BUSINESS ENVIRONMENT ACTIVITY

Macedonia’s Recent Trade Agreements Opportunities and Threats for Bottled Wine, Table Grapes, Fresh Vegetables, Processed Vegetables
and

Wild Harvested Products
USAID Macedonia
Daniel Plunkett, AIRD Ljupčo Tošev, FACE April 17, 2008

Table of Contents
Executive Summary.............................................................................................................5 Macedonia’s Recent Trade Agreements..............................................................................8 Central European Free Trade Agreement (CEFTA)........................................................8 Macedonia-Turkey Free Trade Agreement....................................................................13 Macedonia-Ukraine FTA...............................................................................................15 Macedonia-EFTA Trade Agreement.............................................................................15 Macedonia’s Stabilization and Accession Agreement with the European Union.........16 Macedonia’s EU Accession...........................................................................................19 Bottled Wine......................................................................................................................21 Opportunities..................................................................................................................23 Threats............................................................................................................................24 Recommendations..........................................................................................................25 Table Grapes......................................................................................................................26 Opportunities..................................................................................................................28 Threats............................................................................................................................29 Recommendations..........................................................................................................29 Wild Harvested Products...................................................................................................30 Opportunities..................................................................................................................32 Threats............................................................................................................................33 Recommendations..........................................................................................................33 Fresh Vegetables................................................................................................................34 Opportunities..................................................................................................................36 Threats............................................................................................................................38 Recommendations..........................................................................................................39 Processed Vegetables.........................................................................................................40 Opportunities..................................................................................................................43 Threats............................................................................................................................44 Recommendations..........................................................................................................45 Bibliography......................................................................................................................46 List of Persons Interviewed...............................................................................................47 Annex One: CEFTA Concessions Related to Macedonia ................................................49 Annex 2: Concessions under the Macedonia-Turkey Free Trade Agreement...................64 Annex 3: Concessions under the Macedonia-Ukraine Free Trade Agreement..................67 Annex 4: Concessions with Switzerland and Liechtenstein under the Macedonia-EFTA Free Trade Agreement.......................................................................................................69

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List of Acronyms CEFTA EFTA HS IPARD MFN SAA TRQ UNMIK List of Tables Table 1: Macedonia’s Exports for Products of Interest 2004-2007 Table 2: Demographics of the EFTA-4 Table 3: Tariff-rate Quotas for Imports of Macedonian Wine into the EU Table 4: Tariff-rate Quotas for Imports of EU Wine into Macedonia Table 5: Market Access for Macedonian Bottled Wine Table 6: Macedonia’s Exports of Table Grapes in 2007, By Destination Table 7: Macedonian Exports of Ajvar and Lutenica List of Figures Figure 1: Timeline of Upcoming Dates Related to Macedonia’s Trade Agreements Figure 2: Operation of a Tariff-Rate Quota Figure 3: Macedonian Exports of Processed Vegetables List of Boxes Box 1: History of CEFTA Box 2: EU Accession—Prospects and Strategy Central European Free Trade Agreement European Free Trade Agreement Harmonized System (for tariff nomenclature) Instrument for Pre-Accession Assistance and Rural Development Most Favored Nation tariff Stabilization and Association Agreement Tariff-Rate Quota United Nations Interim Administration Mission in Kosovo

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List of Annex Tables Table A-1: Albania’s Quotas for Imports of Interest from Macedonia Table A-2: Albania’s Tariffs for Imports of Interest from Macedonia Table A-3: Bosnia’s Tariffs for Imports from Macedonia Table A-4: Croatia’s Quotas for Imports from Macedonia Table A-5: Croatia’s Tariffs for Imports from Macedonia Table A-6: Moldova’s Quotas for Imports from Macedonia Table A-7: Moldova’s Tariffs for Imports from Macedonia Table A-8: Montenegro’s Tariffs for Imports from Macedonia Table A-9: Serbia’s Tariffs for Imports from Macedonia Table A-10: Kosovo’s Tariffs for Imports from Macedonia Table A-11: Macedonia’s Tariffs on Imports from CEFTA Countries Table A-12: Macedonia’s Quotas for Imports from Albania Table A-13: Macedonia’s Quotas for Imports from Croatia Table A-14: Macedonia’s Quotas for Imports from Moldova Table A-15: Macedonia’s Quotas for Imports from Turkey Table A-16: Turkey’s Quotas for Imports from Macedonia Table A-17: Ukraine’s Quotas for Imports from Ukraine Table A-18: Macedonia’s Quotas for Imports from Ukraine Table A-19: Switzerland’s Concessions on Imports from Macedonia 4 .

in particular. EU accession will not bring new market access for Macedonian exports. table grapes. table grapes. which promises to heighten competition in both Macedonia’s export markets and on Macedonia’s own domestic market. Macedonia also signed trade agreements with the 4 EFTA countries. The biggest threat from the recent trade agreements will come from increased imports of EU wine and processed vegetables. wild harvested products. fresh vegetables and processed vegetables.Executive Summary Macedonia has signed five recent trade agreements that secure a place in Europe and provide significant opportunities for expanding exports in each of the five value chains supported by the USAID program AgBiz: bottled wine. This report examines the details of the recent trade agreements. this is the “honeymoon” period for Macedonia. but CEFTA 2006 did strengthen the institutional framework for trade amongst the 8 members sufficiently in order for the agreement to be properly implemented and trade has flourished. Macedonia’s Stabilization and Association Agreement with the EU is now in its second phase. once Macedonia joins the EU. all the more reason for Macedonian farmers. while the greatest threats lie ahead with EU accession. and eventual EU accession. except that Macedonia’s table grapes and fresh vegetables will no longer be subject to the EU’s system of reference prices. bringing together a network of 32 bilateral trade agreements governing trade in these sensitive agricultural products in Southeastern Europe. companies in the 5 value chains supported by AgBiz must seek to exploit opportunities from the recent trade agreements. In many ways. Perhaps the best opportunity arising from the recent trade agreements is for exporting fresh vegetables and bottled wine to Ukraine. But there will be plenty of new risks upon EU accession. In order to expand their exports. The Central European Free Trade Agreement (CEFTA) was revised and re-launched in 2006. opening excellent opportunities in each of the 5 value chains. analyzing the opportunities and threats related to each of the value chains and providing 36 recommendations for how to expand the value and volume of exports. The CEFTA 2006 opened little new market access for Macedonian exporters of bottled wine. fresh vegetables and processed vegetables. processors and traders to make every effort to benefit from the pre-accession IPARD funding. with most EU tariffs being phased out by the end of 2010. but they also need to improve their business practices and place new emphasis on short-term market 5 . in terms of having excellent market access to the EU but without having to open its own market much. A key challenge for Macedonia is to rally investment from the private sector to accompany the pre-accession money available from the EU (under IPARD) and to access the new funds available from the Macedonian government’s growing agricultural budget. wild harvested products. Turkey and Ukraine. The best opportunities arise from the Macedonia-Ukraine Free Trade Agreement.

the Annexes of this report contain the details of the concessions between Macedonia and its partners under CEFTA and the agreements with EFTA. Turkey and Ukraine. To aid them in penetrating new markets. 6 .penetration and long-term strategic planning.

Tariffs on other EU products still at 70% of Macedonia’s MFN rate 2009 -CEFTA negotiation on further tariff cuts (ask Croatia to eliminate quota for wine) -Macedonian trade negotiators should be interacting with EU counterparts regarding third-party access upon EU accession (especially maintaining access to Serbia’s market for key Macedonian products) 2010 -Final phase-in of deals with Ukraine. EU products now enter Macedonia freely. Turkey and the EFTA countries -Croatia’s accession to the EU? (better access for Macedonian wine. annual adjustments of EU wine quotas. new tariffs on imported glass containers) -Under SAA. final tariffs on most EU food products come down (0%) -Macedonia’s accession to the EU (date?) expected to precede accession by Serbia.Figure 1: Timeline of Upcoming Dates Related to Macedonia’s Trade Agreements 2008 -Final CEFTA tariffs come down. 7 . -Under SAA. tariffs on most EU food products still at a protective level (50% of MFN) 2011 -Under SAA. except those governed by quotas.

Suddenly landlocked. processors and exporters can weather many storms. the country faces higher shipping costs as other handlers become involved. Box 1 shows the history of membership in the original CEFTA. For Croatia. Known as an exporter of farm and food products in Yugoslav times. Macedonia has maintained duty-free access on nearly all exports in the 5 AgBiz value chains to many of its traditional markets in former Yugoslav countries: BosniaHerzegovina. which in addition to trade concessions also includes a common approach to intellectual property rights. dispute settlement. trade embargo on Serbia—have shown that Macedonia’s farmers. and Kosovo (UNMIK—the United Nations Interim Administration Mission in Kosovo).Macedonia’s Recent Trade Agreements The Republic of Macedonia has been active in signing and implementing trade agreements in recent years. markets in Albania and Moldova are newly open to exports from Macedonia. Macedonia had “a long list of products under licensing from the Ministry of the Economy for protective purposes which is being terminated before WTO accession (World Bank 2003). The old CEFTA was not nearly as comprehensive a trade agreement as the new CEFTA. Montenegro. and Macedonia is well-positioned to establish itself amongst the other members of the EU. Central European Free Trade Agreement (CEFTA) Macedonia was one of the last countries to sign onto the original CEFTA treaty but one of the first to implement the second CEFTA treaty known as “new CEFTA” or “CEFTA 2006. Macedonia has privileged access under CEFTA. Macedonia has been following a progressive opening-up to the outside world since the trade conflicts experienced during the latter parts of the 1990s. Nevertheless. investment policy. Prior to WTO membership in 2002. With the CEFTA. The trade concessions under the old CEFTA were a matter for bilateral negotiation among the different member countries. with quotas governing imports into Croatia on certain sensitive products. 8 . from the same source.” Both the old and the new CEFTA treaties were “made in Brussels” in that the European Commission was instrumental in bringing together the trade negotiators for the Central and Eastern European countries and reconstructing a formalized system of trade links amongst themselves.N. The series of events leading up to the signing of CEFTA 2006—such as being the target of the Greek trade embargo or being affected by the U. resulting in a network of 32 bilateral agreements. Macedonia was praised for having made “the largest strides” toward establishing the network of agreements with the countries of Southeastern Europe. safeguards. and other aspects. While a republic of the former Socialist Federated Republic of Yugoslavia. Serbia. exporters from the present Macedonia had access to seaports. which was superseded by CEFTA 2006.

customs cooperation and non-tariff barriers. The old CEFTA with the network of bilateral deals was clearly insufficient. Moldova. Hungary. Bosnia-Herzegovina. including Macedonia’s deals with Albania. 2007: Bulgaria and Romania join EU. January 2006: Macedonia joins old CEFTA. SerbiaMontenegro.” Macedonia’s government found the bilateral deals to be “disappointing—they failed to invigorate regional trade or eliminate mutual trade barriers… (they) lacked appropriate implementation infrastructure. with the Republic of Moldova in 2004. 1996: Slovenia joins. Bulgaria in 2000. Serbia and Kosovo all join new CEFTA. 1999: Bulgaria joins. The “New 9 . The new CEFTA 2006 changes little in terms of market access for Macedonian exports. “Establishment of a hodgepodge of bilateral free trade arrangements. Slovakia and Slovenia join EU. Poland. Poland. such as agriculture. The CEFTA 2006 provided for a Secretariat seated in Brussels and for procedures for selecting a mediator in case of disputes. 2002: Croatia joins. leave new CEFTA. Moldova. There are also high-level sub-committees to deal with priority issues for implementation. Montenegro.Before even becoming a member of the old CEFTA agreement. Box 1: History of CEFTA 1992: Czech Republic. in order to be more inclusive than under the more-restrictive criteria of the old CEFTA. but strongly reinforces the institutional framework for regional trade. Sept-Oct 2006: Albania. Macedonia. The criteria for membership for the new CEFTA were watered-down slightly. Montenegro and Kosovo (UNMIK) in 2005 that came into force in 2006. leave CEFTA. and there was no recourse for sanctioning behavior” (Ministry of Economy 2007a). 1997: Romania joins. On the contrary it may lead to significant efficiency losses (World Bank 2003). Slovakia sign first CEFTA. especially in the context of extremely weak and sometimes corrupt customs services is not likely to enhance trade prospects or increase incomes and employment in the region. Albania and Bosnia-Herzegovina in 2002. and finally signing deals with Serbia. The 2006 CEFTA Treaty details all of the bilateral treaties that are superseded by the CEFTA. Bosnia. Member countries often failed to fulfill their commitments. Hungary. with Slovenia in 1999. 2004: Czech Republic. and Kosovo. Macedonia signed bilateral trade agreements in 1997 with the Federal Republic of Yugoslavia and with Croatia.

