CROATIA TO SIGN TRADE PACT WITH KOSOVO

UNCLAS ZAGREB 001182

SIPDIS

SIPDIS

FOR EUR/SCE BALIAN, RIEHL

E.O. 12958: N/A
TAGS: ECON PREL UNMIK YI HR
SUBJECT: CROATIA TO SIGN TRADE PACT WITH KOSOVO


1. Summary and Comment: Croatian Minister of Economy
Branko Vukelic will sign a recently-concluded trade
deal with Kosovo in Zagreb on September 28. Although
Kosovo represents a relatively minor market for
Croatia, trade between the two has been growing
steadily in recent years. The deal comes as
Croatian companies have actively sought to
strengthen their presence in the markets of the ex-
Yugoslavia and in anticipation of a resolution of
Kosovo's status. The agreement is the fruit of
enlightened self interest and the GOC's policy of
playing a constructive role regionally. End
Summary.


2. Croatia will sign a free trade agreement with
Kosovo on September 28 in Zagreb. The agreement
will eliminate most tarrifs on the small but growing
annual trade exchange between Croatia and Kosovo.
Trade between Croatia and Kosovo reached
approximately 70 million dollars in the first six
months of 2006, more than double the total of 33
million dollars recorded in all of 2005. In this,
Croatia logs a strong surplus.


3. A Ministry of Economy contact told econ off
that, although Kosovo does not represent a
particularly large market for Croatia, it is
attractive to Croatian firms that are trying to
recapture market share in the countries of the ex-
Yugoslavia. He also underscored Croatia's interest
in helping Kosovo economically by opening Croatia's
market.


4. More than half of Croatia's exports to Kosovo
are food and food products, with industrial products
accounting for the balance. Electric motors and
generators account for most of the modest imports
from Kosovo.

BRADTKE