The Trade Impact of the Kosovo-EU Stabilization and Association Agreement: An assessment of outcomes and implications

January 21, 2014

Authors

Erëza Pula
economics, foreign direct investment, good governance

The European Union fashioned the Stabilization and Association Agreement (SAA) instrument exclusively for the Western Balkan countries in order to address their European perspective and potential. The process strongly ties the explicit offer of future membership with certain objectives and conditions that these countries have to reach. The agreement aims to anchor economic, political and administrative reforms in exchange for increased integration. More precisely, the agreement mainly seeks to boost economic cooperation by establishing a free trade zone as well as supporting the stabilization of the political, social and economic situations in the targeted country.Kosovo is one of the last Western Balkan countries not to sign an SAA agreement with the European Union. Until now, the EU has signed SAAs with Macedonia, Croatia, Albania, Montenegro, Serbia and Bosnia and Herzegovina. Each agreement identified common economic and political objectives, encouraged regional cooperation, and established a free trade area between EU and these countries to adapt to their specific situations. While the existing SAAs were tailored to individual countries, they, however, are very similar and share the same objectives. The SAA, which will cover several issues of mutual cooperation between Kosovo and EU, will benefit the former in many different aspects. It will be the first contractual agreement between EU and Kosovo; an agreement which requires commitment of both parties regarding the course of action detailed in the SAA. In addition, Kosovo will be able to liberalise trade with all EU member states, strengthen regional cooperation by aligning its political and economical preferences with other states, and implement its most suitable institutional framework to address the external competition. Finally, the agreement will open up new grant and funding opportunities for Kosovo.

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The Trade Impact of the Kosovo-EU Stabilization and Association Agreement: An assessment of outcomes and implications

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