and Serbia ratifying the agreement later on in 2007. with negotiations on further liberalization to start no later than May 2009. Montenegro and UNMIK). but tariffs on most products are to be eliminated by the end of 2008. Figure 2 OPERATION OF A TARIFF-RATE QUOTA Price World price + over-quota tariff Domestic price in Macedonia World price + in-quota tariff World price RENT Over-quota tariff In-quota tariff Quota Import volume For many of Macedonia’s bilateral trade relationships. Macedonia. Under this schema. The CEFTA also provides a forum for negotiating further tariff reductions. For those able to import at the in-quota tariff rate. such as those with the other countries of the former Yugoslav Socialist Federated Republic. 10 . agricultural products 1 Macedonia’s recent trade agreements all use “tariff-rate quotas” (TRQs). such that applied duties may not be increased and no new equivalent charges may be assessed. as these are close markets.” to govern market access for several sensitive agricultural products. it may be possible to realize an economic rent (or in other words. In the early part of this decade. a good profit). import volumes up to the level of the quota quantity can enter at a reduced tariff (often zero). two-way trade was already unencumbered by tariffs or quotas. with a common language from the former Yugoslavia. Quantitative restrictions were eliminated under CEFTA. that are relatively transparent for Macedonian exporters to penetrate. also known as “tariff quotas” or simply “quotas. with other countries such as Bosnia-Herzegovina. with import quantities above the quota volume assessed a higher tariff (Figure 1). while imports for quantities exceeding the quota quantity must pay a higher over-quota tariff. The over-quota tariff will often make over-quota imports more expensive than domestic products. Croatia. but countries were able to establish Tariff-Rate Quotas (TRQs). Moldova. There are obvious advantages for Macedonia to pursue trade with its former mates in Yugoslavia. The free trade area amongst the CEFTA countries is to be in place by the end of December 2010. which allow in a given amount at a reduced tariff.CEFTA” or “CEFTA 2006” came into force 26 July 2007 for the first five member countries (Albania. 1 The CEFTA also calls for the abolition of export duties and for a “standstill” on customs duties.

One analyst observed a price increase for dairy products in the range of 20% (the UHT milk price from Serbia was 45 denars before. Croatia and Serbia. but now no more. Price increases of course can be considered to benefit Macedonian dairy and meat producers. Diagonal cumulation reinforces the mutual production links oriented toward supplying EU markets. Moldova and Serbia have increased sharply during the first 4 months of “New CEFTA. Diagonal cumulation is not practicable for products governed by TRQs. For those products subject to TRQs. now 55 denars).made up almost half of the bilateral trade recorded between Macedonia and Albania and Bosnia-Herzegovina (World Bank 2003). Prior to CEFTA 2006. there are no provisions for eventual elimination of either the quota or the over-quota tariff—these thus represent permanent exceptions to the CEFTA free trade area. ajvar and wine. which was not the case for the old CEFTA. Croatia. Macedonian table grapes can be exported to Bosnia and then reexported to the EU. Croatia. Three countries—Albania. including sausages. increased interaction between the countries. According to the Ministry of Economy. Tables A-11 through A-15 show the TRQs established by Macedonia on imports from Albania.” One important effect outside of the 5 AgBiz value chains has been the end of export subsidies by Serbia on meat and dairy products. Albania is a mixed story. as many key Macedonian products may enter duty-free. Montenegro. Bosnia-Herzegovina. Another positive aspect about the CEFTA 2006 is the opportunity for “diagonal cumulation” of products among CEFTA countries for the purposes of exporting to the EU. Serbia was using export subsidies on 70% of exports to Macedonia. Serbia and Kosovo all offer primarily dutyfree access for Macedonian goods under CEFTA. For example. All have zero tariffs for in-quota quantities. the indirect effects may already be having a positive impact on Macedonia’s exports. Moldova may be of less interest. and the possibilities for greater investment and interest in a particular sector. Several tangible benefits arise from Macedonia belonging to CEFTA 2006. the European Commission’s oversight of CEFTA 2006 ensures that the CEFTA countries will comply with the terms of the deal. While the direct effects related to changes in tariffs are relatively minimal—given the prior bilateral trade deals. since both are CEFTA countries. Croatia and Moldova—established TRQs on imports from Macedonia for certain key products. As a small country and not a traditional trading partner. Annex Tables A-1 through A-10 show the details of the concessions made on agricultural imports from Macedonia by its CEFTA partners. although Moldova has established TRQs for many products of interest to Macedonia. Membership in CEFTA is seen as an “ante-chamber” to the EU and 11 . Finally. but some are subject to 15% tariffs. greater respect for the terms of the trade agreement by the participating countries. including table grapes. Macedonian exports to Albania. Indirect effects relate to the improved institutional framework. Price increases were also noticed on meat products.

for tobacco. B. CEFTA does provide for each country to establish and operate a system of safeguards in case of “serious disruption” to domestic markets. countervailing duties and anti-dumping actions. As BosniaHerzegovina. if Serbia were to offer its farmers subsidies on inputs to vegetable production—while Macedonia did not. wine and lamb (known as systems A. while historical importers receive quota rights under B. For example. and implement and enforce the agreements. With CEFTA being a free trade area but not a customs union. Perhaps more importantly. products could enter there and be routed to Macedonia (in the past there was the case of tomato paste from China). but Article 23bis mentions protecting agricultural markets with safeguards (seen as a “black hole”). there is the risk that the tariff-rate quota administration practices in partner countries could limit Macedonian exports.participation in CEFTA provides evidence to the EU that CEFTA countries can negotiate the terms and conditions for free trade. Government officials should closely monitor import volumes on an ongoing basis should seek to apply safeguards if import surges occur. such as table grapes. For example. Montenegro). The danger is that while Macedonia’s seemingly transparent “first-come. The CEFTA treaty does not impose restrictions on agricultural policies. Croatia is using 3 different types of allocation methods. and C).2 Anytime there are TRQs in operation. and system C (all others) is either never utilized or unavailable. Only domestic producers receive quota import rights under system A. This means that if Serbia changes an external tariff. each country maintains its own external tariff policies for countries not belonging to CEFTA. first-served” practices for implementing 2 There are of course other ways to block or slow imports. The danger is that the trading partner will reciprocate. 12 . outside of those under the WTO. agricultural subsidies provided by those countries could negatively impact Macedonian farmers. The Macedonian government has established a commission to handle safeguard questions and a set of procedures for applying safeguards. then the subsidies could lead to increased Serbian production and lower export market share for Macedonia into the key Serbian market. While Macedonia is usually an exporter in these areas. Macedonia has set up zero tariffs for imports in every one of the 5 product areas of export interest. but generally this is the result of fraudulent activity. it is possible that imports coming from its CEFTA partners could pose challenges for domestic market sales. There are some risks from the new CEFTA. Montenegro and Serbia are not yet WTO members. Article 23 of CEFTA 2006 related to the use of WTO rules for safeguards should prevent arbitrary actions by non-WTO member countries (Serbia. Bosnia. The potential for increased competition on the Macedonian market is particularly heightened in a sector that is not well-organized. for example by establishing temporary phytosanitary inspections or by the inspection of truck safety or equipment safety.

595 110 Source: Macedonia’s State Statistical Office.370 1. Turkey is an important supplier of off-season fruits and vegetables to Macedonia.966 42.638 5.460 5.000 Dollars 9.365 9.356 972 4.624 15.808 1. the data show over $80 million worth of exports in the 5 value chains in 2007.492 3.178 16.555 9.460 674 3.004 74.535 57 828 9.245 5.832 18 237 116 17.638 12.003 594 3.326 5.244 5.049 24. Table 1: Macedonia’s Exports for Product Areas of Interest 2004 Tons tomatoes cucumbers fresh mushrooms sweet peppers frozen vegetables dried mushrooms table grapes sliced mushrooms ajvar bottled wine bulk wine wine dregs 2.138 4. with a customs union arrangement with the European Union.166 19.946 5.173 8.591 1.000 Dollars 14.722 130 38.615 164 1.408 5.TRQs exposes the domestic market.970 8.412 5. While these data are not comprehensive regarding each category.071 5. so the ending date of implementation is unclear.077 820 6. Macedonia-Turkey Free Trade Agreement While not neighboring countries.902 51.167 6. Table 1 shows the last four years of export figures for the product areas of interest within the 5 AgBiz value chains.879 15.974 3.181 114 30.595 18.236 2.142 367 2007 Tons 47.387 67 46. Turkey is a market of 71 million people with $9. Macedonian exporters (in particular for wine) may not be benefiting in return. slated to be phased-in over 10 years.753 59. With a slightly earlier growing season for grapes and fresh vegetables.054 32.000 Dollars 18.986 5.293 0 3.539 83.953 618 19.283 141 22.191 3.509 3.753 3.438 180 31. With more13 .391 1.918 27. The Turkey-Macedonia free trade protocol.783 252 9.250 602 1.060 2006 Tons 42.123 5.166 4. Macedonia and Turkey have long-standing trade links and the countries signed a deal on 7 September 1999 that came into effect on 1 November 2000.062 608 20.449 1.884 3.237 43 1. was amended in December 2003.712 8.400 per capita income.564 3.130 7.162 9.992 42 1.000 Dollars 23. Trade between Macedonia and Turkey is by road transport in sealed trucks via either Greece or Bulgaria.956 8.120 0 2005 Tons 36.

seeking to export fresh vegetables for industrial purposes and for fresh consumption. This opportunity could allow Macedonian bottlers and processors to diversify their source of supply away from the leading Croatian company (Vetropak). It designates the products. which is 102%. Turkey granted concessions on imports of fresh vegetables. The agreement allows in most Turkish industrial products to Macedonia and allows many Macedonian agricultural and food products into Turkey. As shown in Annex 2. Cultural and historical links between the two countries could be exploited to promote trade (the countries share some similar foods). mushrooms. All industrial products from Macedonia can be exported duty-free to Turkey. resulting in a rather-high 51% duty. with duties not to exceed 25%. It is noteworthy that Macedonia made no concessions on imports of fresh peppers from Turkey (Annex Table A-16). canned vegetables.3 Also in Annex 2 are the concessions granted by Macedonia for importation of agricultural products originating from Turkey. Turkey is the second-leading producer of table grapes in the world (AgMrc 2006). lentil. Macedonia will not assess customs duty on key inputs into the value chains for bottled wine (bottles) and processed vegetables (jars) from Turkey. The opportunities for Macedonian exports within the AgBiz value chains include red peppers in powder form. Turkey is a competitor with Macedonia in some export areas. It bears pointing out some “gaps” in the Annex showing Turkey’s concessions under the deal. Without the agreement. Turkey’s earlier harvest for peppers could offer Macedonian processors a chance to import peppers before the start of Macedonia’s domestic pepper harvest and ensure an extra month or two of processing activity. except for imports of Turkish beer at 50% duty for within-quota quantities. Macedonia could simply open up a TRQ for fresh peppers from Turkey. etc. beans. Is this an oversight? Some of them are also jumbled and out of numerical order. cotton. not to exceed five years. rice. a point that Macedonia’s trade negotiators should seek to clarify. fresh fruits. Turkey only offered to reduced its MFN rate by 50%. But it might be savvy to seek to negotiate 3 Some of the quota quantities and in-quota tariff rates for items are blank. Under the agreement. as well as the quantity of quotas. the within-quota tariff equals 0%.advanced technology on many Turkish farms.). For almost all of the products listed (chicken meat. 14 . For other products (frozen and dried vegetables. ajvar. soups. canned vegetables and sauces. At least one Macedonian company (Medium Export) is eager to penetrate the Turkish market. The Turkey FTA has provisions for temporary protection for infant industries. olives. dried grapes. albeit for unlimited quantities. canned fish. with zero-tariff on imports within quotas. bottles and jars would be assessed Macedonia’s MFN tariff of 50%. and wine. for example during the month of June before Macedonia’s main pepper harvest. Turkey’s concession on wine from Macedonia is for a 50% reduction of the MFN duty. The concessions granted by Macedonia do not include any products figuring amongst the 5 value chains.

