ECONOMY

Serbia plans extra import duty on sugar

BELGRADE (Reuters) – Serbia plans to impose an additional import duty to discourage the purchase of European sugar and help the European Union suppress fraud under a special trade concession scheme. Agriculture Minister Dragan Veselinov late on Tuesday praised the EU decision to scrap sugar export subsidies to the western Balkans, saying Serbia was ready to help the bloc root out alleged abuse of trade preferences. On March 8, the Commission lifted export refunds for EU sugar sold to Albania, Bosnia, Croatia, Serbia and Montenegro and the Former Yugoslav Republic of Macedonia to prevent fraud. The move aims to stop triangular trade whereby European sugar exported with subsidies was coming back from the Balkans into the market of the 15-member bloc. «We plan to raise the fixed duty on imports of both refined and raw sugar,» Veselinov told Reuters in an interview. «It will be a pure political measure to show our friends from the EU we are ready to restrain sugar imports to remove any suspicion on possible re-exports from here.» Veselinov gave no details but said the move would be introduced «very soon.» In 2001, the EU allowed the Balkan states to sell home-produced sugar to the EU free of duties and quotas, to help war-damaged industries recover. But suspicions grew that some Balkan dealers were selling sugar to the EU under the deal at around $600 per ton, by re-exporting material bought on world markets at around $200. Veselinov said the removal of EU export subsidies also limited expansion of European sugar producers in Serbia. «It will aid the stability of domestic sugar production and eliminate unfair competition at home.» Serbia has fully liberalized its sugar exports, while imports are subject to both a 30 percent customs duty and a fixed import duty of 8 dinars ($0.138) per kilo, the latter introduced in the 1970s to discourage imports. Veselinov said the government would try harder to improve customs and other services to allow tracking of origin as required by the EU. He said new measures were in sight to regulate the sugar sector, with around 100 active traders. The EU perks helped Serbia’s sugar and sugar products exports rise 133.4 percent in 2002 to $96.8 million. Sugar imports rose 12.6 percent to $48 million, according to official statistics. The minister said Serbia expected 2003 sugar output at some 420,000 tons, or 200,000 tons above its needs.