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Regional Cooperation and European Integration in the Western Balkans

Regional Cooperation and European Integration in the Western Balkans. Milica Uvalic University of Perugia European Movement - Serbia Belgrade, May 30-31, 2008. Introduction. Main channels for the reintegration of the Western Balkan countries, after 2000

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Regional Cooperation and European Integration in the Western Balkans

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  1. Regional Cooperation and European Integration inthe Western Balkans Milica Uvalic University of Perugia European Movement - Serbia Belgrade, May 30-31, 2008

  2. Introduction • Main channels for the reintegration of the Western Balkan countries, after 2000 • Regional (intra-SEE) integration, through initiatives on regional cooperation (‘regionalism’) • Integration with the EU (bilateralism) • In WB region: integration with EU welcomed, but regionalism viewed with suspicion

  3. Introduction Evolution of these processes - regionalism and bilateralism - by focusing primarily on the 1st • 1. Regional cooperation (rationale, different perceptions…) • 2. Some achievements of RC In the economic area  trade liberalization • 3. Prospects? Open questions

  4. 1. Regional cooperation • Regional cooperation in SEE on the EU agenda for over 10 years (since 1996) • In SEE, RC rejected on various grounds • Delays entry into the EU • Fear of revival of former Yugoslav space • SEE not a region due to low level of trade, similar economic structures… • Externally imposed concept, not in line with national interests (“external engineering”) • Still today contested, viewed as ‘ineffective’, perceived differently, controversial…

  5. Why regional cooperation? • Political: good relations with neighbours as key instrument for promoting peace and stability in SEE • Economic: more intense economic links/trade liberalizationpositive for growth, FDI (larger market, economies of scale…) • EU integration: RC as precondition for faster entry into the EU (following exp. EU, CEFTA) • Interdependence: regional dimension of problems (infrastructure, refugees, security)

  6. If so, why different perceptions? Assessment of regional cooperation depends on • 1. Definition of the SEE region • Western Balkans • WB + Bulgaria, Romania, Moldova (SEE) • SEE + Greece and Turkey • 2. Historical context (1989, 2008) • In 1989, SEE not a region – low integrationamong 4 SEE Cs (Alb, Bulg, Rom, SFRY) - 2 subregions • 2008: ‘Emerging’ region integration among WB • 3. Area of cooperation: in some areas more effective than in others

  7. 2. Achievements of RC After 2000, many positive developments (despite remaining problems) • Numerous RC initiatives within the Stability Pact, important steps forward • Trade  Regional Free Trade Area (2001) • Energy  Energy Community Treaty (July 2006), integrated energy market (electricity, natural gas) • Transport  Core Regional Transport Network (2004) …many others • Change of perceptions of RC

  8. Achievements of RC… Positive evolution of the concept of RC • From a vague political objective  concrete initiatives and results • From externally imposed aim  more ‘regional ownership’- long way from Zagreb to Sarajevo (Regional Coop. Council in 2008) • RC and EU integration no longer viewed as ‘mutually conflicting’, but complementary (1st step towards EU), RC initiatives as ‘building blocks’ towards EU

  9. Achievements of RC… • In the economic sphere, SEE integration through trade liberalization (Stability Pact MoU on Trade liberalization and facilit. June 2001)  network of bilateral FTAs (WB + Bulg, Rom, Moldova), regional free trade area • Important step forward in late 2006  bilateral FTAs transformed into ‘CEFTA 2006’ • Multilateral agreement (harmonized provisions) • Modernized to include services, IPR, public procurement, investment promotion • System for resolution of disputes…

  10. Achievements of RC… Results of regional trade liberalization? Initially lots of scepticism, various reasons • After 1991 (break-up of SFRY)  trade barriers, drastic reduction in volume of trade, stagnation of trade throughout the 1990s…Recovery difficult • EU policies of trade opening (autonomous trade preferences in 2000, SAAs)  EU market main target of SEE countries, no scope for intra-regional integration

  11. WB exports in the 1990s

  12. Achievements of RC… Trade patterns of SEE Cs after 2001? • Increase in trade both with the EU and with the SEE region • Trade with the EU: EU main trading partner of all SEE Cs, except Moldova • But EU as trading partner much more important for Albania, Bulgaria, Romania, than for Cs of former Yugoslavia

  13. Achievements of RC… Regional (intra-SEE) trade? • Alb, Bulg, Rom: intra-SEE trade shares (exp, imp): lower than 5%, never over 10% of total • For the ex-Yu Cs, on the contrary, relative shares much higher, especially for FYRoM, B&H, Serbia, Montenegro (30-40% of total trade), also Kosovo – trades much more with Serbia and Macedonia than with Albania • Even more important: trends in the volume of regional trade significant increase • Example of Serbia

  14. Serbia: threefold increase in regional exports & imports

  15. Achievements of RC… Impact of trade liberalisation initiative? • Positive for some Cs, primarily ex-Yu [but could also be the effect of limited competitiveness on EU markets] • Little impact for others (Albania, Bulg, Rom, Moldova) • Reasons for such a different impact?

  16. Achievements of RC… • History: For ex-Yu Cs key role of past political & economic linkages • EU trade policies: very different for individual SEE Cs • Earlier access to EU markets of Bulg, Rom, even Albania, than for other SEE Cs • Trade of Alb, Bulg, Rom determined primarily by EU measures in the 1990s, much less by the 2001 regional trade liberalisation initiative •  Importance of timing (& coordination) of different EU trade measures

  17. 3. Prospects Regional cooperation • Crucial moment for ‘regional ownership’, with the phased transfer to RCC (2008)  How to maintain momentum? • Further fragmentation of the region when Croatia joins the EU (as in 2007 Bulg, Rom) • After Kosovo proclamation of independence, RC constrained by present political tensions in the region • Return to ‘political normality’ very urgent!

  18. Prospects… • Key to stability in the region: Serbia • Serbia’s present strategy is costly and non-affordable (to the detriment of all) • Serbia risks even greater loss if it holds on to Kosovo, it should accept reality & look into the future • How to find an exit strategy? Not exclusively in the hands of Serbia, an agreement among ‘imposers’ is needed • (‘international management of sovereignty’)

  19. Prospects… European integration • Despite EU intentions to accelerate SAP (March 2008), in WB return of pessimism Room for rethinking EU policies • Too strict conditionality could be counterproductive (e.g. Mladic – not only political will, but government capacity to deliver)  more flexibility • Incentives can be efficient (SAA  Serbian elections), could be even stronger

  20. Prospects… Additional EU incentives? • Specify approximate time frame of next EU enlargement(s) - e.g. within the 2007-13 financial perspective? • Promote all WB Cs into EU candidates? If EU commitment is there, would be an important incentive (‘absorption capacity’ less problematic today, after Lisbon)

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