BREXIT affects Serbia’s agro trade

The United Kingdom left the EU on December 31^st 2020. Since that day, the bilateral agreement between the EU and Serbia no longer regulates the bilateral trade between the UK and Serbia. Since a new bilateral agreement has not been signed, as a consequence, tariffs of up to 20% have been reintroduced on Serbian products that are being exported to the British market.

In order for the products to be present on the shelves of the British supermarkets, the Serbian producers had to meet the high British retail standards. “The shifting of the tariff burden to the Serbian producers makes exports to Great Britain completely unprofitable. I think that it will cause exports of frozen fruit from Serbia to drop by at least 15-20% overall,” explained the Director of Sirogojno company, one of the biggest exporters of frozen berries to the British market.

However, the high tariffs do not only cause problems for Serbian exporters, the national broadcaster RTS points out. “The British customs officers’ confusion in terms of which tariffs to apply to Serbia has slowed down the movement of goods and even fully suspended it for three or four days”, said Mr Vesovic, the Strategic Analyses Director at the Serbian Chamber of Commerce.

The percentage of  agricultural and food processing products in Serbia’s overall trade with the United Kingdom amounts to 21.4%. The main export articles are frozen fruits (berry fruits; apricots; peaches); ice cream and fresh apples. Serbian producers exporting to the UK have introduced and produced food stuff according to the British Retail Consortium Global Standards. The main concern of Serbian producers is that their products cannot be competitive with 20% tariffs and that they will lose the British market to other European producers.

The daily newspaper Blic writes that after leaving the EU, the UK decided that all countries that want to sign a free trade agreement, and thus avoid customs duties on their products, should agree to several political principles as well. So far, only North Macedonia and Kosovo signed the agreement, while Serbia, Montenegro and Bosnia and Herzegovina have not signed one yet. The consequences of this is that the custom duties on Serbian products on the British market are 20% up and customs duties on imports from the UK on the Serbian market are 30% higher, freezing bilateral trade almost entirely.

The Serbian Ministry of Trade stated that based on talks so far, there are no indications that a new agreement would cause Serbian exporters to lose the benefits they enjoyed through the previous agreement and announced that everything should be sorted out in the next couple of months, which is when the new agreement is expected to be signed.