Trade War Hurts Chances of Ending Balkan Feud, Serb Leader Says

(Bloomberg) -- Tariffs that Kosovo slapped on Serbian products for lobbying against its international recognition have undercut the chance of a lasting settlement that both nations need for eventual European Union entry, Serbian President Aleksandar Vucic said.

“I’m afraid that no compromise is closer after this,” Vucic told reporters. “If you cannot agree on elementary things, such as revoking these criminal taxes, how can you agree on bigger, more important things?”

The neighbors appeared to near a deal earlier this year -- a decade after Kosovo declared independence from Serbia -- that would help clear the path for the Balkan neighbors to advance toward EU membership.

That fell apart this week after Serbia, which has refused to recognize Kosovo as a country, helped block it from joining Interpol, the international police body. Kosovo responded by imposing 100 percent import levies on Serb goods, all but halting about $500 million in annual sales. Despite a call from Germany to remove the trade barrier, Kosovo Premier Ramush Haradinaj reiterated on Thursday that the tax will stay until Serbia changes its stance.

Serbia and Kosovo are part of the Central European Free Trade Agreement, or CEFTA, for aspiring EU members. U.S. National Security adviser John Bolton said on Wednesday, after meeting Kosovo President Hashim Thaci, that the “time is now” for the neighbors to reach an accord.

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