicals (9.6%) and base metals (9. 2%).
The EU and the Western Balkans
All Western Balkan countries have a perspective of European integration, which was first recognized at the Feira European Council in 2000. This was confirmed by the Thessaloniki European Council in 2003 and by the Sofia European Council in May 2018. This European perspective is integrated into the Stabilization and Association Process, which constitutes the EU policy towards the Western Balkan countries. As part of this process, all Western Balkan countries have a common future as EU member states.
Since the launch of the Stabilization and Association Process, the EU has gradually concluded bilateral “Stabilization and Association Agreements” with each of the Western Balkan partners: Albania (2009), North Macedonia (2004), Montenegro (2010), Serbia (2013), Bosnia Herzegovina (2015) and Kosovo* (2016).
AAS are tools that ensure economic development and political stabilization of countries in the region, as well as the creation of a close and long-term association between the EU and the Western Balkan countries. Indeed, the ASAs constitute the legal instrument for alignment with the EU. acquired and gradual integration into the EU market.
The SAA established a free trade area for a transition period, which has now ended for all except Kosovo* (2026). The agreements provide for the elimination of customs duties and non-tariff restrictions on bilateral trade and cover goods in all chapters of the Harmonized System. Only a few exceptions, concerning certain agricultural and fishing products, are not fully liberalized and are subject to reduced duties and/or preferential quantitative concessions.
In addition, the agreements include provisions regarding competition issues, a high level of protection of intellectual property rights and enhanced cooperation on customs matters. They also include additional disciplines concerning in particular public procurement, the approximation of laws in many areas, notably standardization, and provisions concerning services and establishment.
For more information, see also: Commission Communication on “Western Balkans: strengthening the European perspective‘, and the 2019 Communication on EU enlargement policy.
Pan-Euro-Mediterranean cumulation and the PEM Convention on rules of origin
The Pan-Euro-Mediterranean Cumulation of Origin System was established in 2005. It brings together the EU, Western Balkan countries and other partners from Europe and the Mediterranean to support regional integration by creating a common system rules of origin. Rules of origin are technical criteria that determine whether a specific product qualifies for duty-free or other preferential access under a given trade agreement.
Cumulation of origin means that a product originating from one partner country can be processed or added to a product from a second partner country while still being considered an “originating product” of that second partner country for the purposes of a special commercial agreement.
The pan-Euro-Mediterranean system allows diagonal cumulation (i.e. cumulation between two or more countries) between the EU, EFTA countries, Turkey, the Western Balkans, the Faroe Islands, Ukraine, Moldova, Georgia and any country signatory to the Barcelona Declaration. of 1995. The system was originally based on a network of free trade agreements with identical original protocols.
These individual original protocols were gradually replaced by a reference toRegional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (PEM Convention), which was created in 2011 to provide a more unified framework for the original protocols.
Transitional rules of origin applicable in the Pan-Euro-Mediterranean (PEM) area:
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The EU is currently amending 21 protocols of origin within the Pan-Euro-Mediterranean (PEM) area, implementing an alternative set of rules of origin applicable alongside the rules of the PEM Convention, on a bilateral, pending the adoption of the revised Convention. These new rules, which have been approved by a large majority of EMP contracting parties, including the Western Balkans, contain a significant number of improvements and simplifications compared to the current EMP convention.
More information on pan-Euro-Mediterranean cumulation and the PEM Convention
Access the EU market
Since 2000, the EU has granted autonomous trade preferences to all Western Balkan countries.
These preferences, which were renewed for five years at the end of 2020, allow almost all exports to enter the EU without customs duties or quantity limits.
Only sugar, wine, baby beef and certain fish products enter the EU under preferential tariff quotas.
Committees and dialogues
The EU and Western Balkan countries meet regularly to discuss issues and best practices and oversee the smooth functioning of the agreement.
Trading with the Western Balkans
- Import into the EU from the Western Balkans
- Export from EUto the Western Balkans
- Trade relations are part of the EU’s overall political and economic relations with Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo*.
- The EU strongly supports the accession of the Western Balkan states to the World Trade Organization (WTO): Albania (2000), North Macedonia (2003) and Montenegro (2011) are already members of the WTO. WTO accession negotiations with Serbia and Bosnia-Herzegovina are still ongoing.
- The Central European Free Trade Agreement (CEFTA) is a single free trade agreement (FTA) linking all the Western Balkans and Moldova.
* This designation is without prejudice to status positions and is consistent with United Nations Security Council Resolution 1244 and the ICJ Opinion on Kosovo’s Declaration of Independence..