TIRANA, May 22 – Albania and Kosovo finalized a trade facilitation meeting on Tuesday that was supposed to ease trade between the countries but which reportedly opened an even tougher trade war.
The superficial engagement of the Albanian government to facilitate trade has not worked as expected, resulting to Kosovo stating that if Albania does not remove hindering barriers for flour, beer and potatoes in the next two months, the Kosovo government will apply reciprocity in trade relations with Albania, announcing a 100 percent tax on Albanian products.
This was confirmed by Nikolin Jaka, Chairman of the Chamber of Commerce of Tirana.
Jaka said that the Kosovo government has undertaken efforts to remove all obstacles Albanian exports to Kosovo might face, but the Albanian government is failing to meet its commitments on some of the emergency requests considered by Kosovo’s businesses.
In a survey conducted with Kosovo businesses on the trade climate within the region, Albania is ranked second, right after Serbia, for the high trade barriers it applies to Kosovo products.
Even Kosovo authorities have stated that Albania is almost identical to Serbia concerning the trade barriers to goods from Kosovo.
Tired of empty promises made in summits between the governments of the two countries while in reality commercial barriers only increase, the Kosovo government has given Albania deadlines. If trade is not eased within two months and trade fees for beer, potato and flour from Kosovo will not be lifted, tariffs will be raised to 100 percent for all Albanian products.
Trade relations between Albania and Kosovo have slowly evolved, but the beneficiary has mainly been Albania.
Exports to Kosovo marked a strong growth in the first half of this year, especially in April, driven by two groups, that of minerals and fuels (mainly oil) and construction materials and metals, which together caught 74 percent of exports to this country for January-April 2019
According to INSTAT data, in the period January-April, goods were sold in the value of All 8.9 billion, with a growth of 52 percent over the same period last year. Kosovo is ranked as the second-largest export destination after Italy, with 9 percent of the total, down from 5.8 percent this year in the first quarter of last year.
The biggest increase was in April, when exports jumped by 70 percent.
The main effect of this growth was the group “Minerals, fuels and energy”, which quadrupled for the four months, reaching ALL 2.3 billion. This group has accounted for 26 percent of total exports. Its growth is related to the resumption of the ARMO refinery activity, which makes part of the processed oil to Kosovo. ARMO has boosted production in the country in the first months of this year as it received more crude oil from Bankers Petroleum and the latter has cut exports to other states.
The largest exporter group is “building materials and metals”, mainly metals. The biggest exporter is Kurum, which has Kosovo one of its main export destinations.
For the 4-month period, exports of construction materials and metals were ALL 4.1 billion, an increase of 18 percent on an annual basis. This group occupies the largest share, with 46 percent of total exports to Kosovo.
Albania did not seem to have benefited much from setting the 100 percent tax that Kosovo placed on Serbian goods, as the growth of these two groups was more affected by internal factors such as the resumption of ARMO’s work.
However, other products have increased, albeit from a small base. Exports of food and beverages, although increased by 38 percent, accounted for about 10 percent of the total. Chemical and plastic products grew by 60 percent over the four months, accounting for 6.2 percent of the total.