dried fruit and vegetables. In return for establishing the TRQ for imports of fresh peppers into Macedonia.000 tons of wine. vinegar. fruit juices. sugar made of sugar beet. Ukraine has opened quotas for Macedonian products in 4 out of the 5 value chains supported by AgBiz (not table grapes). vinegar (Ministry of Agriculture 2005). jams and fruit jellies. There is also evidence that some wine is already being exported there under the ratherlarge TRQ opened by Ukraine (40 million liters of Macedonian wine—whether bottled or in bulk—may enter duty-free). each EFTA state has made a bilateral arrangement with Macedonia for concessions on trade in agricultural products. with Macedonian wine going north and Ukrainian wheat heading south. the Ministry of Economy reports the FTA with Ukraine to be in force since 15 July 2003 (Ministry of Economy 2007a). biscuits and waffles. chocolate. Macedonia trade data show 38 tons of fresh tomatoes to Ukraine. As with the CEFTA. Under the deal. chocolate. products made of sugar.000. peppers.900 per capita income to a wide range of agricultural products from Macedonia. for chilled and frozen beef. since the negotiators from the two countries had not met to finalize the TRQs and the tariffs to be applied on the bilateral trade. in terms of expanding Macedonia’s exports. barley. tobacco. milk and cream. Macedonia-Ukraine FTA Perhaps the most promising of the trade agreements signed in recent years. worth $18. 15 . hard liquors. One analyst also brought up the possibility of barter trade between Macedonia and Ukraine. jams. wheat. red powder pepper.something in return for improving Turkey’s access to Macedonia’s market. biscuits and waffles. mineral water. Annex 3 also contains the concessions granted by Macedonia for imports from Ukraine. is the FTA with Ukraine that opens a market of 46 million people with $6. The FTA with Ukraine was said by one person to not yet be operational. sauces. Ukraine has a different growing season than Macedonia and many complementary products. Ukraine opened up zero-duty quotas for chilled or frozen goat meat. Macedonia could negotiate a TRQ at 0% duty for say 1. canned fruit and vegetables. Annex 3 contains the concessions granted by Ukraine for importation of agricultural products originating from Macedonia. oilseeds. wine. However. frozen pork. Macedonia-EFTA Trade Agreement Macedonian exporters can find several interesting opportunities arising from the agreement between Macedonia and the 4 countries of the European Free Trade Agreement (EFTA). products made of sugar not containing cocoa.

5 francs/100 kg. Macedonia only opened a handful of quotas for imports from Switzerland—none in the 5 value chains. with only 0. More than half (53%) of Macedonia’s trade is with the EU. but in return Macedonia only represents 0.The four EFTA countries—Iceland. The EU has member countries with similar growing seasons as Macedonia. which is more than quadruple that of Croatia. Per-capita income $39. does not arrive anywhere near free trade in agricultural products.600 $39.54 million Source: CIA World Fact Book. The EFTA countries have far different growing seasons than Macedonia and many Macedonian products cannot be grown in EFTA countries.534 Under the Switzerland-Macedonia agreement. Switzerland is the largest market and has a customs union with Liechtenstein since 1923.400 $25. Switzerland’s top MFN rate for bottled wine is 50 francs/100 kg.931 Liechtenstein 34. The Macedonia-EFTA agreement.000 $55. Liechtenstein. It is safe 16 . a market of almost 500 million people with $28. authors’ calculations.213 per capita income. Given the highly subsidized nature of the EFTA countries’ agriculture. signed in 2000 and to be put in place over 10 years. Most foreign direct investment in the region comes from the EU.5 million people with $45.6% in 2006 (World Bank 2007).534 per capita income (Table 2). Norway and Switzerland.5% of total FDI coming from the other countries in the southeastern Europe region (OECD 2007).5 Swiss francs per 100 kg. Macedonian exports of bottled wine benefit from a reduced tariff rate equal to the Swiss MFN rate minus 17. There are many linkages with the European Union. comprise a market of 12. Table 2: Demographics of the EFTA-4 Population Iceland 301.1% of EU trade (Macedonian Business 2007). Macedonia’s FDI as a % of GDP was 5.6 million Switzerland 7. there are provisions for consultation before countervailing duty actions may be taken. meaning the duty on Macedonian wine would be 32. Croatia has a reduced tariff rate for wine into Switzerland (7.5 Swiss francs per 100 kg)—and the provision that the wine from Croatia must be wholly obtained would seem to exclude Macedonian wine being sent to Croatia for re-export to Switzerland. Macedonia’s Stabilization and Accession Agreement with the European Union The European Union now has 27 member countries.247 Norway 4. The base tariff is that applying on 1 January 2000. but also countries with complementary seasons or which cannot grow certain products.800 $45.6 million EFTA-4 12.

will remain in place until Macedonia joins the EU. Macedonia signed the Stabilization and Association Agreement with the European Union in 2001. which limits trade.000 354. Macedonia opened quotas for imports from the EU for 29 tariff lines. the EU continues to practice a system of reference prices that utilize a variable import levy to maintain a minimum import price for fruits and vegetables coming into the EU. --World Bank 2003. so the accession of Bulgaria and Romania prompted a slight increase in the wine TRQ. Table 3: Tariff-rate Quotas for Imports of Macedonian Wine into the EU 2006 TRQ Yearly Tariff rate Tariff rate for volumes (hectoliters) adjustments within quota above quota Sparkling wine HS 220410 and Wine in bottles HS220421 Bulk wine HS220429 37.500 +6. with a “cliff” in the final year (the tariff reduction for Macedonia is backloaded). competition. with the interesting mechanism for increasing the import quota for bottled wine each year while decreasing the quota for bulk wine. A separate wine protocol was signed in 2002. legislation and regulations of the countries to be in line with those in the EU so as to facilitate their future integration into the EU structures. are labeled 'potential candidates' for EU accession. on the other hand. These commitments extend beyond trade and cover matters pertaining to investment. the environment. The aim in all these is to bring the institutions. Table 3 shows the starting point from 2006 for Macedonian exports of wine to the EU. standards. Macedonia opened up a couple of different types of TRQs for EU imports. except Makedonski ajvar. For most EU agricultural product exports to Macedonia. to be phased in over 10 years. there will be a phase-out of tariffs by 2011. Macedonian agricultural products can enter the EU market duty-free except for tariff-rate quotas on wine. for fresh fruits and vegetables. Countries with SAAs.000 0% 0% Up to €32/hl Up to €32/hl While there are zero customs duties on other agricultural product imports from Macedonia into the EU. baby beef and fish (sardines). The SAA is re-negotiated each time the EU adds a new member state. 17 . etc. The EU does not initiate negotiations for an SAA unless the EU judges that the political conditions are met and the country would have the institutional capacity (with EU assistance) to implement its commitments under the agreement. and has been renegotiated since. As noted for countries throughout the region.000 -6. This system. This favorable trade regime vis-à-vis the EU will only last until EU accession.to say that the EU market already features every product available in Macedonia. The market access provisions of the SAA are asymmetrical in favor of Macedonia. but wine is the only product figuring in the 5 value chains focused on in this report. with the final tariff reductions scheduled for the beginning of 2011.

Macedonia has opened TRQs with zero-duty for in-quota imports for a range of EU products: beef and poultry offal, ham, milk, cream, butter, certain cheeses, oranges, mandarins, grapefruits and lemons, sausages and pâté, unrefined soybean oil, olives, juices and certain animal feeds. For a second category of TRQs (milk, certain cheeses, sausages and pâté, juices and certain animal feeds), the in-quota tariff rate is not zero, but rather 70% or 100% of MFN. Macedonia also opened a TRQ for wine imports from the EU (Table 4). There is no provision for the eventual elimination of tariffs on Macedonia’s imports of agricultural products from the EU for products with TRQs. Table 4: Tariff-rate Quotas for Imports of EU Wine into Macedonia
2006 TRQ Yearly Tariff rate Tariff rate for volumes (hectoliters) adjustments within quota above quota Sparkling wine HS 220410 And Wine in bottles HS220421 3,000 +300 0% 50%

These quantities were adjusted in the revision to the SAA.

As for tariff concessions, Macedonia opened immediate duty-free access in 18 agricultural tariff lines, but again none involve products from the 5 value chains. As for the list of products for which Macedonian tariffs will be progressively eliminated by 2011, there are several tariff lines for fresh and processed vegetables, including fresh mushrooms, fresh tomatoes, sweet corn, olives, as well as dried mushrooms, other dried vegetables, and jams and jellies. Tomato ketchup (HS210320) is one product where it can be expected that there will be a shock to the Macedonian market, with the tariff dismantling backloaded, such that in 2008, the Macedonian tariff is still 70% of the MFN rate. In January 2011, the Macedonian tariff on tomato ketchup will drop dramatically from the 2010 rate of 30% (50% of the MFN rate of 60%) to 0%. The Macedonian authorities should place tomato ketchup on a watchlist to ensure that retailers pass along this tariff reduction to endconsumers, rather than simply pocketing the difference themselves. The same applies for sweet corn, a product of interest to the EU, and peanut butter. Pre-accession is the “honeymoon” period for Macedonia, in terms of having excellent market access to the EU but without having to open its own market much. It is essential that Macedonia take advantage of the transition funds provided by the European Commission under the program known as the Instrument for Pre-Accession Assistance for Rural Development (IPARD). The IPARD funds require considerable expertise in filling out paperwork and often require considerable co-financing by the farmer. In theory, the EU funds are aimed at rural development aims rather than specifically at boosting agricultural production. The IPARD subsidies can boost the productivity of a qualifying farmer, but only about 30 percent of the EU’s pre-accession funding has been successfully distributed among the countries of Central and Eastern Europe eager to join the EU. Alongside the IPARD funds, Macedonia itself is in the process of greatly increasing its own agricultural sector subsidies: from €5 million in 2006 to €20 million in 2007, with 18

planned increases to €45 million in 2008, €70 million in 2009 and €100 million. A key challenge for Macedonia is to rally investment from the private sector to accompany the money from IPARD and the Macedonian government—and to fully access those available funds. Macedonia risks not being able to benefit from IPARD funds during the pre-accession period unless farmers become skilled at filling in the paperwork (role for FACE in training how to do it).

Macedonia’s EU Accession
With the Stabilization and Association Agreement coming into force in 2002, Macedonia was recognized as a potential candidate country by the EU. On 22 March 2004, Macedonia formally applied for EU membership, and in December 2005, the European Council granted Macedonia formal candidate status. But it might be several more years from now before accession is achieved. In a 2004 report by Macedonia’s Ministry of Agriculture, it is asserted that “Macedonian agriculture commences reforms for approximation to EU from an unfavourable starting position…Macedonia has developed a National strategy for European integration (following on from) Macedonia accession to the WTO (2003)…Agriculture has the vital role of a buffer of social problems in the period of large scale economic and societal changes…The emphasis of the agrarian policy reforms should be put on the transfer from a market-pricing to a structural policy and on the introduction of various forms of support for increasing of the profitability and competitiveness of the agriculture economies. With the Stabilization and Association Agreement (article 68), the Republic of Macedonia has taken on the obligations for approximation of its legislation to the acquis communautaire of the EU (Ministry of Agriculture 2004).” The “acquis communautaire” represents 80,000 pages of EU legislation that Macedonia will have to translate and transpose into national law. It is estimated that 60% of the work is related to agricultural markets. This is a substantial task for any country, but particularly for Macedonia given the small size of its bureaucracy. Macedonia would appear to be second in line (behind Croatia) to join the EU and achieving NATO membership would undoubtedly be helpful for Macedonia to achieve EU membership. It cannot be stressed enough how important it is for Macedonia to successfully implement its new campaign of agricultural-sector support and to take advantage of the availability of IPARD funds during the pre-accession period. As mentioned in the prior section, market access for Macedonian exports to the EU will not change substantially upon EU accession. The TRQs for Macedonian exports of wine, 19

baby beef and fish would no longer be in effect, as all Macedonian products could enter other EU markets duty-free and quota-free. In addition, the EU system of reference prices for imported fresh fruits and vegetables from outside the EU, which serves in effect as a tariff on imports, would no longer be applicable. On the other hand, upon EU accession, all EU products will be able to enter Macedonia’s market duty-free. As Macedonia’s present tariffs on EU imports are often 50%, the “big bang” of EU accession may have some strong effects—and some unforeseen effects. Amongst the 5 AgBiz value chains, EU accession can be expected to have the strongest impact on Macedonian producers of wine and processed vegetables (Box 2). In both sectors, Macedonian consumers will benefit from lower prices for EU products and a wider variety of available products than at present. But competition could be fierce from EU imports for supermarket sales in Macedonia of bottled wine and processed vegetables, as EU companies have sophisticated branding and market penetration strategies never before seen on Macedonia’s market.

