WORLD TRADE
ORGANIZATIONWT/L/503
5 December 2002
(02-6718)
General Council
10-11 December 2002Original:  English
EC - AUTONOMOUS PREFERENTIAL TREATMENT TO THE COUNTRIES
OF THE WESTERN BALKANS
Report of the European Community under the Decision of 8 December 20001
The following communication, dated 3 December 2002, has been received from the
Permanent Delegation of the European Commission.
_______________
1. Introduction
1. On 8 December 2000, the EU was granted a waiver (WT/L/380) from its obligations under
paragraph 1 of Article I of the GATT 1994 to the extent necessary to permit the European Community
to afford duty-free or preferential treatment to eligible products originating in Albania, Bosnia-
Herzegovina, Croatia, the Federal Republic of Yugoslavia and the former Yugoslav Republic of
Macedonia, without being required to extend the same duty-free or preferential treatment to like
products of any other member.  This waiver will expire on 31 December 2006.
2. Under the terms of this waiver, the European Co mmunity is required to submit to the General
Council an annual report on the implementation of the autonomous preferential treatment with a view
to facilitating the annual review provided for in  paragraph 4 of Article IX of the WTO Agreement.
This report covers calendar year 2002.
3. The EU trade regime vis-à-vis  these countries is currently regulated by the granting of
autonomous trade preferences and by the conclusion of Stabilization and Association Agreements.  As
trade statistics for the current year are not yet available, those presented in the annex relate to the full
year 2001.
2. Autonomous trade preferences
4. Before 2000, the European Union already had a liberal trade regime towards the Western
Balkans, allowing more than 80 per cent of regional exports to enter the European Union duty-free.
On 1 December 2000 the EU Council of Ministers extended the duty-free access to the EU market for
products originating from this area even further.
5. The reason for such an extension was that the general level of imports from the Western
Balkans countries remained very low, being less than 0.5 per cent of all Community imports.  It was,
therefore, considered appropriate to further improve the Community's autonomous trade preferences
by removing all remaining tariff ceilings for industrial and agricultural products and by further
improving access to the Community market for agricultural and fishery products.
                                                     
1 Document WT/L/380 of 8 December 2000.WT/L/503
Page 2
6. Further market opening is expected to contribute to the process of political and economic
stabilisation in the region.  Fully liberalized access to the markets of the European Union is also
foreseen as part of the Stabilization and Association Agreements.
3. The Stabilization and Association Agreements
7. The Stabilization and Association Agreements, which the EU is progressively concluding
with the countries of the Western Balkans, are tools  which provide, much as the Europe Agreements
did for the candidate countries in Central Europe, for the economic development and political
stabilisation of the countries in the region, and to establish a close, long-term association between the
EU and the Western Balkans.
8. The Stabilization and Association Agreements aim at creating a free trade area for goods
among the parties over a transitional period in line with Article XXIV of the GATT 1994 and
envisages a progressive and reciprocal liberalisation of trade in services. Associated disciplines in
areas such as competition and state aid rules, intellectual property, public procurement, etc. are alsoenvisaged.
9. Two agreements of this kind have been concluded so far.  One with the former Yugoslav
Republic of Macedonia and one with Croatia.  The trade provisions of these two agreements entered
into force on, respectively, 1 June 2001 for the former Yugoslav Republic of Macedonia and
1 March 2002 for Croatia, by means of interim agreements. Both agreements establish a free tradearea with the concerned country in line with the obligations foreseen in Article XXIV of the
GATT 1994.  At the same time they allow the continuation of the autonomous preferences where
these provide more favourable conditions for the export of the goods originating in Croatia and in the
former Yugoslav Republic of Macedonia.
4. Trade with the countries of the Western Balkans
10. In the year 2001 EU imports from the Western Balkans concentrated primarily on agricultural
and textile products. With the exclusion of the latter, however, the trade balance for the countries of
the Western Balkans remained negative for all sectors.  The stabilization of the area and the new
export opportunities described in the precedent paragraphs should help the Western Balkans countries
to diversify their economies and to ameliorate such a trade balance.
