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Trade Regime

Trade Regime
Custom Regime

Kosovo has a liberal trade regime and derives three major benefits from trade liberalisation, namely improved export possibilities, a better investment environment, and stable relations with its neighbours.

Committed to establishing principals for stable development of a pure market economy, since a very early stage of development, Kosovo’s government has been working towards establishing the free movement of goods and services throughout the country’s borders

As a result, Kosovo currently enjoys a free trade within Central European Free Trade Agreement – CEFTA, enabling its producers to access the regional market comprising of 28 million consumers, free of any customs duties.

In addition, Kosovo benefits from nonreciprocal, customs-free access to the EU market based on the EU Autonomous Trade Preference (ATP) Regime EU Council Resolution 2007/2000) as well as from cutoms-free access to the US market. Quantitative and qualitative restrictions remain in force only for a very limited number of goods.

Kosovo is still an import based economy. Imports have been increasing steadily in recent years (as the figure shows) reaching some 1.9 billion Euro at the end of 2008. Due to its geographical proximity, the main importing countries in Kosovo are CEFTA-members followed by the EU-countries.

Even though local production is increasing steadily, Kosovo is still forced to import goods and raw materials that are not offered by the local market. The main imports of commoditygoods range therefore from prepared foodstuff, beverages and tobacco, and minerals to machinery and articles of stone.

Recognising the opportunities that the local market is offering, and benefiting from various cross-sector incentives introduced by the Government, the local production has been growing exponentially in recent years. Not only is the local demand continuously relying on the local production but furthermore Kosovo is increasingly exporting to its main trade partners, EU-countries and CEFTA-members.

At the end of 2008, exports reached 195.9 million Euro, comprising mainly of base metalsand leather that Kosovo has in sufficient quantities as well as vegetables and foodstuff. Given that the country has a very favourable business climate, a modern legal framework and cheap work force, and taking into consideration that there is still immense opportunity for local producers to fulfil market demand and also approach the regional market, local production as well as exports are expected to increase further in the future.