Box 2: EU Accession—Prospects and Strategy
Bottled wine Rapid loss of market share in Macedonia (up to one third?). Need to co-opt the competitors. Table grapes Little change except for potentially higher Serbian duties. Will FDI drive out the local guys? Wild products Little change. Possible loss of supermarket sales (small). Fresh vegetables Potential loss of some supermarket sales in Macedonia. Macedonian eating habits for fresh vegetables may change. Processed vegetables Little change for exporters. Penetration of Macedonian market by bigger and stronger EU brands.

The timing of EU accession for Macedonia vis-à-vis important trading partners such as Croatia and Serbia could change the market access conditions for Macedonian exporters. If Croatia joins the EU before Macedonia, as some predict, then Macedonia’s access to Croatia’s market will in fact improve. Croatia’s import quota for wine from Macedonia would be folded into the EU import quota for wine from Macedonia and Croatia would have to abandon its restrictive tariff rate quota administration practices (at least in

20

More than two-thirds of the grapes grown in Macedonia go for wine production. as agricultural subsidies are capitalized into land values.000 tons. 21 . but this effect would be mitigated by Macedonia’s present high unemployment rate (close to 40%). Bottled Wine For a country with a tradition thousands of years long of tending grapevines. Average annual production of wine is considered to be just under a million hectoliters. Grape production in Macedonia is an extensive agriculture activity. if Macedonia joins the EU before Serbia.600 hectares irrigated. as well as Macedonia’s particular structure of agricultural production. Merlot. Another potential effect from EU accession could be a rise land prices in Macedonia. and became today’s Red Zinfandel. as occurred in new EU members such as Poland or Bulgaria. In return. As for imports from Serbia. there seems to be a rather casual approach to the growing of grapes in Macedonia. the most common are Smederevka. Demir Kapija). Macedonia’s Institute for Agriculture has 54 registered grape varieties. and Burgundy.000 hectares are under total grape production in Macedonia. About 28. with farmers’ own production of wine or grape brandy (rakija) still an important element in the sector. then Macedonia may find that its largest. would tend to increase the cost of labor in Macedonia. It is difficult to gauge at this point whether it might be a mild or a stronger effect. Negotino. and Belan. 4 Vranec is a grape native to Macedonia that was brought to the U. Outmigration. Rheine Riesling. it may be possible to preserve some of Macedonia’s traditional access into Serbia’s market as part of the negotiations surrounding Macedonia’s EU accession. EU accession will likely also have an effect on Macedonia’s labor market. The most famous production region is the Tikves area (Kavadarci. in re-negotiating its SAA with Macedonia due to Croatian accession to the EU. as Serbia would erect new tariff barriers against imports from Macedonia. Macedonia would erect its MFN tariff wall against imports from Croatia—although it is possible that the European Commission. so Serbian market access would not necessarily change. Zhilavka. The red varieties most used are Vranec. would seek to preserve some of Croatia’s traditional market access into Macedonia.theory). Among the white wine varieties. As mentioned in the hypothesis above regarding Croatia.4 Cabernet Sauvignon. About 70% of the total grape area is under wine varieties while 30% of the area is dedicated to varieties used for fresh table grape consumption. as the large number of smallholder properties could make land aggregation difficult to realize. Total grape output is about 220. Serbia already enjoys unfettered access into Macedonia’s market. If Macedonia joins the EU before Serbia. traditional market is lost by the wayside.S. especially in the central southern parts of the country. with grape yield of just under 8 tons per hectare. with about 3. including its agricultural labor force.

although their ability to cooperate on export marketing has so far not been proven. the Macedonian fine wine Export Group. Macedonia has adopted a law for wine. There are very few wholesalers of wine and alcoholic beverages leaving each winery to deal with both “onpremise” and “off-premise” domestic retail accounts. Amongst the biggest wineries. Slovenia. The bulk wine is sold to Germany. have contributed to improvement in the quality of wine produced during the last few years. the new technology in these wine production facilities. there are no foreign wines present. Exports of bulk wine also grew steadily.2 million in 2004 to $42. the export of bulk wine in tanker trucks is the traditional business model. Macedonia’s domestic wine consumption is considered to be relatively low by EU standards. Under the former Yugoslavia. However appropriate implementation of the law is still needed. approximated to the wine law of the EU. About 1. These emerging wineries are built and equipped following the standards of up-to-date technologies and methods of modern wine production. as well as the upgrading of the old wineries with new equipment. while a few bottles of wine from Spain. The wineries in Macedonia are believed to have some reserve capacity available for expansion of wine production. from $24.There are a handful of big wineries in Macedonia and many small wineries. This is an important step towards organization in the sector. France and Australia can be observed in the largest supermarket retailers in Skopje.6 million in 2007. confirmed by the increased demand for Macedonian wine by foreign buyers. and therefore to the legislative requirements of the WTO concerning wine. Although estimates vary. where it is bottled.000. The sales and distribution on the domestic Macedonian market is generally handled by each winery’s sales department dealing directly with the retailers. Croatia and Czech Republic are other typical outlets for Macedonian wine. some new wineries have emerged in the largest grape. Imports of bottled wine into Macedonia amounted to only $176. This price gap is undoubtedly due in part to the 50% customs duty and to the relatively small size of the duty-free quota for the import of EU wine into Macedonia. In smaller supermarkets. bulk wine was exported to Slovenia and Serbia and bottled there.200 people are employed by the wineries.000 in 2007 while bulk wine imports amounted to only $122. In an earlier section of this report. In the past few years. A group of 6 wineries have formed a wine cluster. Table 1 shows that Macedonia’s exports of bottled wine grew from $9 million in 2004 to nearly $17 million in 2007.producing areas of the country. at prices to consumers more than double the most-expensive Macedonian wines on the shelves. Greece and Germany are traditional suppliers. One study attributed Macedonia’s consumers with “a low degree of demand sophistication” (Harvard Business School 2006). often under supermarket private brand labels. Generally. 22 .

5 Swiss francs/100kg francs/100kg 1 Norway (EFTA) Unlimited 0% 0% With EU accession Unlimited 0% 0% 1 2 In effect. Turkey made a concession on imports of bottled wine from Macedonia. but Norway’s state control over alcohol sales are believed to pose a formidable non-tariff barrier. but the duty is still 4 times higher than the concession granted by Switzerland to Croatia. opened rather-large quotas for Macedonian wine (40 million liters. imported from a company in Croatia. Ukraine. Macedonian wine still faces a hefty 51% customs tariff. Montenegro and Serbia.Opportunities Macedonia’s recent trade agreements have opened up a number of interesting opportunities for exporting bottled wine. Table 5: Market Access for Macedonian Bottled Wine Exports Quota volume Duty within quota Over-quota duty Croatia (CEFTA) 4. For unlimited quantities of bottled wine. Croatia opened a quota for bottled wine from Macedonia. on the other hand. Under the agreement with EFTA.5 Swiss 32. but problems with quota administration there appear to be hampering exports. but since the MFN rate is 102%. The CEFTA 2006 ensures zero-duty access to Bosnia. Kosovo. Norway offers duty-free and quota-free access for Macedonian wine. but it is unlikely that much will be exported unless the access is improved. 23 .000 liters). CEFTA also ensures that Macedonian bottlers of wine can have duty-free access to an important input—glass bottles (HS701090). Base volume for bottled wine and sparkling wine in 2006. As always. Turkey agreed to cut its MFN rate in half. Imports within the quota can enter Ukraine at zero duty. Switzerland made a tariff concession on wine imports from Macedonia. which could be a real opportunity indeed. Frequent adjustments. Under the Macedonia-Turkey FTA.000 tons 0% 21% Ukraine 40 million liters 0% 0% Turkey Unlimited1 51% 51% 2 SAA (EU) 37 million liters 0% Up to 32 Euros per hl 1 Switzerland (EFTA) Unlimited 32. whether bulk or bottled) and for rakija (HS220890—100. an unlimited quota volume means no quantitative restriction is in effect. there is a difference between the opening up of “market access” and actual “market entry” or export sales.

Macedonia’s SAA with the EU opened quotas for bottled wine and bulk wine from Macedonia. then upon Macedonia’s EU accession. The transformation from a bulk wine exporter to a bottled wine exporter has been called “the major strategic challenge for the cluster” as often the grapes are delivered to the wineries in Macedonia the day after they have been picked (Harvard Business School 2006). Another danger is that Macedonian wineries will not capitalize on the present period prior to accession to upgrade the rootstock and handling practices of their suppliers and to agree on effective quality standards and a common logo and slogan for the whole industry to use. similar to Norway. Macedonian wine will have free access to the Croatian market. with a mechanism for the bulk wine quota to decrease over time and the bottled wine quota to increase. Macedonia’s wine industry is nicely protected from much outside competition by a 50% customs tariff. EU wines can compete both on price and quality. perhaps accounting for even one-third of total consumption. While there is no panicking necessary. Wineries are afraid to cooperate because of this. The danger exists that Macedonia will become known for poor-quality wine instead of good-quality wine. The wine quotas are re-examined each year and have been increased successively as new countries join the EU. Threats Macedonia’s wine industry faces a number of tangible threats in the next few years. 24 . as well offering a wide range of tastes for the end-consumer to try. but others will be due to Macedonia’s sudden exposure to a highly competitive and rapidly evolving global industry. Some of these threats can be attributed to the rather casual nature of the local industry referred to before.As shown in Table 3 in a prior section. As a main source of supply to other downstream elements of the wine industry in the exYugoslavia. the wide range of EU wines will suddenly become available to be imported into Macedonia duty-free and quota-free. Furthermore. Macedonian wine will no longer face quotas for entry into the EU market. Wine exports to Sweden. With EU accession. Upon EU accession. it is inevitable that some wine and probably even a great deal of EU wine will come onto the Macedonian market. if Croatia joins the EU prior to Macedonia. For now. are hampered by the existence of state monopoly on alcohol. Wine exported within the quota can enter the EU market duty-free. This renders it very difficult to ensure standard taste and quality in every bottle of fine wine. Macedonia achieved a reputation for supplying good-quality wine in bulk. but it is more than anything an additional reason for them to cooperate.

The WTO has recognized 8 different types of TRQ management. 1) Macedonian wineries should attempt to benefit from the inevitable imports of EU wine by importing EU wine themselves and selling it to the Macedonian retailers (before someone else does). US) to come visit.With EU accession.6 4) Macedonia’s trade negotiators have made an unsuccessful démarche towards Croatia. French exporters seem able to sell their wines at only a few Euros per bottle. well below the price of quality Macedonian wines in Macedonia. Bulgaria. The wine industry should prepare information to help the government to try again. but would now apply the EU common external tariff. many of which are sufficiently restrictive that the TRQ is unusable or worthless. then Macedonia’s duty rate on glass bottles will increase from 0% to 5%. and Argentina. then it is possible that Macedonia’s bulk wine sales to Serbia would then face Serbia’s MFN tariff. Exporters can contribute information to this common database based on their personal experiences and Government should make regular démarches towards the countries concerned in an effort to convince them to change their TRQ management practices in order to permit exports from Macedonia to enter more easily. the real threats internationally in bottled wine come from Chile. 2) Some wineries have observed that most of their new sales come when foreign buyers visit the vineyards in Macedonia. and upon EU accession Macedonia would cease to apply its own tariff on these imports. Recommendations A number of recommendations emerge from analysis of the bottled wine sector in order for Macedonia to take advantage of the recent trade agreements. If Croatia joins the EU before Macedonia. 6 Government and exporters should maintain a common database on the practices of each of its trading partners in terms of TRQ management. Therefore. the manner in which the quota import rights are allocated.5 If Macedonia joins the EU before Serbia. would have unlimited access to Macedonia’s market. 5 Macedonia’s importers of glass bottles and glass jars have experienced difficulty in recuperating duty drawback and VAT when those bottles and jars are subsequently re-exported with bottled wine or processed vegetables. 3) “Someone” (Macedonia’s government or a wine exporter association) should monitor the fill rates of the wine quotas and send regular updates so exporters can target unfilled quota volumes. asking the authorities there to improve their quota administration practices in order to let in Macedonian wine. AgBiz could invite foreign buyers from target markets (UK. On the bright side. which could be as much or higher. Australia. which is considered to be strong in bottled wine. 25 . as occurred with the import of corks and foil caps from Bulgaria upon EU membership. in other words.

