Serbian foreign policy increasingly under strain; strict control on EU goods re-exportation to Russia

Recent American and European sanctions against Russia have put Serbia’s foreign policy under strain. After most European Union countries’ foodstuffs  were prevented from entering the Russian market on August 7th, non-member states have seized the opportunity to increase their own exports towards the Russian territory. It is notably the case of Serbia after Belgrade announced on August 12th the creation of a Coordination Center which should reinforce its control over groceries’ transit from Europe to Russia. It will also aim at cracking down on countries trying to bypass the Russian ban through repackaging their goods in Serbia. This strategy could weaken its move towards the European Union. 

Opposing re-exported goods through Serbia

Following Moscow’s decision to ban most foodstuffs coming from EU countries’ from entering its territory in retaliation to EU and US sanctions imposed on the Kremlin for its potential implication in the ongoing Ukrainian conflict, many European companies have had to revise their economic strategy. A few days ago, the Croatia’s Employer’s Association advised its national enterprises to repackage their products in Serbia before re-exporting them to Russia, an option that turned out to be cheaper than finding new markets where to sell their merchandise. Serbia was not touched by the Russian ban because it is not yet part of the European Union, contrary to Croatia which joined the EU in July 2013. Serbian Trade Minister Rasim Ljajic affirmed that "calculations, announcements, and even talks about importing apples from Macedonia and Bulgaria, and then re-exporting them through [Serbia] to the Russian market," had multiplied.

Belgrade strongly reacted to the proposal. Rasim Ljajic condemned “frauds” that would violate Russian rules and endanger Serbian exports. “Every attempt to sell food, fruit and vegetables from the EU to Russia through Serbia will be stopped,” he said. This is the reason why they created a Coordination Center, under the control of the Serbian Chamber of Commerce, in order to “prevent repackaging, forgery and re-export, but also meet all sanitation, hygiene, health and other standards that are rigorous.” It should be in constant contact with the Trade Mission of the Russian Federation in Serbia.

Challenging Serbia’s foreign policy

So far, Serbia has not backed Western sanctions and has thus been unaffected by Moscow’s decisions. In reality, Serbia’s economy is likely to benefit largely from the Russian ban by taking over some products that were previously sold by EU member countries. The Russian Federation is Serbia’s third biggest trading partner after Italy and Germany. “We will certainly not allow a minority to damage by speculative activities the reputation of Serbia as good exporter,” declared the Serbian Chamber of Commerce President Željko Sertić. 

The tense relations between the EU and Russia largely challenge Serbia’s foreign policy, especially on the eve of its accession to the OSCE chairmanship in 2015. While Belgrade increasingly turned westwards by signing the Association Agreement with the EU in 2008 and becoming an EU candidate-member in 2012 before declaring its accession to the EU as its foreign policy priority, it has reaffirmed its willingness to preserve good relations with Moscow. “Serbia does not want to damage good, friendly relations with Russia” said Prime Minister Aleksandar Vučić when visiting Moscow in early July.

The country has not backed the European Union’s sanctions saying it had “traditional, historical and economic reasons” to do so. Alongside Macedonia and Bosnia and Herzegovina, Serbia is involved in the Russian South Stream project, which aims at transporting Russian natural gas to Southern and Central Europe countries through the Black Sea and bypassing Ukraine. The project has been opposed by the European Union who  suspects Russia of making advantage of its favourable position in former Soviet countries to distort the European gas market. Tanja Miščević, head of the negotiating team with the EU eluded the question by declaring that "Even when a country joins the EU, it has the right to have stronger and better ties with some of the world's countries. It is not unusual for some important countries, including the founders of the EU, to have very good relations with Russia.” At the end of July, the Italian Foreign Minister Federica Mogherini had declared that Belgrade should align its foreign policy with the EU more.

While pressure from Brussels and Washington are increasing, Serbia finds itself in a delicate situation. Former ambassador to Ukraine Dušan Lazić concluded in this sense : "So far, [Serbia’s] attitude towards East and West has held water, but I do not think it can last for a long time." The OSCE chairmanship next year should hopefully clarify its orientation.       

Sources : Le Courrier des Balkans, In Serbia I, In Serbia IIB92 I, Bloomberg I, B92 II, Balkan Insight, European Forum for Democracy and Solidarity, B92 III, Bloomberg II.

Author : Laura Gounon

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