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Kosovo and Croatia sign Free Trade Agreement

Zagreb, Sept 30, 2006 - A Free Trade Agreement (FTA) between Croatia and UNMIK on behalf of Kosovo was signed on Thursday in Zagreb. This is the first bilateral agreement between Kosovo and Croatia.

“This Free Trade Agreement with Croatia was negotiated in a record time, demonstrating the firm commitment by all stakeholders to deepen economic cooperation between Kosovo and Croatia,” said Paul Acda, Head of EU Pillar.

“These were probably the fastest free trade negotiations ever held in the region under the auspices of the Stability Pact, and they show that UNMIK has been successful in the goal to integrate Kosovo in the regional institutions” he added highlighting the big success of the negotiations.

Kosovo Minister of Trade and Industry Bujar Dugolli said this agreement shows the will of two places for trade cooperation and overall integration. “Kosovo is becoming an attractive place for investments of the Croatian business. There are many Croatian companies operating in Kosovo. We encourage the businessmen to visit Kosovo after signing this agreement and look more closely at the progress Kosovo has made,” said Minister Dugolli.

Croatian Minister of Economy and Labour Branko Vukelic, who signed the FTA, said: “With this contract good preconditions are created, the main trade barriers are eliminated. In fact, the agreement is asymmetric, since for the goods from Kosovo there will be no customs duties, while for some agricultural and industrial goods from Croatia will be applied certain customs duties until the end of 2007.”

According to this agreement all Kosovo goods will enter Croatia without any customs duties, while the customs duties for around 40% of Croatian goods will be paid until 1 January 2008, when the trade will be fully liberalized.

According to a press release issued by UNMIK Pillar IV, under the Agreement, Croatia will fully open its market to imports from Kosovo. Exports from Croatia for the time being will not be completely liberalized. Customs duties on milk, meat and processed vegetable products imported to Kosovo will be maintained. Customs duties for imported oil products, detergents and refrigerators will be phased out until the beginning of 2008.

The trade exchange between Croatia and Kosovo in the first 2006 semester amounted to 55.4 million euros. The export operations from Croatia to Kosovo totaled 55.3 million euros, while Kosovo exported 107.000 euros worth of goods to Croatia.

This is the third FTA between Kosovo and the regional countries. Until now Kosovo has signed FTAs with Albania and Macedonia.

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