Serbia lost 298mn euros from Kosovo tariffs, minister says

BELGRADE: Serbia has suffered damages amounting to around 0.7 percent of its gross domestic product since Kosovo, its former southern province, introduced 100% import tariffs last November, the country's trade minister said on Thursday.

Majority-Albanian Kosovo, whose independence Belgrade refuses to recognise, imposed the tax to retaliate after Serbia blocked it from joining the international police agency Interpol as a separate nation

Since last November, Serbia has lost 298 million euros ($329.89 million) as its exports to Kosovo fell sharply, the Tanjug news agency reported, quoting Rasim Ljajic, Serbia's trade Minister.

"That is the direct damage, while the indirect damage will be bigger and it will stem from by the loss of that market for our entrepreneurs," the state-run Tanjug news agency quoted Ljajic as saying.

In 2018, total exports from Serbia to Kosovo amounted to around 500 million euros. The International Monetary Fund and Serbia's central bank expect Serbia's economy will grow 3.5% this year and 4% in 2020.

The introduction of the tax led to an impasse in talks brokered by the European Union in normalising mutual ties -- a crucial condition for both countries to ultimately join the EU.

It has also caused hardship for the four ethnic Serb municipalities in northern Kosovo who pledge allegiance to Serbia and openly defy the Pristina authorities.

Last month, Serbian President Aleksandar Vucic said Belgrade would send supplies to Serb municipalities in Kosovo via "alternative" mountain roads, often used by smugglers, until the tax was scrapped.

Ljajic was also quoted as saying he expects the tax would be abolished after snap elections in Kosovo.

The EU and the United States have both urged Pristina to reverse the taxes and Belgrade to stop blocking Kosovo's bid to join international organisations.

Kosovo declared independence from Serbia in 2008, almost a decade after a NATO bombing campaign ended a crackdown by the Serb security forces against ethnic Albanians.

Kosovo is now recognised by over 110 nations, but not by others, including Serbia, Russia, China and five EU states. Belgrade and Moscow have blocked Kosovo from joining the United Nations.