When it comes to the trade between Serbia and the United States, despite the significant growth in the past two years, the achieved trading answers are far underneath the real possibilities. The potential for trade growth and greater utilisation of the benefits of the Generalized System of Preferences (GSP) is indeed great.
In yesteryear period, the economic cooperation forwards and backwards countries was primarily centered on American investments in Serbia. Progressively more American investors in Serbia each year, and their contribution through production, exports and employment is increasing. According to American sources, the entire investments of the US companies in Serbia, including investments using their European branches and thru global acquisitions, have amounted close to 4 billion dollars, says Marko Cadez in an interview for IN Focus America.
What is the impact of development aid on strengthening the economic sector, especially SMEs?
According to the statements from American officials in Belgrade, america, among the largest bilateral donors, has invested greater than a billion dollars of development aid in Serbia previously two decades, which is extremely important for the economy not only due to the amount of funds but additionally because that money was invested in programs that Serbia needs and which serve the overall economic and social development.
The Chamber of Commerce and Industry of Serbia is actively associated with the current USAID projects – the Cooperation for Growth project and also the Competitive Economy project, but additionally with previously completed programs such as the Business Enabling Project (BEP). Along with USAID, the Chamber has implemented several activities with active participation from business owners who were project beneficiaries. In addition to being the host of the official presentation from the 1,000 Companies Survey, which, this year, is being conducted for that ninth consecutive time, we've also worked together on creating and proposing a regulatory framework to have an improved business environment, expediting economic growth and job creation, inspection reform, enhancing the diversity and accessibility to financing sources financing for that private sector, primarily MSMEs, boosting e-commerce, increasing the capacity of small , medium-sized enterprises within the food industry and their value chains, improving competitiveness, innovation and the ability of Serbian companies to better position themselves in regional and international markets, etc.
We are also cooperating in recent months, throughout the pandemic. We conducted market research in the industry sector called “Together Through Crisis“ which helped us to better understand the situation in the economy, detect the issues faced by companies as well as their expectations and also to formulate the perfect proposal of activities and measures to get rid of the consequences of the health crisis.
How much have different support programs led to improving the trade between our two countries?
In relation to Serbia-the US trade, and despite the significant development in the past 2 yrs, the value from the external trade forwards and backwards countries, which stands at 854.4 million dollars, which Serbian exports amounted to 303 million dollars, is far underneath the real possibilities. The potential for trade growth and better utilization of the Generalized System of Preferences (GSP) is excellent. The agricultural and food sector, metal processing (car parts and metal processing), textile and furniture industry and energy (wind and solar farms) can increase exports to the US and raise the cooperation (between the two countries). I ought to also mention the armament industry, which recorded a substantial export of ammunition for hunting and sports in the previous period.
The Chamber of Commerce and Industry of Serbia is extremely committed to promoting Serbia as a destination for American investments, especially export-oriented ones, in addition to promoting the potential of Serbian companies to improve exports towards the US and connect with US companies. As well as the activities of USAID projects that have been contributing to the advance of the economic environment in Serbia and building the capacity and competitiveness of the economy and firms individually like a prerequisite for trading in a more successful market, such as the US, thanks to USAID’s technical and financial support, our top food producers took part in the flamboyant Food Show in New York City this past year. We received significant financial support from USAID for our companies presenting themselves in the national pavilions at fairs for example PLMA in Amsterdam and Fruit Logistica in Berlin.
If it weren’t for the current health crisis, business delegations would have already travelled to the US this spring, that was agreed with the U.S. Chamber of Commerce in January. Based on that agreement, the Chamber of Commerce and Industry of Serbia and also the U.S. Chamber of Commerce would organize an American business delegation’s trip to Serbia and vice versa, where businesses from Serbia and also the region would present in america their potentials and new opportunities that are opening to potential investors with a formation from the common Western Balkan market. These talks are a great basis for the realization in our activities once the pandemic subsides, i.e as soon as conditions permit because they are mutually beneficial.
The Generalized System of Preferences applies for Serbia until the end of 2020. Do you expect so that it is renewed in 2021 and just how important will it be for boosting external trade (between the two countries)?
We believe that, regardless of the current problems and also the effort on eliminating the effects from the COVID-19 pandemic, the Congress and also the President of the United States will make a new decision on extending Serbia’s preferential trade status early the coming year, following the current one expires. All the more so because the GSP program is mutually beneficial for the economies of these two countries and may significantly modify the better utilization of potential and the improvement of trade between Serbia and also the Usa.
The proven fact that Serbian businesses can export over 3,500 mostly industrial and agricultural products duty-free or at minimal export duties to a market as big as the American is essential for them. Because of constantly providing information to our members, their participation in conferences and workout sessions organized by our Chamber previously period, numerous companies are now acquainted with the GSP system and have been increasingly using its benefits.
This is validated through the data on the increasing use of preferences, which only this past year increased by 20 percent compared to the previous year. Last year, we had the pleasure of hosting representatives of the USTR office responsible for the expansion and coordination of yankee international trade policy and allowed our world of business to learn first-hand concerning the benefits of this technique.
