Kosovo’s Bid to Lift Serb Trade Embargo Draws U.S. Rebuke

Bookmark

(Bloomberg) -- Kosovo will gradually lift tariffs on Serbian imports, a step toward easing a standoff between the neighbors that Donald Trump’s envoy to the region criticized as insufficient.

Pristina imposed the 100% tariff on Serbian goods in 2018 in retaliation to Belgrade’s efforts to block its international recognition, a move that effectively ended European Union-led talks toward rapprochement. Kosovo declared independence from Serbia in 2008, almost a decade after a war that ended with a NATO bombing campaign against Belgrade-backed forces.

Kosovo Prime Minister Albin Kurti said the levy will be removed for Serbian raw materials next month, the Beta newswire reported late Thursday. The announcement was met with criticism from the U.S. president’s envoy to the region, acting director of national intelligence Richard Grenell.

“Mr. Kurti is making a serious mistake,” Grenell tweeted hours after Kurti offered to cancel the tax on some imports next month and later remove other obstacles if the Serbian side accepts his terms. “We do not support Prime Minister Kurti’s half measure. Our position is quite clear: the tariffs must be completely dropped.”

The dispute between the remnants of the former Yugoslavia has bedeviled western leaders since the 1998-1999 war that killed more than 13,000 people, 80% of whom were ethnic Albanians. The European Union has demanded that they resolve their historic disputes to be considered for membership in the world’s biggest trading bloc.

Under Fire

Under Trump, Grenell, who also serves as U.S. ambassador to Germany, has been pushing for a deal between the two sides. Since last year, he has brokered agreements that may see the resumption of flights and road and rail links.

Kurti said the tariff on raw materials will be lifted on March 15 and on other products as of April 1, if Serbia stops its global campaign to prevent Kosovo’s recognition as a sovereign state and if it removes its own trade barriers. The levy will be reinstated in full if Serbia doesn’t comply, Beta newswire reported him as saying.

That may be a non-starter, as Serbia has refused to drop the lobbying campaign, backed by its allies Russia and China, that has kept it from joining international bodies including the United Nations.

“Grenell is entirely right, this is just a game,” Serbia’s President Aleksandar Vucic said. He called Kurti’s offer a “trick.”

Kurti, who took power this month after winning elections last year, also came under fire at home from his predecessor Ramush Haradinaj, who imposed the tariff and blasted him for “surrendering to Serbia.”

Kurti’s coalition partner, Deputy Premier Avdullah Hoti, was critical for the opposite reason, saying his Democratic League of Kosovo may quit the cabinet unless the tax is lifted without conditions that put U.S. support at risk.

The EU welcomed Kurti’s overture as a “first step” benefiting trade and a way to resume the dialog brokered by the bloc.

“Too much time has been lost,” Peter Stano, EU spokesman for foreign affairs said in a statement. “Serbia and Kosovo need to create an environment that is conducive for the Dialogue to resume, to the benefit of both.”

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.