11. Statistical annexes are provided to present a detailed description of the EU trade relations
with the countries of the Western Balkans for the year 2001.  The first annex describes the trade
relations with the countries of the Western Balkans as a whole, while the remaining annexes describe
in detail the trade relations with each country of the region.WT/L/503
Page 3
ANNEX 1
WESTERN BALKANS
Population: 2001 24.5  Mio
Area: (1,000skm) 264
Gross Domestic Prod. 2001 48 Bn euro
GDP Per Capita 2001 1,900 Euro
EU TRADE WITH WESTERN BALKANS (MIO ECU/EURO)
Rank 1993 1995 2001 Rank 1993 1995 2001
37 Imports 2,148 2,688 5,168 24 Exports 3,250 5,407 11,343
Share of EU total
(%)0.8 0.6 0.5 Share of EU total
(%)1.5 1.4 1.2
Trade balance 1,102 2,723 5,123
MAIN PRODUCTS IN 2001 (MIO EURO AND %)
EU Imports EU Exports
Products ValueWestern
Balkans
share by
prod.Products ValueWestern
Balkans
share by
prod.Balance
Agricultural products 662 0.8 Agricultural products 1,272 2.1 611
Energy 65 0.0 Energy 415 1.8 351
Machinery 483 0.18 Machinery 2,592 0.9 2,109
Transport. Material 164 0.15 Transport. Material 1,226 0.8 1,062
Chemical products 281 0.37 Chemical products 1,268 0.9 987
Textiles and clothings 1,286 1.8 Textiles and clothings 1,176 2.8 -110
World*:  Intra-EU excluded.
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM).WT/L/503
Page 4
ANNEX 2
FYROM
Population: 2001 2 Mio
Area:  (1000skm) 2001 26
Gross Domestic
Product2001 3.8 Bn euro
GDP Per Capita 2001 1.842,6 euro
EU TRADE WITH FYROM (MIO ECU/EURO)
Rank IMPORTS 1993 1995 2001 Rank EXPORTS 1993 1995 2001
78 535 664 640 66 675 880 1,159
Share of EU total 0.1 0.1 0.1 Share of EU total 0.1 0.2 0.1
Trade balance 140 216 520
MAIN PRODUCTS IN 2001 (MIO EURO AND %)
EU Imports EU Exports Balance
Products Value FYROM
Share of
EU total by
productsProducts Value FYROM
Share of EU
total by
products
Agriculturalproducts73 0.1 Agricultural
products144 0.2 71
Energy 0 0.02 Energy 204 0.9 204
Machinery 25 0.01 Machinery 190 0.1 165
Transport
material7 0.01 Transport
material108 0.1 101
Chemical
products4 0.01 Chemical
products81 0.1 77
Textiles and
clothing289 0.4 Textiles and
clothing209 0.5 -80
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).WT/L/503
Page 5PLACE OF FYROM IN EU TRADE - 2001
Rank Products Mio 
euroShare by 
productsShare 
of Total Rank Products Mio 
euroShare by 
productsShare 
of Total
84 Total 640 0,1 100,0 71 Total 1.159 0,1 100,0
96 Agricultural products 73 0,1 11,4 65 Agricultural products 144 0,2 12,4
89 Energy 0 0,0 0,0 16 Energy 204 0,9 17,6
68 Non agricul.raw material 0 0,0 0,0 102 Non agricul.raw material 1,3 0,0 0,1
79 Office machi. And telec.equipment 2 0,0 0,4 72 Office machi. And telec.equipment 70 0,1 6,1
88 Power generating machinery 4 0,0 0,6 90 Power generating machinery 97 0,1 8,4
94 Transport Material 7 0,0 1,1 90 Transport Material 108 0,1 9,3
86 Chemical product 4 0,0 0,7 84 Chemical product 81 0,1 7,0
38 Textiles and Clothing 289 0,4 45,2 33 Textiles and Clothing 209 0,5 18,0
26 Iron and steel 145 1,0 22,6 80 Iron and steel 16 0,1 1,4EU IMPORTS EU EXPORTSWT/L/503
Page 6
ANNEX 3
F.R. OF YUGOSLAVIA
Population: 2001 10.6 Mio
Area: (1000qkm) 102
EU TRADE WITH F.R. OF YUG. (SERBIA-MONTENEGRO) (MIO ECU/EURO AND %)
MAIN PRODUCTS IN 2001 (MIO EURO AND %)
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).EU ImportsSerb.Monten. 
share of EU ExportsSerb.Monten. 
