Free Trade Agreement signed between the Republic of Serbia and the People’s Republic of China

The Republic of Serbia and the People’s Republic of China signed a landmark free trade agreement (“FTA”) at the Third Belt and Road Forum for International Cooperation. The Agreement was signed by the Ministers of Trade of both parties, who expect it to usher in a new era of economic cooperation between them.

The Free Trade Agreement provides for extensive liberalisation of the transport of goods between the two countries. The agreement covers more than 10,000 different types of goods, making international trade between the two sides freer and easier.

During the forum, representatives of the two countries signed several other important documents, such as a medium-term bilateral action plan for the implementation of the Belt and Road Initiative and several memorandums on economic cooperation.

The forum also discussed issues related to road and railway infrastructure projects, the upgrading of the fixed-line telephone network and apple exports, and signed several related protocols to ensure a wealth of new investment and international trade opportunities for Chinese and Serbian enterprises.

The free trade agreement between China and Serbia is expected to enter into force by June 2024.

Main elements of the China-Serbia FTA

Comprises a preamble and 10 chapters:

Commodity-related chapters include trade in goods, rules of origin and enforcement procedures, customs procedures and trade facilitation.
Sanitary and phytosanitary measures (SPS), technical barriers to trade (TBT) and trade remedies are also included in the chapter on trade in goods.
Chapters on other regulatory areas include investment and services, intellectual property protection, competition.
Legal and institutional chapters include general provisions, institutional provisions, dispute settlement and final provisions.
Annexes include tariff schedules of commitments, product-specific rules of origin, certificates of origin, declarations of origin, rules of procedure for arbitral tribunals, cooperation in the field of health and cooperation in the field of traditional Chinese medicine.
Serbia is in the process of applying for WTO membership, but the agreement ensures compliance with WTO rules.

Key features of the China-Serbia FTA include:

High degree of liberalisation, including reciprocal elimination of tariffs on 90 per cent of tariff lines and immediate elimination of tariffs on more than 60 per cent of tariff lines
Broad product coverage, including gradual tariff reductions for products of concern in the agreement
Implementation of facilitation measures, deepening customs cooperation and simplification of trade procedures.

China-Serbia FTA provisions on rules of origin

Includes rules of origin and procedures for implementation of rules of origin.
General rule of 40% regional content and product-specific rules of origin
Declaration of origin as proof of origin and simplified procedures

What are the provisions of the FTA on rules other than trade in goods?

Investment and services, including investment promotion and facilitation
- In the area of intellectual property, compliance with WTO rules
- In the area of competition, the recognition of the independence of competition authorities and the setting of rules for business competition to be followed.
- Cooperation on health and traditional Chinese medicine

Agreements entered between the Republic of Serbia and the People’s Republic of China during the Third Belt and Road Forum for International Cooperation.

Follows a list of general agreements signed:

Free Trade Agreement;
Memorandum on Exchange and Cooperation in Economic Development Policies;
Memorandum on Joint Improvement in Industrial and Investment Cooperation Between Serbia and China;
Mid-term Action Plan on Joint Implementation of the Belt and Road Initiative Between the Governments of the PRC and Serbia;

Infrastructure agreements:

Smile of Vojvodina Roadway (Bački Breg – Sombor – Kikinda – Srpska Crnja)

This contract was signed with China Construction Eighth Engineering Division, which conducts work in the Republic of Serbia for the first time. At a meeting with the head of the company, it was agreed that the construction of the roadway would begin in November this year;

High-Speed Railway Agreement (five high-speed trains acquired from Chinese partners)

A contract was signed for the purchase of five high-speed trains that will run on the high-speed train between Belgrade and Budapest. 54 million euros will be paid for the five trains, the lowest price ever paid for a high-speed train in Europe, and all the trains must comply with all EU standards and have European certificates;

Belgrade-Zrenjanin-Novi Sad Highway Agreement

The total length is 105.4 kilometres. A contract was signed with a Shandong-based company and work will begin next year;