As noted in the section on bottled wine. Some examples of slogans might be: --“Wine from the Land of Alexander” --“Thousands of Years’ Experience Making Wine” --“Try Vranec and You Will Know Original Zin” --“Traminec—Better than the White Wine You Usually Drink. grape harvesters have not yet adopted differentiated practices for the harvesting of table grapes as opposed to wine grapes. In many regions of Macedonia. but diagonal cumulation would not apply. Most of the table grapes grown in Macedonia are not produced. 8) Continue to build the link between Macedonian wine and the tourism and food industries.5) Macedonia’s wineries “must also build sustainable models for contract supply of grapes including the management of supplier’s vineyards for grape quality (World Bank 2006). The grape producers generally belong to the Federation of Farmers of Macedonia as well as local. about 28. The Macedonian wine industry should request Macedonia’s trade negotiators to convince Turkey to offer Macedonian wine similar access conditions as that for Bosnian wine. 7) Bosnian wine can enter Turkey duty-free.7 There are reports of some pioneer moves by the farm association AS Vitis in this regard in Negotino in the heart of the Tikves region. 6) An EFTA wine initiative. there are still empty fields that have great potential to be used for grape production. One estimate is that 15. 7 Global GAP standards were known as EUREPGAP until the beginning of 2008. regional associations. harvested. handled. Macedonia’s wine exporters should make a sales trip to Norway to investigate how to sell there despite the system of state control. perhaps as much as an additional 7. Given the widespread practice of home-brewing of wine. 26 .000 seasonal workers participate in the harvesting of the grapes each year (Harvard Business School 2006).000 hectares.000 hectares are devoted to grapes overall.” Table Grapes Macedonia’s table grapes sector is a fascinating mix of potential growth and potential catastrophe. Roughly 20. 9) Macedonia’s wine cluster should seek to agree on a national mark and a slogan for Macedonian wine marketing abroad. The wine industry should request Macedonia’s trade negotiators to convince Switzerland to offer Macedonian wine similar access conditions as that for Croatian wine. packed and shipped according to the Global GAP standards necessary for sale to largescale supermarkets in the EU.000 farmers are actively involved in grape production (including for wine).

due to differences in handling and packing requirements.778 Romania 113 $22. and receive the full amount of the co-financed grant.220. Imported fertilizers and pesticides are preferred. Accessing the IPARD funds requires rather stringent attention to detail in terms of the need for sound business plans and in filling out the paperwork. it is believed that IPARD funds can be used to replace vines or to provide drip irrigation. Not all destinations shown. There is a particularly daunting aspect about IPARD. The Ministry of Agriculture’s seeds certification Board regulates the import of new vinestock. Macedonia’s table grape exports grew from $5. 1 Macedonia’s data set has not yet separated out Serbia from Montenegro. Distribution of other agriculture inputs is also organized through small local shops.4 $920 Source: Macedonia’s State Statistical Office. The season in Macedonia is end of June until September. Macedonia’s table grapes are shipped to the Belgrade green market in bulk in 10-kg wooden crates. 27 . as one university professor explained to us. each producer must meet national standards.314 Bosnia-Herzegovina 316 $83.4 million in 2007. grape juice or dried grapes (raisins).247 Sweden 31 $10. Inputs into grape production are provided in part by Macedonia’s Institute of Agriculture. In order to complete the process of using IPARD funds. The biggest market for table grapes is Serbia (Table 6). for table grapes. since domestic ones have variable quality. canned products. The IPARD funds provided during the pre-accession period by the EU can be used for the refurbishing of agricultural structures.714 Albania 156 $85. It is said that the taste of the Macedonian table grape is appreciated in Serbia.1 million in 2004 to $15.297 Slovenia 1. New varieties must undergo testing before they are included on the list of seeds that can be imported. For example.Prices for fresh-market table grapes are typically higher than those for grapes used for processing into wine. Referring to Table 1 in an earlier section. Table 6: Macedonia’s Exports of Table Grapes in 2007. each producer receiving IPARD support must end up meeting the EU standards. Macedonian table grapes tend to be on the market earlier than those grown in Serbia.471 Croatia 561 $17. For producers to apply for IPARD funds.496 $2.472 Russia 53 $24. while all others are imported. Much of the high production costs are attributable to a significant dependence on manual labor (AgMRC 2006). By Destination Destination Volume (tons) Value ($) 1 Serbia-Montenegro 8. The table grapes sector is the value chain most sorely needing a healthy share of IPARD funds to be disbursed in its direction. in the name of rural development. although some grapes are available in November too.

One trader reported that he was required to pay Serbia’s seasonal levy (prelevman) on shipments from the 2007 harvest. Macedonian table grapes can enter the EU market duty-free and quota-free. There have been numerous reports that Macedonian table grapes (and peaches) have been exported to Serbia.A major weakness of the sector is that 80% to 90% of Macedonia’s table grapes have seeds in them. although this should not be required under the CEFTA. table grapes exported from Serbia can enter Russia duty-free. Kosovo. Traders exporting table grapes are often not paying farmers on time and might take up to a year to pay them. they are either posing as Serbian-nationality table grapes. which has fast become the international standard over the past 15 years. No new opportunities arise from the FTAs signed by Macedonia with either Turkey or Ukraine. Albania lowered its MFN tariff on table grapes from Macedonia to 10%. Both of those non-EU markets likely require Global GAP certification for sales in supermarket chains. it is sometimes possible for foreign buyers from Serbia to come and pay cash for the table grapes to take back to Serbia. Only a couple of Macedonian companies have seedless table grapes to export. Another difficulty. Under the Macedonia-EFTA agreement. they may not be sold in large-scale chain supermarkets. The diagonal cumulation possible under CEFTA for exports to the EU most likely does not apply under the Serbia-Russia. Under Macedonia’s SAA with the EU. or the Russian authorities are turning a blind eye. Access to Serbia’s market under CEFTA has opened up another somewhat unusual opportunity. The non-Global GAP grapes from Macedonia can be sold in many of the 28 . Norway offers duty-free access for table grapes from Macedonia. but sometimes do not honor the agreement. This can result in a lack of available supply for Macedonian traders. Iceland also offers duty-free access. so if Macedonian table grapes are entering Russia duty-free via Serbia. Croatia. Table grapes were the only one of the 5 AgBiz value chains for which a quota was not opened by Ukraine. and then re-exported duty-free to Russia. Farmers harvesting table grapes may have an unwritten “contract” with the trader to provide them with a set quantity at a set price. observed in some of the other AgBiz value chains as well. Montenegro and Serbia. These are Macedonia’s traditional export markets from the former Yugoslavia. While Macedonian table grapes not meeting the Global GAP standards may still enter the EU market. Given the price fluctuations normally observed during harvest time. Opportunities The CEFTA 2006 offers duty-free access for Macedonian table grape exports to BosniaHerzegovia. Macedonian exports to Russia normally face a 20% duty. Also under CEFTA. is the lack of professionalization of the sector. Because Serbia has an FTA with Russia.

Success in this area will depend on the existence of financial incentives for both sides to abide by the contracts they sign. Upon EU accession. Upon EU accession. Poor compliance with contracts by both farmers and traders is a major impediment to expanding exports and results in foreign buyers coming to Macedonia to buy their grapes. Croatia). table grapes in consumer-ready packs would be able to enter Macedonia’s domestic market freely. there is a real risk of losing key export markets (Serbia. Serbia will erect new barriers to imports from Macedonia (further reinforcing the potential loss of a key market). with removal of the 50% MFN duty. Another threat will arise if Macedonia joins the EU before Serbia.EU countries’ open-air markets or in small-scale. Threats The threats to Macedonia’s table grape industry arising from the recent trade agreements are not insurmountable. In that case. Macedonian traders should seek to develop the necessary packaging and handling techniques for supermarkets sales in the home market as an experiment in increasing the quality and value-added for Macedonian table grapes for export. such as quality premiums. pre-harvest 29 . But these problems will get worse the longer they are unattended to. Many of the threats are exacerbated by the laidback attitude of Macedonia’s vine-growing culture. there is a real threat of the loss of supermarket sales of table grapes within Macedonia (although this is small for now). A widening gulf is likely to emerge between those companies that are serious about undertaking what is necessary in order to hold onto existing export markets and to penetrate new markets and those that remain at the present level. however. Macedonian traders could also lose those markets if they do not improve selection and handling. Without the ability to export seedless varieties. 11) Adopt a code of good business practice for the sector and have the traders and farmers sign on. given the large number of smallholders. Traders should end the practice of hiding poor-quality grapes under good-quality grapes in shipments. If Macedonian producers do not invest in new vines and seedless varieties. In return. Greater professionalization of the sector. there is probably little threat of losing green market sales in Macedonia. access for Macedonian table grapes to the EU market would not necessarily change. On the other hand. there is a risk that foreign investors will come and beat them to it. Recommendations 10) Improve quality control in post-harvest and shipping. will not be easy. mom-and-pop grocery stores choosing not to apply the Global GAP standards. but they are formidable.

except for the field collectors. type of varieties used. The first-level consolidator is the village shop who will sell to the second-level consolidator who goes around from village to village. 13) Traders should obtain a certificate of origin in order to avoid seasonal levy (prelevman) for exporting to Serbia. 15) Study costs and benefits of adopting retail packaging (plastic bags for supermarkets). the California Table Grape Association) to visit Macedonia as a way to initiate business links and stimulate needed investment in the sector.finance. including fresh. or special access to investment funding from the Government of Macedonia. For mushrooms. who may barter for other items or services. including roasted wild mushroom products. insist that the European Commission negotiate dutyfree access for Macedonian table grapes into Serbia. Macedonia. Wild Harvested Products The collection of mushrooms. physical infrastructure. 12) Provide technical assistance to help companies and farmers to access IPARD funds. preserved and dried mushrooms. along with Bulgaria. frozen wild blueberries. dried juniper berries. the registration of farmers and documenting of their assets and practices (such as under a grapes cadastre) could provide information on the types of grape farms. One of Macedonia’s competitors is a registered business in Bulgaria with a large capacity for collecting and exporting. Porcini mushrooms are the most common wild mushroom variety exported. was a major exporter of wild mushrooms in the former Yugoslav times. While this recommendation could be acted upon in a number of different manners. and primary needs. Penalties in case of non-compliance can be envisioned as well. but it is believed that the industry has shrunken since then. Trade data is particularly difficult to find for this sector as products that are “wild” and products that are harvested are often grouped together. frozen. Most of the wild mushrooms 30 . Macedonia exported about $4 million in mushrooms in 2007. there are two harvest periods of 15 days each. and herbs for medicinal purposes and for teas. berries and medicinal herbs growing in the wild in Macedonia’s mountains has been traditionally practiced for hundreds or even thousands of years. Macedonia’s main exports in this sector include frozen. cut or dried wild mushrooms. but the share for wild mushrooms is not clear. 16) In the run-up to EU accession. 14) Invite one or more table grape associations from elsewhere (for example. Mushroom collecting is a cash business. A widespread effort is needed to introduce Global GAP standards and to ensure traceability.

yarrow (Achilea millefolium). nettle (Urtica dioica). Nearly all Macedonian exports of juniper berries go to Germany. mint (Mentha piperita). for example). gels and drops). hibiscus(Hibisci flos). has a special department called Herba working on natural products: herbal teas and essential oils (for their own purposes. that had permanent buy-out points in some villages. Chamomile exports are about 50 tons per year and exports of marshmallow root (Althaeae radix) are around 25 tons per year. and Konimex (KORO) in the western part of Macedonia. Macedonia was of great interest to pharmaceutical companies outside of Macedonia (Lek. hawthorn (Crataegus oxyacantha). which permits them to be sold throughout the winter. Macedonia exports between 250 and 500 tons of oak moss (Lichen Quercus) to the fragrance industry for the manufacture of oak moss absolute through solvent extraction. Delcevo in the eastern part of Macedonia. As part of the exYugoslavia.go to Italy for use by chefs and caterers. 31 . then looks into the history of dumpsites. and records of the management group. Ljubljana. For juniper berries. John's wort (Hypericum perforatum). Organic wild products need separate storage from cultivated products. As for teas. the Netherlands and is ISO 9001 approved. who do their own sifting and use the lowest grade for distilling. Most juniper berry buyers are Italian or German. It is not clear what share of this is represented by wild harvested products. The herbal teas are either standard (for the Macedonian market) or organic (for export). Alkaloid. The certifying body defines the collection area (a mountain or half a mountain. Macedonia exports a range of products. rosehips (Rosa canina). horsetail (Aesculus hyppocastanum).). Belgrade). juniper berry (Junuperus communis). It is believed that the export value of tinctures. besides Alkaloid. as well as for creams. Other products are essential oils (produced by Konimex) from 8 Organic certification is believed to be easier with wild products than for cultivated products. thyme (Thymus serpylllum). oak moss (Lichen quercus). Alkaloid has an organic production certificate from SKAL. Portoroz and ICN Galenika. soil analysis. As for herbs and spices. elder (Sambucus nigra). The main products are: chamomile (Matricaria camomilla). three or four types produced in Macedonia have been organically certified. and the collectors must be trained in organic techniques. In Macedonia. Droga. The largest pharmaceutical company in Macedonia. potentially for re-export to the EU. St. oregano (Origanum vulgare). parsley (Ptroselinum crispum). There is no requirement for a transition period. Macedonia’s harvest is in September and October and the collectors of aggregators undertake drying of the berries. linden (Tilia sp. Zagreb. sometimes in combined shipments with juniper berries from Serbia and Albania. essential oils and finished herbal teas amounts to approximately $10 million. about 80% of the harvest is of good quality and goes for spices. there are two other processors of medical herbs: Kastel.8 In terms of raw medicinal herbs. Some wild mushrooms also are exported to Serbia and Bosnia. Pliva. Today. sage (Salvia officinalis). The products are sold in bulk (mainly for export) and as tea (both to the domestic and regional market). Only about 20% of the harvest is the lowest quality suitable for distilling.

