Kosovo on the offensive: Trade reciprocity and rule of law

The recent tensions in northern Kosovo represent a window of opportunity for the government of Kosovo and the international community.

Photo: Associated Press

NEW YORK, August 2, 2011 – The attempt by the Government of Kosovo to retake control over its two northern border crossing points with Serbia incited strong reactions by the local Serb population in the northern part of Kosovo. Special units of the Kosovo police managed to deploy regular border police and customs officers in the border crossing of Bernjak but failed do to the same in Jarinje as local Serbs in Leposavic constructed a road block and protested against this measure. During their withdrawal from the border crossings, the special units were ambushed in the vicinity of the Bernjak, leaving one Kosovo police officer dead.

KFOR peacekeepers – a NATO-led force – deployed the Kosovo border police officers with helicopters to Jarinje, but the following day, an armed mob of about fifty Serb men set ablaze the border post. KFOR sent reinforcements to the two border crossings and warned that its soldiers are authorized to shoot at anyone threatening its troops.

By taking control over these border posts, the Government of Kosovo is now implementing its recent decision to apply the trade reciprocity principle with Serbia and extend rule of law to its Serb-dominated northern territory.

After Kosovo declared independence in February 2008, two neighboring countries, Serbia and Bosnia and Herzegovina, imposed unilateral embargos on Kosovo’s exports as one of the measures to punish Kosovo for its independence. As a landlocked country, Kosovo’s economic development depends on the north-bound trade routes that travel through Serbia for exports to the EU and other members of the Central European Free Trade Agreement (CEFTA). While Kosovo’s goods are embargoed, Serbia exports approximately $400 million annually, leaving Kosovo with a rampant current account deficit.

Despite Kosovo’s insistence, Serbia has repeatedly sidelined the topic of trade liberalization during the recent negotiations mediated by the EU. Belgrade officials were surprised by Kosovo’s reciprocity measure because Kosovo’s inchoate statehood renders it dependent on the international community, especially on the US, EU and NATO.

Kosovo’s economy is expected to experience a price hike in the short-run as importers struggle to substitute goods from other markets. However, this price hike can prove beneficial for Kosovo in the long-run by incentivizing local firms to expand production and in turn increase their competitiveness in the region. Other neighboring countries, such as Albania, Macedonia, and Montenegro, now see an opportunity to boost their trade with Kosovo. Serbia, the only looser in this game, has not only lost an export destination, but it is also jeopardizing its opportunity to earn candidacy status for the EU by the end of 2011.

For more than twelve years, organized crime groups operating in the Serb-dominated northern part of Kosovo (about 15 percent of Kosovo’s territory) used the Bernjak and Jarinje border crossings for smuggling, not only tariff-free imports from Serbia, but also for trafficking in human beings, drugs and illegal weapons. Supported by the Government of Serbia, ethnic Serbs in northern Kosovo continue to defy the legitimate authorities in Pristina. Any effort by the Government of Kosovo to restore rule of law in the north is expected to face resistance from the local Serbs. Serb extremist leaders of northern Kosovo, who support and take part in this organized crime, have a vested interest in maintaining the lawless limbo in this part of Kosovo.

The international community plays an important role in mediating a solution for northern Kosovo. International players should remind Serbia that it cannot become a candidate country as long as it breeds organized criminals and Serb extremists in neighboring Kosovo. KFOR and EULEX (the EU justice and police mission in Kosovo) should support law enforcement authorities of Kosovo in cracking down organized crime and bringing to justice the culprits who killed a police officer and attacked NATO peacekeepers.

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Pleurat Halili

Pleurat has written international news for the Communities since 2012. He is an entrepreneur, former UN staff member and a graduate of Columbia University’s School of International and Public Affairs.  He is interested in economics, politics, media, the European Union, and Southeastern Europe.


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