The Chamber of Commerce and Industry of Serbia provides the first Serbian IT business accelerator in the US, and you've got also announced the outlet of the Serbian House in Silicon Valley. IT cooperation seemed to be among the topics you discussed in the meeting you'd in Washington, D.C. in January this season.
Trading in services is gaining on importance within the external trade forwards and backwards countries, with both export and import of services growing by a third this past year (to amount to 800 million dollars). Unlike exchanging goods, by which Serbia has been recording a deficit with regards to trading in services, Serbia’s export to America was worth 596 million dollars and it has the surplus that exceeds the value of exported goods to America. The fast-growing Serbian ITC sector, which the world and American media call the Western Balkan Silicon Valley and whose innovative products are already utilized by American companies and institutions, has special potential for further boosting the trading in services. For all of us, this is especially important whenever we realize that America holds a third of the global IT services market, is considered the most innovative countries on the planet and also the seat of the largest multinational technology companies.
During my remain in America, I also talked about this with the leading people of the It Industry Council (ITI). The COVID-19 pandemic has only temporarily postponed the implementation of important agreements we concluded with our American partners and also the announced visit to Serbia from the representatives from the ITI. We received a lot of praise and good evaluation from your American interlocutors regarding our activities on the digitization from the economy, enhancing the export from it services and developing educational programs for this professionals. We also received support for our Chamber’s and also the members’ initiative open the Serbian House in Silicon Valley, which may host entrepreneurs and technology experts from Serbia and the Western Balkans and enhance the ties with this particular global technology hub.
The US will also support the development of the so-called Mini Schengen Area in the Western Balkans. Why is this so important?
Strengthening regional integration, faster European integration of the Western Balkan countries and formation of the Mini Schengen Area were the focus of all the meetings I'd with influential representatives of yankee institutions and organizations (congressmen, senators, their state Department, the Atlantic Council experts, and the representatives of the business sector and associations) during my remain in Washington. Efforts to build a common regional economic space in the Western Balkans, the development from the Mini Schengen Area and the activities of the Chamber’s ZB6 Investment Forum received, without exception, the unequivocal support of the American interlocutors.
The Usa has recognized the chance to have a constructive role within the Western Balkans, providing a brand new economic approach to resolving challenges within the Western Balkans, like the Kosovo problem, contributing to stability in the area and supporting the Mini Schengen project as a new agenda for growth and economic strength and expediting reforms to make the Western Balkan economies more prepared to join the European Union as soon as possible. We agreed that it's extremely important that, with the implementation of previous agreements, the location feels the very first effects as soon as possible, so the economy starts to enjoy concrete benefits.
The common position in all the talks I'd at that time, but additionally in the previous and subsequent communication using the American interlocutors, might be summarized in the following words – the Mini Schengen initiative originated from the region and the countries that initiated it should still purchased it and lead it, however the US and EU’s support for that “new regional agreement“ is particularly important. This is in the best interest from the region, but also of the Eu and also the United States.
With the outbreak from the COVID-19 pandemic, regional economic connections and cooperation, the faster formation from the common Western Balkan market along with a deeper involvement of the region within the single legal and economic system of the Eu have become even more important. The new circumstances have further raised the notice of the need for stronger regional connections within the coming period, but additionally confirmed the readiness of Western Balkan economies to cooperate more closely, as evidenced, for instance, in the establishment of green corridors for much easier transport of goods in the region. I also discussed this within my recent telephone conversation with Matthew Palmer, US Deputy Assistant Secretary of State and US Special Representative for the Western Balkans.
The news that Serbian and Kosovar businesspeople renewed their business relations which trade was running smoothly went relatively unnoticed in media. How important was the influence of American diplomacy in this progress?
Serbian and Kosovar world of business, along with the business community from the entire region, which assembles the chambers of commerce that are people in the Chamber Investment Forum, are grateful to American diplomacy for that new economic approach to solving Balkan challenges, primarily the Kosovo issue. We're especially grateful to Mr Grenel for his contribution, energy and enthusiasm worth all respect. This new approach first resulted in an agreement on the resumption of direct flights between Belgrade and Pristina and then led to the abolition of the fee created by the state Pristina, which for almost annually . 5 caused great damage not only to our economies but also to international companies operating here and were the biggest obstacle to further normalization of relations between Belgrade and Pristina, otherwise crucial for the stability and additional progress from the region.
The speed at which the company communities renewed their business relations, following the abolition from the fee, speaks volumes about the importance that mutual communication, making business deals, buying goods from each other and free movement of people, goods and capital has for the companies from both sides from the administrative border.
Although the conditions are incomparable, even though the fee was abolished amid the coronavirus epidemic when transport was difficult everywhere, and although businesses from Kosovo had contracts with suppliers using their company markets, that they concluded as the fee was still in position, the mutual trade returned to some half of the one we'd in regular circumstances, without the fee, in the same period in 2018. I believe that, with the normalization from the health situation, we'll very soon return to the old level and further increase mutual trade. I also believe that we'll have the opportunity to determine the first investments, joint ventures and joint appearances of Kosovar and Serbian businesses in the area and the world, including the agreed joint presentation of IT companies in the usa. Of course, our business people will get the utmost support in the chambers of commerce of Serbia and Kosovo as their business associations.
