General

On August 8, a free trade agreement between Serbia and China is expected to be signed by the end of this year, which will bring new business opportunities for Serbian agricultural and food producers, winemakers and grape growers, as well as the IT sector and the wood processing industry.

Serbian companies in the above fields will be able to sell their products and services on more favorable terms in the huge Chinese market with a population of more than 1.4 billion. On the other hand, the agreement will make Serbia one of the most attractive investment destinations in Europe. The signing of the FTA will allow most products to be imported and exported without duty or low tariffs, which will lead to an increase in trade volumes. China is Serbia's most important trading partner in Asia, and through this agreement, the strategic partnership between the two countries will be further strengthened. Experts point out that the document needs to be carefully defined to avoid potential risks that could accompany the opening of Serbia's small market to the world's No. 1 trading nation.

A month ago, the draft free trade agreement with China began to be prepared, and the Ministry of Finance of Serbia took the lead in the preparatory working group. Finance Minister Marley noted that over the past 10 years, from 2012 to 2021, Serbia's exports to China have increased by 152 times. The agreement will increase the competitiveness of the Serbian economy, boost exports and open doors for new investments from around the world.

Stanic, Assistant Director of the Strategic Analysis Department of the Serbian Chamber of Commerce and Industry, said that the Chamber of Commerce and Industry supports the Serbian government in promoting the Serbia-China Free Trade Agreement, but the negotiation process must be treated with caution. It is necessary to assemble a broad negotiating team to negotiate as well as possible, and the business must be consulted. Signing an FTA between two countries with disproportionate economic potential is a complicated affair, and Serbia has both advantages and risks. The definition of the agreement should be broader and should include investment activities in addition to trade. This means that the agreement should agree on the employment of Serbian workers by Chinese companies coming to Serbia and the inclusion of Serbian suppliers in the supply chains of Chinese companies. At present, Serbia mainly exports raw materials such as metal and wood to China. A way needs to be found to increase exports of stuffed meat and meat products, wine and other alcoholic beverages.

Economist Nikolic estimates that the free trade agreement with China will greatly stimulate companies, mainly foreign investors, that will invest in production in Serbia on a large scale.