share of Balance
Products ValueEU total by 
products Products ValueEU total by 
products
Agricultural products 223 0,3 Agricultural products 282 0,5 59
Energy 10 0,01 Energy 76 0,3 66
Machinery 57 0,02 Machinery 627 0,2 570
Transport. Material 83 0,1 Transport. Material 287 0,2 204
Chemical products 44 0,1 Chemical products 349 0,2 305
Textiles and clothings 163 0,2 Textiles and clothings 212 0,5 48Rank
IMPORTS1993 1995 2001 Rank
EXPORTS1993 1995 2001
69 3 32 1.097 49 83 190 2.521
Share of EU
Total (%)0,001 0,01 0,1 Share of EU Total
(%)0,02 0,03 0,3
Trade balance 80 159 1.424WT/L/503
Page 7PLACE OF F.R. OF YUGOSLAVIA (SERBIA-MONTENEGRO) IN EU TRADE (2001)
Source:  EUROSTAT (COMEXT).Rank Products Mio 
euroShare by 
productsShare of 
Total Rank Products Mio 
euroShare by 
productsShare of 
Total
69 Total 1.097 0,1 100,0 49 Total 2.521 0,3 100,0
63 Agricultural products 223 0,3 20,3 43 Agricultural products 282 0,5 11,2
70 Energy 10 0,0 0,9 32 Energy 76 0,3 3,0
26 Non agricul.raw material 16 0,2 1,5 49 Non agricul.raw material 12 0,4 0,5
66 Office machi. And telec.equipment 3 0,0 0,3 50 Office machi. And telec.equipment 169 0,2 6,7
43 Power generating machinery 42 0,1 3,8 54 Power generating machinery 366 0,2 14,5
63 Transport Material 83 0,1 7,6 61 Transport Material 287 0,2 11,4
53 Chemical product 44 0,1 4,0 48 Chemical product 349 0,2 13,8
46 Textiles and Clothing 163 0,2 14,9 33 Textiles and Clothing 212 0,5 8,4
32 Iron and steel 85 0,6 7,8 59 Iron and steel 39 0,2 1,5EU IMPORTS EU EXPORTSWT/L/503
Page 8
ANNEX 4
CROATIA
Population: 2001 4 Mio
Area: (1000qkm) 2001 57
Gross Domestic Product 2001 21Bn euro
GDP Per Capita 2001 4,704 Euro
EU TRADE WITH CROATIA (MIO ECU/EURO AND %)
MAIN PRODUCTS IN 2001 (MIO EURO AND %)
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).Rank       IMPORTS 1980 1990 2001** Rank        EXPORTS 1980 1990 2001**
52 203 427 2.470 34 122 179 5.415
Share of EU Total (% 0,1 0,1 0,2 Share of EU Total (%) 0,1 0,0 0,6
Trade balance -81 -248 2.945
EU Im ports  CROATIA share of EU Exports  CROATIA share of Balance
Products Value EU total by products Products Value EU total by products
Agricultural products 250 0,3 Agricultural products 475 0,8 224
Energy 39 0,0 Energy 94 0,4 56
Machinery 366 0,1 Machinery 1.225 0,4 858
Transport. M aterial 80 0,1 Transport. Material 704 0,4 624
Chemical products 22 2 0,3 Chemical products 670 0,5 448
Textiles and clothin gs 582 0,8 Textiles and clothings 532 1,3 -50WT/L/503
Page 9PLACE OF CROATIA IN EU TRADE (2001)
Source:  EUROSTAT (COMEST).Rank Products Mio 
euroShare by 
productsShare 
of Total Rank Products Mio 
euroShare by 
productsShare 
of Total
52 Total 2.470 0,2 100,0 34 Total 5.415 0,6 100,0
60 Agricultural products 250 0,3 10,1 29 Agricultural products 475 0,8 8,8
60 Energy 39 0,0 1,6 25 Energy 94 0,4 1,7
29 Non agricul.raw materi a 12 0,2 0,5 45 Non agricul.raw materi 13,5 0,4 0,2
38 Office machi. And telec 46 0,0 1,9 35 Office machi. And tele c 374 0,4 6,9
30 Power generating mac h 152 0,2 6,2 41 Power generating mac 604 0,4 11,2
55 Transport Material 80 0,1 3,2 35 Transport Material 704 0,4 13,0
31 Chemical product 222 0,3 9,0 34 Chemical product 670 0,5 12,4
29 Textiles and Clothing 582 0,8 23,6 20 Textiles and Clothing 532 1,3 9,8
48 Iron and steel 23 0,2 0,9 35 Iron and steel 140 0,7 2,6EU IMPORTS EU EXPORTSWT/L/503
Page 10
ANNEX 5
BOSNIA HERZEGOVINA
Population: 2001 4.1  Mio
Area: (1000skm) 2001 51
Gross Domestic Product 2001 4 Bn euro
GDP Per Capita 2001 1,103 euro
EU TRADE WITH BOSNIA HERZEGOVINA (MIO ECU/EURO)
MAIN PRODUCTS IN 2000 (MIO EURO AND %)
