ECONOMY

Brussels extends suspension of Serb sugar perks

BELGRADE (Reuters) – The European Commission said yesterday it had extended the suspension of special trade perks on sugar for Serbia and Montenegro for another six months, giving Belgrade time to prove upgraded customs rules were functioning. The EU in May put on ice for three months a sugar export scheme allowing the Balkan state to sell home-produced sugar free of duty to the bloc. It said an inadequate customs system prompted the move. The perks, launched in 2001, were also granted to Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia and Albania to help their post-conflict economies recover. Jan Willem Blankert, deputy head of the European Commission delegation in Belgrade, said Belgrade had done a lot to improve customs regulations and tighten control of the sugar trade but time was needed to prove the upgraded system was functioning in practice. «This decision is based on (the) technical situation. Customs is extremely badly organized. It is a legacy of the past and you can’t get everything right in just a couple of months,» he said. «Our experts want to see how all the taken measures are being implemented,» Blankert told Reuters. «The EU also wants to see the market of the union of Serbia and Montenegro functioning.» Serbia and Montengro, the only two Yugoslav republics left after the conflicts in the 1990s, forged under EU pressure a new reformed union in February which requires them to stay together for at least three years. The EU wants to see the two members harmonizing their trade regimes and economies, different in size and structure. Serbia and Montenegro have administrative borders and separate currencies. Serbian Minister for Foreign Economic Relations Goran Pitic said Serbia and Montenegro had failed to set up a single customs office, as the suspension relates to both republics. But he said it would be done in the autumn after the union’s Parliament approves an action plan aligning the two economies. «It will be in September and we will have time to prove until December that the union is functioning as a single market,» he told a news conference. Since the ban was launched, Serbia authorized sugar plants to be sole exporters and defined customs posts authorized to deal with sugar trade and border crossings for the shipments. It has adopted a new customs law, harmonized with the EU. Pitic said sugar was Serbia’s major export commodity. «We now face a sugar surplus of 100,000 tons for which we do not have a market.»