The collectors and processors are united in the Association of Non-Timber Forest Products. The Swiss development assistance SIPPO is also working on wild products. then to the EU market. Under the Macedonia-EFTA deal. as well as herbs for tea. Under the FTA with Turkey. Macedonian wild harvested products can be exported first to another CEFTA country. but still in insignificant quantities. They are seasonal workers. This reinforces the notion that the sector’s problems are internal. including wild mushrooms. The vast majority of herbal teas are sold on the local market and face strong competition from Slovenian and EU-made products. The collectors come from the hilly areas considered as undeveloped municipalities by the Government of Macedonia. For frozen wild blueberries. Kosovo. as well as spices and vinegars in combination with different herbs. More critical is having the connections to buyers and capturing as much of the end-user price as possible.combinations of herbs and juniper berries. and roughly 200.000 families that engage in collecting herbs and other non-timber forest products (juniper berries. Opportunities Trade barriers are usually not so important in exporting wild harvested products. a zero-duty quota was opened for dried vegetables from Macedonia. Switzerland offered tariff concessions on several fruits but not on fresh wild blueberries (HS0810400024). operated by the processors. Moldova offered no better access for Macedonian mushroom products (including wild mushrooms) than its 15% MFN rate. With CEFTA’s diagonal cumulation. including dried wild mushrooms. The essential oils and some of the vinegars have already reached some of the EU markets. frozen wild blueberries (HS0811902024) or dried wild blueberries (0813402010). Ukraine also opened a quota for imports from Macedonia of dried vegetables. Albania reduced its MFN rate to 10% for mushrooms coming from Macedonia. the primary Macedonian export product. There are around 50. The Association has limited know-how in technical expertise and almost no human resources to oversee and manage the sector.000 people who gain additional income from this activity. but have reportedly only had one meeting so far. The collected herbs are sold at the buy-out points in the villages. 32 . rather than external. Under CEFTA. The collectors are mainly unemployed individuals. wild berries). The CEFTA 2006 ensures duty-free access for all of Macedonia’s wild harvested products into Bosnia. mushrooms. Montenegro and Serbia. the Swiss MFN is up to 4 Swiss francs/100kg. or whole families from the hilly areas in Macedonia.

The combination of the characteristics “wild” and “organic” has the potential to be a devastatingly attractive marketing tool. The sector should seek to establish some price competition among buyers. including herbs and spices and wild mushrooms. Macedonians are missing out by not targeting these logical outlets for their raw material. juniper berries (HS090950) typically enjoy duty-free access into most countries.Even without a trade agreement. Collection is seasonal. One “risk” is that the sector may not be able to grow very much. for example through the centralizing of sales information. the supermarket chains in Macedonia will develop product lines in fancy foods. those in the sector will need to be clever and daring. Recommendations 17) Macedonian collectors of wild harvested products of all types should seek to maximize their market power by developing a central point for sales. such as the US and the EU. External marketing strategies should seek to “cut out the middleman” and develop direct links with end-users. Threats There are few risks from the recent trade agreements for those involved in this sector.5 Swiss francs per 100kg). Juniper berries are the main ingredient in ginever (the Dutch national drink) and in gin. but not Switzerland (the MFN is 2. 33 . which would be a shame. so efforts at improving market organization and export strategy could pay off. With a short collection season. This means that even if the price of wild mushrooms for offer by Macedonian collectors (or exporters) were to rise. there is plenty of time for marketing activities. demand would remain stable. those retail-level wild harvested products will come from EU countries or elsewhere. On the other hand. In order to do so. This logic assumes that Macedonia’s collectors and aggregators are using proper post-harvest handling techniques. so the lack of coolers tends to shorten the shelf-life of fresh wild mushrooms and lower the quality of dried products. with attractive consumer packaging. demand for which can be assumed to be largely priceinelastic. therefore there is no hurry to sell. Eventually. Unless the Macedonian industry is pro-active in penetrating their own market. Norway offers duty-free access for imports from Macedonia of dried wild mushrooms and wild blueberries. in an effort to raise the value of the products. with a single sales agent who could command the best prices. Another risk is that Macedonian collectors are not utilizing their market power to the fullest extent for wild mushrooms. but demand is year-round. Mushrooms need to be cooled as soon as possible after the harvest. in terms of volumes for export or in terms of value-added.

AgBiz could explore how to bring the necessary trained pigs (or dogs) from Serbia and help develop the market linkages. but also for the US market. Albania is another exporter of wild mushrooms to Italy. where a moderate continental climate is present. one of the internal bottlenecks for the sector. This may require studying the seasonality and supply patterns of Switzerland’s own wild harvested sector. or the contact information for individual chefs. Gordon’s) or ginever (Bols) would be natural outlets for direct sales of juniper berries from Macedonia. beans. and launch direct marketing to them.18) For wild mushrooms. 24) Another idea is to ask Macedonia’s trade negotiators to seek improved market access for wild harvested products into Switzerland. leek. cutting out the middleman would mean taking the sifted and sorted dried berries to Germany and selling them there. 21) Several opportunities were opened under the recent trade agreements for exports of truffles. 23) In addition to frozen wild blueberries. garlic. Macedonia could negotiate a tariff reduction (at present 10% for Macedonian exports under CEFTA) and seek to bring Macedonian wild mushrooms into Albania for sale to the Italian company to benefit from CEFTA’s diagonal cumulation. The most significant products are tomatoes. Gevgelija). could potentially be addressed through either the IPARD funds or Macedonia’s agricultural budget. the marketing agent could find the association of EU gourmet chefs. primarily for the Italian market. it may be possible to develop dried blueberries. and also in Kumanovo and Skopje. cabbage. characterized by a modified Mediterranean climate. 20) Another potential export market for wild mushrooms is Albania. Distillers of gin (Tanqueray. These are traditional crops for Macedonia. Fresh Vegetables The major vegetable production regions in Macedonia are located in the south of the country (Strumica. a single sales agent in Macedonia could help organize the structure of sales. onions. blueberry powder (as a flavoring for foods) or blueberry brandy. although the sector would need to be pro-active in adapting their methods meeting the specific buyer requirements. closer to the point of demand. green 34 . peppers. 19) The wild mushroom sector would benefit from having a sales agent based in Italy. an extremely high-value product that would open up the French market to Macedonian exporters. melons and watermelons as well as cucumbers and root plants such as potatoes. The sector should solicit an analysis of the costs and benefits of custom packaging for wild mushrooms. Using the Internet. As mentioned in the paragraph above. 22) For juniper berries. rather than having buyers come to Macedonia and play off one local collector or aggregator against another. cooling facilities. with an Italian company sourcing its product there. along with other garden vegetables such as potatoes.

often not exceeding a hectare of land per farmer. peppers and potatoes. under plastic tunnels or glasshouse production. a farmer will grow a combination of fruits. lettuce. only a small percentage of which is irrigated. Organized wholesale markets do not have sorting. in combination with a large number of small producers. Regarding the inputs in vegetable production. necessary to fulfill the particular marketing requirements. Recently. Macedonia’s fresh vegetable industry suffers from factors like inadequate government support. For most of crops. Bulgaria and Greece. Vegetable and fruit production in Macedonia. Recently. while sprinkler and drip irrigation is more often found in protected vegetable production. Typically. The fragmented nature of these domestic markets. Serbia and Montenegro. quantity. and livestock.e. Macedonian farmers have successfully adapted to the need to maintain the standards and procedures under Global GAP (formerly known as EUREPGAP) required for large-scale supermarket sales in EU markets. agricultural producers have introduced new types of non-traditional vegetables. eggplant and others. in terms of production area. The most important vegetable crops in Macedonia. asparagus and others. 35 . large amounts of imported or produced by domestic growers are accepted. Only a limited amount of the required vegetable seed material is produced locally. string beans. At the wholesale markets. i. The fertilizer applied is mainly of Macedonian origin. the wholesale markets assumed an increasingly important role in the distribution of the produce. including fodder production. lack of sorting and grading expertise. A large portion of produce is retailed to the so-called Green Markets. In recent years. while the plant protection materials are imported. The most profitable vegetables for the farmers are those that can be picked early and brought to the market when there is the biggest demand for them. like broccoli. and thus distributed to the end consumers. Chinese cabbage. are key factors contributing to the current situation where Macedonia is losing its competitiveness. lack of storage and cooling facilities. There are about 52. Furrow irrigation is used on open field activities. cereals. The average farm size in Macedonia is 2. inadequate packing. Israel. temporarily stored and prepared for further sale. vegetables. cauliflower.5 ha. Brussels sprouts. classification and packing facilities at their disposal. is characterized by very small production plots. value and marketing prospects are tomatoes. in particular in the individual farmers sector. the seed material cultivated in open-field operations and in greenhouses is usually imported from Holland.peas. Vegetables are marketed at the wholesale or retail markets. producers normally cultivate seedlings which are afterwards planted on the field.000 hectares devoted to vegetables. The adoption of marketing strategies through the introduction of new regulations in line with the EU standards is necessary for the strengthening of these facilities.

Nevertheless. Croatia. Slovenia. “Macedonian supply has not yet adapted to the changing requirements in formerly important trading partners like Croatia and Slovenia. grading and freshness (World Bank 2006). packaging and transporting the fresh produce. Most of the wholesalers trade in the whole range of available produce. Opportunities The recent trade agreements open up considerable opportunities for Macedonian exporters of fresh vegetables. Poland. but direct sales on the green market rather than for sale through supermarkets. The export of fresh vegetables is mainly organized by domestic and foreign wholesalers or traders. fresh cucumbers and fresh peppers from 2004 through 2007. Other markets of some relevance are the Czech Republic. Trade in vegetables focuses on the 5 main products grown in Macedonia: tomatoes. the Baltic countries. watermelons and cucumbers. Kosovo has long been a good market for fruits and vegetables from Macedonia. These four fresh vegetables accounted for over $38 million in exports in 2007. in particular to Serbia and Montenegro. carrots and beetroot are also traded. Under the new CEFTA. Macedonian exporters have duty36 . Macedonia also exports fresh vegetables. cabbage. especially tomatoes. This is due to inadequate selection of varieties and lack of appropriate post-harvest activities. and Bosnia. About 70 % of Macedonian vegetables exports are going to the markets in the Balkan region. where fresh vegetable products imported from Italy. potatoes. Produce is mainly sold to fresh vegetable markets. Export to the EU involves attaining high quality requirements for grading. The most attractive products are early-season vegetables due to the attractive prices that can be achieved both in the export and the domestic markets.” In addition to selling to the green markets in the former CEFTA countries. the last decade has shown an increase in the volume of output. Spain and Turkey are preferred by traders because of better packaging. onions. Depending on the region. Value-added in the post-harvest activities simply vanishes as a result of lack of patience or knowledge of farmers.For some crops. Russia. Sweden and Greece. Slovakia. the need for large quantities of standardized early-season vegetables and fruits in EU markets represents a good opportunity for Macedonia to increase the export of fresh vegetables in the future. sorting. The main markets for fresh produce are Serbia and Montenegro. Table 1 in a prior section shows steadily rising exports by Macedonia of fresh tomatoes. but not an increase in net income. to Slovenia for sale in that country’s Mercator supermarkets and to Serbia for the Delta supermarket chain. peppers. Over the same period. The advantage that the country has in trade competition is that the Macedonian season starts at least one month earlier than in most neighboring countries. exports of fresh mushrooms have been falling.