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) FMI (DOTS) WEFA (WMM).Rank       IMPORTS 1993 1995 2001 Rank        EXPORTS 1993 1995 2001
86 31 24 609 69 73 157 1.224
Share of EU Total (%) 0,01 0,004 0,1 Share of EU Total (%) 0,02 0,02 0,1
Trade balance -289 -687 615
EU ImportsBosnia and 
Herz. share of EU ExportsBosnia and 
Herz. share of Balance
Products ValueEU total by 
products Products ValueEU total by 
products
Agricultural products 88 0,1 Agricultural products 220 0,4 132
Energy 10 0,01 Energy 7 0,03 -3
Machinery 21 0,01 Machinery 252 0,1 231
Transport. Material 13 0,01 Transport. Material 150 0,1 137
Chemical products 8 0,01 Chemical products 109 0,1 101
Textiles and clothings 127 0,2 Textiles and clothings 118 0,3 -9WT/L/503
Page 11PLACE OF BOSNIA HERZEGOVINA IN EU TRADE (2001)
Source:  EUROSTAT (COMEXT).Rank Products  Mio euroShare by 
productsShare of 
Total Rank Products Mio 
euroShare by 
productsShare of 
Total
86 Total 609 0,1 100,0 69 Total 1.224 0,1 100,0
95 Agricultural products 88 0,1 14,4 54 Agricultural products 220 0,4 17,9
71 Energy 10 0,01 1,64 92 Energy 7 0,03 0,5
71 Non agricul.raw material 0,2 0,002 0,027 85 Non agricul.raw material 3 0,1 0,2
91 Office machi. And telec.equipment 2 0,001 0,256 73 Office machi. And telec.equipme 70 0,1 5,7
56 Power generating machinery 18 0,02 2,99 79 Power generating machinery 139 0,1 11,4
96 Transport Material 13 0,01 2,16 83 Transport Material 150 0,1 12,3
71 Chemical product 8 0,01 1,39 77 Chemical product 109 0,1 8,9
53 Textiles and Clothing 127 0,2 20,8 46 Textiles and Clothing 118 0,3 9,6
47 Iron and steel 24 0,2 3,9 76 Iron and steel 20 0,1 1,6EU IMPORTS EU EXPORTSWT/L/503
Page 12
ANNEX 6
ALBANIA
Population: 2001 3.4 Mio
Area: (1000qkm) 2001 28.7
Gross Domestic Product 2001 4Bn euro
GDP Per Capita 2001 1.294 euro
EU TRADE WITH ALBANIA (MIO ECU/EURO AND %)
MAIN PRODUCTS IN 2001 (MIO EURO AND %)
World*:  Intra-EU exclu.
Sources:  EUROSTAT (COMEXT, CRONOS) IMF (DOTS) WEFA (WMM).Rank       IMPORTS 1993 1995 2001 Rank        EXPORT S 1993 1995 2001
104 81 151 352 77 405 517 1.094
Share of EU Total (%) 0,02 0,03 0,03 Share of EU Total (%) 0,1 0,1 0,1
Trade balance 324 366 742
EU Imports Albania share of EU Exports Albania share of Balance
Products Value EU total by products Products Value EU total by products
Agricultural products 34 0,04 Agricultural products 183 0,3 149
Energy 4 0,003 Energy 65 0,3 61
Machinery 15 0,01 Machinery 259 0,1 244
Transport. Material 3 0,003 Transport. Material 70 0,04 67
Chemical products 3 0,003 Chemical products 68 0,05 65
Textiles and clothings 134 0,2 Textiles and clothings 126 0,3 -7WT/L/503
Page 13PLACE OF ALBANIA IN EU TRADE (2001)
Source:  EUROSTAT (COMEST).
__________Rank Products Mio 
euroShare by 
productsShare of 
Total Rank Products Mio 
euroShare by 
productsShare of 
Total
104 Total 352 0,03 100,0 77 Total 1.094 0,1 100,0
119 Agricultural products 34 0,04 9,6 58 Agricultural products 183 0,3 16,7
80 Energy 4 0,003 1,1 36 Energy 65 0,3 6,0
103 Non agricul.raw material 0,01 0,0001 0,0 81 Non agricul.raw material 3 0,1 0,3
75 Office machi. And telec.equipment 2 0,002 0,7 58 Office machi. And telec.equipment 126 0,1 11,5
69 Power generating machinery 9 0,01 2,6 93 Power generating machinery 75 0,05 6,9
122 Transport Material 3 0,003 0,8 107 Transport Material 70 0,04 6,4
98 Chemical product 3 0,003 0,8 90 Chemical product 68 0,05 6,2
51 Textiles and Clothing 134 0,2 37,9 43 Textiles and Clothing 126 0,3 11,6
54 Iron and steel 9 0,1 2,5 70 Iron and steel 27 0,1 2,5EU IMPORTS EU EXPORTS