(Bloomberg Opinion) -- On Friday, Serbian Prime Minister Ana Brnabic went to Moscow to sign a free trade deal with the Eurasian Economic Union (EEU), Russian President Vladimir Putin’s hapless European Union clone. It’s an economically insignificant deal for both sides, but it’s meant as a pointed reminder to the EU and the U.S. that when it comes to the Balkans, Western institutions are not the only game in town.
The truth of the matter, however, is that they are. Though Putin’s offer of mediation and support to foreign regimes is finding takers in the Middle East and, increasingly, in Africa, Russia has much less to offer Balkan countries than even Turkey or China, let alone the EU. Secure in that knowledge, EU leaders won’t worry too much about Serbia, a candidate for accession to the bloc, going rogue.
The economic background of the Serbian deal with Russian’s answer to the EU is lackluster. The Balkan nation already has free trade agreements with Russia, Kazakhstan and Belarus, the three biggest economies in the EEU, a bloc built by Moscow as an EU alternative for post-Soviet nations. The new agreement extends the cooperation to Armenia and Kyrgyzstan, neither of them a top 50 trading partner for Serbia nor a candidate for vastly increased trade volumes. (Armenia, for example, specializes in liquor and tobacco exports, but they are also among Serbia’s specialties.) For Russia, too, Serbia is relatively unimportant as an economic partner: The country generated $2.1 billion in trade turnover last year, 0.3% of Russia’s total. Most notably, Serbia, which didn’t follow the EU in imposing Ukraine-related sanctions on Russia, serves as a replacement supplier of fruit and vegetables, totaling $256 million last year.
This is, in other words, not the kind of watershed choice that Ukraine faced in late 2013 between EEU membership and an association deal with the EU. Both Russia and the EU were equally big trading partners for the country. The dilemma was so fateful and feelings about it so intense in Ukraine that then President Viktor Yanukovych was deposed months after refusing, under Russian pressure, to sign the EU deal.
Still, Serbia’s trade agreement is an act of mild rebellion. The EU doesn’t recognize the Russia-led trade bloc as a negotiating partner, demanding that Russia first follow the Minsk agreements on pacifying eastern Ukraine. As Serbia worked on the deal, it received repeated warnings from the EU that this represented an unwelcome detour from the European path. As Slovak Foreign Minister Miroslav Lajcak put it, “If you are serious about your European orientation then obviously you make political decisions that bring you closer to it. This is not one of them.”
Serbia has been told again and again that it’ll have to terminate any free trade deals when it joins the EU. This is understood in both Belgrade and Moscow. But when is that, exactly? Serbia’s accession negotiations started in 2014, and there's still no end in sight. This year’s EU report on Serbia’s progress indicates that there’s still much to be done in every area the parties are discussing. The EU is unhappy with President Aleksandar Vucic’s domineering political style. The normalization of Serbia’s relations with Kosovo remains a thorny issue. Besides, there’s no reason for the Serbs to expect an open arms welcome even if they do everything the EU wants from them: French President Emmanuel Macron’s opposition to starting accession talks with North Macedonia and Albania underscores his desire to slow down EU enlargement.
So Serbia flirts with Russia to show it has an alternative while the EU drags its feet. The trade deal is only part of it. Vucic has also made a show of expanding military cooperation with Russia. On Thursday, the Russian defense ministry announced Russia’s advanced anti-aircraft systems, the S-400, had been delivered to Serbia for a joint exercise. Besides, Russia has gifted to Serbia six MiG-29 fighter planes, 30 tanks and 30 armored vehicles. But Serbia buys Russian weapons, too; they make up almost half of Russia’s exports to the Balkan nation, totaling $490 million in 2018.
For the Kremlin, too, all this is a way to thumb its nose at Europe and the West in general. As Balkan nations seek EU and North Atlantic Treaty Organization membership, Moscow is doing its best to show an alternative is available — not just to Serbia, but to North Macedonia, another nation where a Slavic majority is relatively Russia-friendly.
These efforts are mostly for show, however, because no country can match the EU’s combined economic pull. Italy’s turnover with Serbia is 56% higher than Russia’s, and that’s just one EU member state. Last year, Serbia’s foreign direct investment inflow from the EU reached 2.1 billion euros ($2.3 billion), about 60% of the total, compared with less than 7% from Russia and China each. There will be Russian weapons sales and natural gas exports and Chinese attempts to increase influence through infrastructure projects including a high-speed railroad, but Serbia’s economic alignment with these countries can never match that with its European neighbors.
No wonder Serbia chose a free trade deal with the EEU rather than seeking full membership. According to a recent poll, only 17.6% of Serbs would like their country to join this bloc, while 47.6% favor EU membership and 34.8% are for total neutrality.
The EU shouldn’t worry too much, and the Kremlin shouldn’t get too excited: Serbia’s path leads into the EU, even if, as with many other recent accessions, the going is excruciatingly slow.
To contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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