200 tons) and peppers (3. but it is a duty-free quota for 5. with zero-duty for imports within the quota. Montenegro and Serbia. in order to find the right market niche. opened quotas for tomatoes. Albania established quotas for imports from Macedonia of tomatoes and cucumbers. The Croatian market is more-protected. cucumbers (1. The Macedonia-EFTA agreement provides for unlimited zero-duty imports from Macedonia into Switzerland of a range of fresh vegetables.500 tons). but these are relatively small (150 tons and 100 tons respectively. Turkey opened quotas for imports from Macedonia of fresh tomatoes. tomatoes (100 tons) and cucumbers (100 tons). the quota volumes are rather substantial. which presents a gaping opportunity boosting exports. cucumbers.free access to Bosnia. which results in the over-quota tariff for tomatoes being relatively low (6. suggesting that Moldova is interested in protecting these markets and only allowing in no more than a few truckloads of each product. and mushrooms.000 tons). Annex Table A-6 shows that the over-quota tariff for these categories is no better than Moldova’s MFN tariff of 15%. CEFTA 2006 resulted in quotas being opened for imports from Macedonia of cabbages (200 tons). leeks. As seen in Annex Table A-4. Ukraine opened only one TRQ for fresh vegetable imports from Macedonia (Annex Table A-17). peppers. onions. It is worthwhile studying the relative complementarity of the Macedonian and Turkish markets for these fresh produce items.” But this market access is not as attractive as at first blush. with a zero duty for imports from Macedonia. Another EFTA member. Under the SAA with the EU. which do not seem overly generous. Macedonian exports are assessed only 45% of Croatia’s MFN rate under CEFTA. Albania’s import market for fresh peppers is apparently wide-open. Norway. Macedonian vegetables would no longer be subject to the reference price system. since the EU’s system of reference prices and a variable levy still act as tariff-like barriers. gherkins and summer mushrooms. as seen in Annex Table A1). onions. cucumbers.75%). and winter mushrooms (Annex Table A-19). upon EU accession. Kosovo. Ukraine also opened small quotas for dried peppers and dried mushrooms. mushrooms and both fresh and semi-prepared peppers. For Chinese cabbages. 37 . including tomatoes. As for Moldova. Of course. Under the Macedonia-Turkey FTA. Several persons interviewed noted that consumers in these former Yugoslav regions have a highly favorable opinion of the flavor of the Macedonian tomato (domati). all Macedonian fresh vegetables can enter any EU member country “duty-free.000 tons of fresh peppers. Switzerland made concessions generally involving a reduction in their MFN rate. as Croatia established TRQs for imports from Macedonia of tomatoes (4. For import volumes above the quota.

It is possible to anticipate a change in Macedonian eating habits regarding the purchase and preparation of fresh vegetables. a wide range of fresh vegetables will be able to enter Macedonia’s market duty-free. where the influence of domestic and international supermarkets is spreading rapidly (World Bank 2003). The effect of the concession will be limited in time. peppers and cucumbers. A 30-percent tariff by Serbia on Macedonian fresh vegetables. Duty-free access is ensured into Macedonia’s market for imports from Bosnia-Herzegovina. Kosovo. Tomatoes and cucumbers may enter Macedonia duty-free from all CEFTA partners except Albania and Moldova. but probably only in supermarket sales. including being subject to Serbia’s seasonal prelevman.g. Also under CEFTA. On the other hand. As has happened elsewhere. This could include seeds for such products of importance to Macedonia as tomatoes. While Serbia would continue to enjoy duty-free access into the EU market—including Macedonia. Macedonian consumers will have year-round access to certain vegetables now only available seasonally. rather than a threat. If so. with EU accession.” One tangible risk to Macedonia’s market access would certainly arise if Macedonia joins the EU before Serbia. small TRQs for imports from Albania were opened for potatoes. Serbia would have the right to erect new barriers to imports from Macedonia. which could be seen as a threat averted by Macedonia’s trade negotiators. Macedonia should not be complacent about its tenure in a key market like Serbia. what will be the effect on Macedonian producers? 38 . but these CEFTA countries are usually importing from Macedonia rather than exporting to Macedonia. Montenegro and Serbia. Croatia and Slovenia) due to its slow adoption of modem production systems (EUREPGAP). quality standards and grading and packaging technology.Threats The fresh vegetable sector is not overly menaced by threats from the signing of the recent trade agreements. seasonal imports from Turkey could provide raw material for Macedonia’s vegetable processors. One analysis warns that Macedonia “is losing market share in a range o f historical markets (e. tomatoes. as above-quota quantities will face Macedonia’s MFN tariffs from Albania including the seasonal levy called the prelevman. With EU accession. Products from other EU countries would undoubtedly penetrate Macedonia’s domestic market. The agreement with Turkey does not provide new access into Macedonia’s market. Perhaps the most important concession made by Macedonia is to permit duty-free imports from Moldova for 100 tons of seeds for planting (HS1209). this opening to Moldovan seeds may be seen as an opportunity to improve competitiveness. carrots and cucumbers. would undoubtedly jeopardize one of Macedonia’s principal export markets. With little domestic seed production in Macedonia.

30) The lack of professional organization of the fresh vegetable sector is in part responsible for the perceived loss in competitiveness in recent years. there are myriad possibilities for market promotion activities.9 studying how to sell peppers to Ukraine—who are the main buyers?. would provide a focal point for 9 Perhaps by using the connection presented by the presence of RamStore. a tomato and pepper sub-sector development committee was in existence. onions. 29) In order to capitalize on the opportunities presented by the recent trade agreements. and establishing a fresh vegetable exporters association. What is needed is a marketing study of the seasonality of imports versus exports for the fresh and processed vegetable sectors. if it were linked to a financial incentive of some kind.Recommendations 25) Macedonia’s Ministry of Economy should open up a tariff-rate quota for the import of fresh peppers from Turkey during the period of the harvest season in Turkey (the month of June). Earlier in this decade. Reviving this group. Macedonia should negotiate a TRQ at 0% duty for say 2. then it can be said that the imports will have little effect on Macedonian producers. Turkey’s concession on wine from Macedonia is for a 50% reduction of the MFN duty. in Skopje. As this could be a unilateral measure. a Turkish supermarket chain. etc. The financial incentive could relate to eligibility for quality premiums.000 tons of wine. 26) A similar opportunity for rationalizing the trade regime—and increasing throughput by Macedonia’s vegetable processors—could be attractive for other fresh vegetables such as tomatoes. it might be desirable to amend the FTA with Turkey and make this a permanent TRQ for pepper imports. or training in how to benefit from the EU’s offered IPARD funds. The group. including traders and exporters made a trip to Canada. it would not be necessary to negotiate this quota within the framework of the Macedonia-Turkey FTA. which is 102%. 28) Develop a marketing campaign to profit from the good image of the Macedonian tomato in CEFTA markets. The sector would benefit from designing a Code of Good Business Practices for the industry. In return for establishing the TRQ for imports of fresh peppers into Macedonia. However. This would allow Macedonian pepper processors to have additional through-put during the months of July and August at a time when their factories are otherwise not operating. the non-respect for contracts by farmers and delays in payments to farmers by exporters is an untenable situation. 39 . cucumbers. 27) As mentioned in the recommendations for table grapes. inviting Swiss traders to Macedonia to capitalize on zero-duty access in Switzerland for certain products. If the imports enter Macedonia at a time of year when there is little local product to be found on the market. Some of these might include: undertaking a trade mission to Turkey or inviting Turkish buyers to Macedonia.

tomato products). The equipment in most of the processing facilities is old. mixed pickled vegetables. drying or canning (into glass jars) of vegetables (World Bank 2006). while production has increased strongly in other neighboring countries and in the EU. having been installed in the mid-1970s and 1980’s. Macedonian vegetable processors offer a range of products: Frozen vegetables are semi-processed products which are then further used as inputs in the food industry.training activities and the dissemination of information on trade opportunities and for training on how to access funds from IPARD. tomato ketchup and tomato juice are also traditional Macedonian exports. Even in the former Yugoslavia. in order to bring in more-modern techniques and marketing skills. and vegetables that have been pasteurized or preserved in some other fashion (peeled tomatoes). rather than fruit. MAP data show 28. preserved or provisionally preserved vegetables represent the best-known of the traditional industries in the sector. Macedonia was organized to supply other parts of the country. About 90% of the processing done in Macedonia involves vegetables. Dried fruits and vegetables produced in Macedonia include peppers. Croatia’s Agrokor has started to invest in Macedonia in fresh vegetable and processed vegetable production in the south near the Greek border. chili pepper. a range of marinated vegetables (pickled gherkins. whereas only small quantities of dried peppers and onions are sold on the domestic market. with about half of all the raw material processed. The production of dried products is relatively low. and djuvec—a mixture of different vegetables and sliced and roasted peppers). The Macedonian canning industry makes pepper products (ajvar—a type of pepper purée. as many companies depend on crude oil heating and drying systems. carrots. cabbage. The most commonly applied technology is tunnel or chamber freezing. parsley and semi-dried tomatoes. Processed Vegetables Macedonia’s processed vegetable industry is very export-oriented. lutenica—a mixture of pepper and tomatoes. mainly due to high energy costs. Some processors recently installed aseptic production lines. Prepared. Tomato concentrate. The handling of exports is mostly conducted by brokers. The sector’s professional organizations could serve as an entrée for welcoming further foreign investment in the sector. Red pepper is the most important raw material for the vegetable processing industry. leek. Dried vegetables are mostly exported. but is still in good condition. Roughly 30 vegetable processing companies are presently engaged in the freezing. tomato paste. spinach. with the main products being ajvar and frozen peppers. red beet.600 tons of peppers 40 . onions. Macedonian production of frozen vegetables has decreased since 1998.

41 . providing seeds of fruit seedlings. The industry offers diced peppers in 10 mm or 20 mm sizes. The processors often pre-finance the production of the private farmers. with Serbia the second most important market after the EU as a whole. cutting.000 tons per year) are active in Macedonian processed vegetable exports (World Bank 2006). going for production under private labels for retail chains. major problems occurred in assuring a sufficient supply of raw material. Due to the financial difficulties of processors. However. Bulgaria. partly due to high import duties on fruits and vegetables in Macedonia. Macedonia is a net exporter of processed and preserved vegetables.processed in 2007. About 50 traders (each exporting about 2. with ajvar representing the largest share of the industry. but progress is slow. Macedonian processing industry is making efforts to improve the quality standards by introducing new technology and standards such as HACCP and ISO.700 tons (the net weight from washing. According to MAP. certain processors have started their own production of fresh vegetables. food safety and protection of consumers. During the last few years. compared with 2. and removing the seeds). Holland and Slovenia.100 tons of chili peppers and 1. In order to assure supply of raw product. which fall below the psychological threshold of 1 Euro per kilogram (MAP 2008). Major quantities of raw material are provided through intermediaries (trading companies). Nearly all of the companies active in processing vegetables in Macedonia have been formed since the mid-1990s. Macedonia’s Association of Processors notes the relatively low value of processed vegetable exports. Currently. and sometimes farmers sell their products in the market in spite of previous agreements with the processor. Fresh vegetables are bought from private farmers and from agricultural enterprises. As a result. Macedonian processors of fruit and vegetables are not facing serious problems concerning the compliance with quality requirements for exports to regional markets.500 tons of raw material to produce 1. Processors are unable to conclude long-term delivery agreements with the farmers. MAP considers these exports to be “commodities” rather than “value-added products” (although this is a matter of semantics).200 tons of white peppers (MAP 2008). going mostly to EU markets such as Germany. Some of the frozen peppers are exported in 20-25 kg cold stores and then repacked in the importing country. fertilizers and technical assistance. other markets such as the EU continue to increase their requirements for quality standards. In most situations. which buy the produce from farmers and deliver it to the industry. The EU is the most-important market. Much of Macedonia’s exports are anonymous for the end-users. barter arrangements prevail. written contracts do not exist. Macedonia’s frozen pepper industry utilized 4. Imports of raw products for processing are very limited.

Figure 3: Macedonia’s Exports of Processed Vegetables Million dollars 10 7. As shown in Figure 3. including potato chip) and 42 .5 5 2. Exports of ajvar.” mainly potatoes (fried.82 Source: Macedonian Association of Processors (MAP 2008). Macedonian exports of frozen vegetables have grown quickly from 2004 through 2007. but remained level in 2007. in Million Euros 2004 2005 2006 2007 HS2005 4. In order to properly penetrate new and existing markets.88 7. it is perhaps inevitable that the Macedonian trade data for pepper mixtures may be somewhat difficult to interpret. exporters of ajvar need to specify which HS tariff code they are exporting their product under. preferably at the 10-digit level. With several different combinations of pepper products being produced and exported.5 0 2004 Sliced mushrooms 2005 2006 2007 Ajvar Frozen vegetables Source: Macedonia’s State Statistical Office. salted or roasted.93 7. As for Macedonia’s imports. cut. Table 7: Macedonian Exports of Ajvar and Lutenica (HS2005). about 85% fall under the category of “other preserved vegetables. Includes some product categories not covered in Figure 2. based on data from MAP were growing from 2004 through 2006. MAP for ajvar exports .30 5.

