Free Trade Agreement of Serbia and China comes into effect today

The Free Trade Agreement of Serbia and China, which comes into effect officially today, and which will encompass over 20,000 products, will enable preferential access to the market of 1.4 billion citizens for Serbian producers, which, according to economists’ projections, should increase the exports to this country and include Serbian companies in Chinese global supply chains.

The Agreement, which encompasses 10,412 Serbian products (tariff positions) and 8,930 Chinese ones, was signed in October 2023 in Beijing by the ministers of trade of Serbia and China, Tomislav Momirovic and Wang Wentao, in the presence of the presidents of Serbia and China, Aleksandar Vucic and Xi Jinping. It is planned for 60% of the goods to be exempt from customs on the first day of the Agreement’s coming into effect, then another 30% in the next five to 10 years, whereas the most sensitive products, primarily agricultural ones, will remain protected.

The goods which will be exempt from customs five years from now will have the customs rate reduced by 20% a year by then, whereas the goods which will be customs-free in 10 years will have the customs rate reduced by 10% a year by then.

From July 1, among other things, it is possible to export fresh fruits and vegetables, pharmaceutical products, chemical products and products of the mechanical industry free of duty from Serbia to China.

The companies which use the advantages envisaged in the Agreement must prove that 50% of the value of each product that is being exported was created in the designated country of origin.

The minister of trade of Serbia, Tomislav Momirovic, estimated recently that the Free Trade Agreement with China was perhaps the biggest opportunity for Serbian companies in the preceding 25 years and invited Serbian companies to research the possibilities provided by the Agreement and use all the advantages that it provided when it came to increasing competitiveness, expanding business operations and increasing exports.

At the Chamber of Commerce of Serbia, they believe that the beginning of the implementation of the Free Trade Agreement with China is the biggest economic news for the economy of Serbia this year and a big step forward in the economic relations of Serbia and China, which have had a dynamic growth in the past 10 years.

In Serbia, it is expected for the Agreement to help balance the goods exchange, that is, to reduce the existing external trade deficit and increase the export-import coverage ratio, and it is also expected to expand the investment and production capacities in Serbia and strengthen the overall economic activities, as well as to change the perception of Serbia as a place to invest in.

China is among Serbia’s most significant economic partners and the biggest investors in the Serbian economy, amounting to over EUR 5.5 billion between 2014 and 2023, which was 17.5% of all investments in that period.

In 2023, the external trade of Serbia and China amounted to USD 6.09 billion, of which 1.2 billion pertained to exports from Serbia.

According to the data of the Chamber of Commerce of Serbia, the list of the five main products exported from Serbia to China featured copper ores and concentrates, cathodes, processed beechwood, frozen beef and engines.

At the same time, first on the list of Chinese products by the value of imports into Serbia were boilers, smart phones, portable machines, air-conditioning devices and non-ferrous sheet metal.

In Serbia, 1,560 companies with a majority Chinese capital operate and they employ around 20,600 workers, and nearly a third of last year’s foreign investments in Serbia came from China.

Except for Serbia, in Europe, only Switzerland and Georgia have this kind of a free trade agreement with China.

Ministarstvo unutrašnje i spoljne trgovine Republike Srbije

Privredna komora Srbije

Ministry of Trade

Chamber of Commerce of Serbia

Tomislav Momirović

Wang Wentao

Aleksandar Vučić

Xi Jinping

Free Trade Agreement of Serbia and China

fresh fruit

vegetables

pharmaceutical products

chemical industry products

mechanical industry products