At the European Council on 28 June, 2013, heads of state and government of the European Union agreed unanimously to open accession negotiations with Serbia.
As Croatia became the EU’s 28th member just days later, this was another boost for EU enlargement, the process by which the laws, standards of governance and economic liberalisation of the EU’s single market have spread to the formerly socialist countries of Eastern and South-eastern Europe. Previous waves of enlargement have been accompanied by rising incomes and productivity in accession countries. Serbia expects much greater investment from Western Europe and elsewhere as a result of this crucial step on its road to EU membership.
Accession negotiations do not in themselves imply more EU funding or increased economic growth. But the process of reforms across all sectors of the economy, public administration and society should open up a huge range of business opportunities, whilst simultaneously improving the trade and investment environment and helping to raise incomes. Barriers to trade between the EU and Serbia are already extremely low for nearly all sectors. The accession process and the implementation of Serbia’s “Stabilisation and Association Agreement” with the EU finally fully ratified in June will see these fall further.
As Serbian economic and administrative legislation undergoes wholesale reform during the negotiation process, analysts see particular potential in Serbia’s energy, infrastructure, environment, security, ICT, and agricultural sectors – sectors which UKTI Serbia follows particularly closely. But recent new entrants to the market are also finding opportunities in everything from auto component manufacture, to textiles, to real estate, to consumer goods.
Prior to the global economic crisis, Serbia had been growing for a decade at an average rate of about 6% per annum, following the establishment of democratic government. Its population of just over 7 million have familiar west-European consumption habits. Its banking system is stable and comprised mainly of subsidiaries of west-European parents. Visiting from the UK is easy and business is usually conducted in English.
The opening of accession negotiations, which will commence no later than January 2014, is dependent on Serbia’s continued implementation of agreements reached with its neighbour Kosovo. Serbia does not recognise Kosovo as independent; however the two countries recently reached an historic understanding with the so-called 19 April First Agreement of Principles Governing the Normalisation of Relations. This continued ‘normalisation of relations’, to which the Serbian government proclaims its commitment, will be crucial to Serbia’s continued progress towards EU membership.