Trump Says Balkan Rivals Serbia, Kosovo Agreed to Economic Deal

President Donald Trump said that Serbia and Kosovo had agreed to “economic normalization,” in what he said was a step toward ending a two-decade old conflict. But the deal fell short of Belgrade recognizing its neighbor as an independent nation.

“My administration proposed a new way of bridging the divide by focusing on job creation and economic growth,” Trump said during a meeting with leaders of the two countries at the White House on Friday.

“I think they’re going to have a fantastic relationship,” he added.

But the actual impact of the deal Trump brokered, two months before his re-election contest, is uncertain.

The agreement calls for implementing previous airline, rail, and highway arrangements along, according to White House officials. But they declined to define “economic normalization.”’ The accord also includes a one-year moratorium on Kosovo’s efforts to seek membership in international organizations and Serbia’s campaign to prevent its recognition, officials said.

A statement released by Trump did not include any details about what the agreement would entail beyond a normalization of ties between Kosovo and Israel and Serbia’s commitment to opening a commercial office in Jerusalem this month and to move its embassy to Jerusalem next year.

Ric Grenell, the U.S. envoy for Serbia and Kosovo, criticized reporters at a White House briefing on the agreement, suggesting they “might be too young” to understand its importance or that it might be “too complicated” for them to comprehend.

But Grenell also struggled to detail what the pact had substantively changed, encouraging reporters to read it and claiming, incorrectly, that it had been released. After prompting from National Security Advisor Robert O’Brien, Grenell pointed out that the deal did call for the two countries to mutually recognize diplomas and professional certificates.

Asked for the full text of the agreement, the White House declined to provide it. Serbian President Aleksandar Vucic said in an interview after a meeting with Trump that he had signed a “bilateral agreement” with the American president, not an agreement that includes Kosovo.

Enduring Balkan Dispute

The Balkans dispute has endured since the two sides fought a war beginning in 1998 and Kosovo declared independence from Serbia a decade later. It’s no closer to resolution despite years of struggle at the negotiating table. Kosovo demands recognition as a sovereign state, which Serbia refuses to provide.

While pursuing “economic normalization” might help increase trade between the two nations, recognition remains the central issue. Rapprochment has faltered before, as when Kosovo slapped a 100% tariff on Serbian goods from 2018 to this year in retaliation for the Belgrade government’s efforts to deny it entry into international bodies, including the United Nations.

U.S. officials are trying to test whether better economic links will lead to a breakthrough.

“Your commitment to stabilize the region and bring peace and prosperity into the region is something we appreciate a lot,” Vucic told Trump at the meeting.

Yet the initiative has irked the European Union, which is mediating between the Balkan neighbors. EU officials say the U.S. may seek a deeper agreement but that its efforts are aimed at scoring a quick diplomatic victory rather than resolving the standoff.

An earlier White House meeting was scrapped when Kosovar President Hashim Thaci was accused of war crimes, including nearly 100 murders. Thaci denies the allegations.

A deal that normalizes political ties is crucial for both Serbia and Kosovo to progress on the path toward EU membership, which they hope can end decades of economic under-performance and the exodus of millions of their citizens in search of better lives in richer countries.

A 2013 Brussels Agreement on normalization of ties between Kosovo and Serbia was made under EU auspices, but never signed by either of the countries. While some parts of the agreement have been implemented, both sides claim many remain outstanding.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.