500 tons) to Croatia. As for Croatia. preserved tomatoes (1. Norway has established zero-duty access for unlimited imports of dried & prepared mushrooms and dried pepper. the over-quota tariff is relatively low. The CEFTA 2006 provides for zero-duty access for Macedonian exports to Bosnia. meaning that only ajvar produced in Macedonia within the guidelines of a certain range of ingredients will be able to use that term. The concessions made by Albania under CEFTA for imports from Macedonia include zero duties for dried peppers and marinated peppers (but not ajvar). For ajvar. especially procuring sufficient volumes of raw vegetables. As for Turkey.” This means that Macedonian processors can purchase raw material from other CEFTA countries and the resultant product counts as “CEFTA origin” and can be exported duty-free to the EU. at 8. that FTA opened quotas for imports from Macedonia of dried onions vegetable mixtures. and dried peppers (500 tons). keeping in mind that some of the gaps in the table make the precise quota quantities for specific products somewhat unclear. Macedonian processors can import glass jars from Croatia duty-free and are doing so. Opportunities For processed vegetables. The Macedonia-Ukraine FTA resulted in quotas being opened for exports to Ukraine of dried vegetables (HS0712—500 tons). processed mushrooms and peppers. The input supply problems the industry faces. pickled products. with imports up to the level of the quota able to enter Croatia duty-free. The Macedonia-EFTA offers a couple of very-specific opportunities.500 tons). quotas were opened for pickles (400 tons). opened zero-duty access for imports from Macedonia of prepared mushrooms and ajvar. and ajvar (1. there are many trading opportunities opened by CEFTA and the other recent agreements. Iceland. Kosovo. represent perhaps a greater barrier to expanding exports in a significant way than does market access. Macedonia’s Ministry of Agriculture is finalizing registration of Makedonski ajvar as a geographical indication. crushed pepper.preserved olives. which combined amount to three-quarters of all processed vegetable imports. Pickles are another common import product for Macedonia. CEFTA also opens up the possibility for Macedonia’s processors to benefit from “diagonal cumulation.1%. but unfortunately not to the largest market (Switzerland-Liechtenstein). Another opportunity under CEFTA relates to an important input into Macedonia’s canning industry. which is certainly a limited market. Annex Table A-15 shows the details of the agreement with Turkey. and ajvar. As there are several producers and exporters of ajvar—and all could benefit from an enhanced image 43 . Montenegro and Serbia for all products.

New investments in those countries could present new competitors both for Macedonia’s exports and on Macedonia’s home market. From our interviews. there will potentially be a sharp adjustment in the import price for tomato ketchup. whether in cans or frozen. While this may expand overall sales. Another tangible threat is that Macedonia may see changes in the lifestyle and foodways of its domestic consumers. Macedonia opened TRQs for imports from Moldova of pickled and prepared vegetables (including potatoes). A recent report by the World Bank (2006) predicted that “increasing trade liberalization is promising to transform Macedonia’s agricultural sector. Unless producers and agroprocessors become more competitive. The EU also seems intent on exporting sweet corn to Macedonia.” The troubled raw material supply relations between Macedonia’s vegetable processors and farmers certainly hamper competitiveness. There is a lack of adequate warehousing to handle a greater proportion of Macedonia’s domestic vegetable crop.of the product. they will have trouble competing in both external and internal markets. Most of the other recent agreements do not involve specific concessions by Macedonia on processed vegetables. it became clear that the variable business practices on the part of both sides disrupt the processors’ business plans and sales calculations. especially peppers for processing. such that they are buying processed vegetables at supermarkets rather than buying fresh vegetables and processing them at home. which limits the growth of companies and the growth of exports. There is also a lack of import opportunities in order to provide a “second season” of processing activity. the relatively limited product line of Macedonia’s 44 . If Croatia joins the EU before Macedonia. Kosovo. the registration of the Makedonski ajvar mark presents the opportunity for an industry-wide marketing campaign. The tariff will fall from 30% ad valorem in 2010 to 0% in 2011. Under Macedonia’s SAA with the EU. Macedonian processors lack raw material most of the year. If Macedonia joins the EU before Serbia. The recent trade agreements will only heighten the pressures faced by these companies and each one needs a strategic vision given the many changes underway. Serbia would likely erect new barriers to imports from Macedonia. Beyond the issue of contract enforcement. as the Macedonia’s tariff concession is backloaded. Threats There are always threats to any business and this holds true for Macedonia’s vegetable processors as well. the glass jars imported into Macedonia will face an increase in duty (although Macedonia would not be obligated to raise the duty). As for the terms of the trade agreements themselves. the CEFTA 2006 opens duty-free access for processed vegetable imports from Bosnia. Montenegro and Serbia.

Macedonian exporters should solicit a market analysis of the potential export outlets for products of interest covered under the Macedonia-Turkey FTA. 32) To improve the cooperation amongst Macedonia’s processors. Recommendations 31) As mentioned under the section on fresh vegetables. Using e-mail. With EU accession. which could help bring the industry closer together. buy ajvar. Another avenue would be to identify interested Turkish importers and to organize a mission by Turkish buyers to Macedonia.processors (outside of different pepper mixtures) could lead to a trend towards importing ready-made foods. there is ample production of peppers during the month of June. This could be a way to provide additional throughput for pepper processors during a period of the year before Macedonia’s domestic pepper harvest. It is recommended to study the costs and benefits of moving to smaller-size jars (320 grams).” 35) Macedonia’s processors suffer problems both in maintaining consistent relations with the farmers supplying raw materials and in grappling with the legal code in order to bring on their own labor force. with such slogans as “If you miss home. it should be possible to establish a purchasing cooperative to gain economies of scale in buying inputs such as glass jars and caps. In addition to cost savings. Similar recommendations hold for exploiting the opportunities under the MacedoniaUkraine FTA. as EU processed vegetables will enter Macedonia duty-free and offer a broader selection of products. it would be interesting to undertake a “viral marketing campaign” among Balkan-origin populations around the world. which is only needed for a couple of months’ period. a top priority should be for Macedonia’s vegetable processing industry to lobby the government to open a seasonal TRQ to buy peppers duty-free from Turkey. 34) As a unique product. It is said that in Turkey. 45 . 33) One analyst noted that Macedonian products are being sold in larger-size jars (over 700 grams) than those sold in the EU market. as this could be a way to brace for increasing supermarketization of Macedonia’s consumer purchasing behavior. ajvar presents some opportunity for creativity. A provision related to the hiring of workers for seasonal processing could be inserted into Macedonia’s labor and tax codes. Those eligible to do so should change their labels to say Makedonski ajvar and cooperate on a marketing campaign in key markets to announce the launch of this protected geographic mark. it can be anticipated that supermarket sales will be affected. this step would improve the functioning of the industry association. 36) In order to capitalize on the opportunities for exporting to Turkey. A Code of Good Business Practices could be developed to promote respect by farmers for direct contracts and timely payment by processors. when Macedonia’s processing facilities are idle.

” Prime minister of Macedonia. Vol. 31 March.” www.” Prepared by Department for Multilateral Affairs. “Developing Trade Exchange Within CEFTA-.” Ministry of Economy (2006).” April 16.net. Macedonian Association of Processors (MAP 2008).” University of California. VII. “FDI: Down But Not Out – Macedonia.” November. “Report on Foreign Trade of Macedonia 2007. Southeast European Times (2006). Macedonian Business (2007). “Strategy for Approximation of the Macedonian Agro-Food Sector to the Common Agriculture Policy (CAP) of the EU. April.Bibliography Agricultural Marketing Research Center (AgMRC 2006). “Macedonia gains membership in CEFTA.” 28 February.” No. 5 May. “Exports are an issue of survival. “Trade Liberalization and WTO. FTAs and SAA Implications on Macedonian Agribusiness Sector. Ministry of Agriculture (2005).” February. “The Economic Situation in South East Europe and the Role of Trade and Investment.fdi. “The Macedonian Wine Cluster. Gruevski. Ministry of Economy (2007b). Business Monitor International. “2007 Conference on Promoting Macedonian Exports: Proceedings. “Commodity Profile: Table Grapes. 19 April. Anthony O’Sullivan. “Welcome Address to the CEFTA 2006 Summit. Forestry and Water Economy of the Republic of Macedonia (2004). 66. “Survey on the Performance of the Fruit and Vegetable Processing Industry 2007.” November. Harvard Business School (2006). Ministry of Agriculture.razvojot na trgovskata razmena po stapuvaweto vo sila na CEFTA 2006.” PowerPoint file by director for OECD Investment Compact for SEE. Mass.” Cambridge. Nicola. 46 . Ministry of Economy (2007a). Organization for Economic Cooperation and Development (OECD 2007). February.

” 30 November. List of Persons Interviewed 1. Customs Administration of Republic of Macedonia a. Mr. Lidija Lekoska – Advisor for Customs Tariffs 4. World Trade Organization (2002). Mrs. Mrs. Ministry of Economy of Republic of Macedonia a. “Trade. Anastasija Jovanovska – Head of Unit for cooperation with WTO c.Executive Secretary 47 . WTO (2008). Boban Ilic . PhD – Department for Agro-economics 5. Zorica Smileva – Head of Unit of Multilateral Trade Cooperation d.Project Coordinator-Modernization of the Agricultural sector in Macedonia 6. Mrs. Aleksandara Martinovska. Mr. World Bank (2007).” November. Mr.Head of Training Unit Customs Administration Republic of Macedonia and Advisor to the Director General b. Krume Efremov – State Advisor for Euro-integration and international policy b. “Working Document 13: Tariff Quotas. Regional Integration and Growth in the Western Balkans.” 28 March.” PowerPoint file. “CEFTA to admit Macedonia. MAP – Macedonian Association of Processors a. Forestry and Water Economy of Republic of Macedonia a. Saso Risteski . “FYR Macedonia and EU Accession: Achieving FYR Macedonia’s Agricultural Potential. Mrs. “Trade Policies and Institutions in the Countries of South Eastern Europe in the EU Stabilization and Accession Process.” WT/L/494. Ministry of Agriculture. World Bank (2003). Mrs.Turkish Weekly (2005). Zlatko Veterovski . Mr. Lidija Paskalova – Advisor in the Unit of Multilateral Trade Cooperation 2.” WTO website. Mrs. 18 October. Material from post-Uruguay Round analyses. Tatjana Veta – Head of Trade Policy Unit 3. German Technical Cooperation – GTZ a. opens door to other Southeast European countries. World Bank (2006). Faculty for Agriculture Science and Food – Skopje a. “Accession of the Former Yugoslav Republic of Macedonia.

Medium – Export – Skopje. Mr.DCOP/Production Agriculture and Policy Manager AgBiz coordinator for wild harvested products.Finance and Marketing Specialist AgBiz coordinator for table grapes. Vinery BOVIN – Negotino a.Post-farm Gate Development & Finance Manager AgBiz coordinator for processed vegetables. Mr. Mrs.Chief of Party b.Production Agriculture Development Specialist AgBiz coordinator for fresh vegetables. Mr. lamb meat. Mr.Kavadarci. Tomislav Bukleski – Marketing and Sales 12. AgBiz Programe a. Zvonko Janevski – Director 10. d. Vinery SKOVIN – Skopje a. Vladimir Kokarev .Senior Legal Advisor 8. b.) a. Alijansa . Aleksandar Sahov . Fresh Table Grapes producer a. Mr. Goran Damovski . Marija Miteva – Head of Commercial Department 48 . Lovre Ristevski . Mr. Mr. Mr. vegetables (pepper. Mr. USAID’s Business Environment Activity (BEA) a.7. Martin West . tomato. Permindex – Agricultural Complex (including VARDAR Gradsko) a. Jeton Starova . c. Mr. etc. export-import of agrarian products. Emanuel Tasev (Bapcho) – Director and co-owner 11. Jani Bogevski – Sales Manager 13. 9. e. Mr.Marketing and SME Development Manager AgBiz coordinator for bottled wine. Aleksandar Bogevski – Manager b. Dimitar Dimitrovski .

Annex One: CEFTA Concessions Related to Macedonia Table A-1: Albania’s Quotas for Imports from Macedonia Tariff Code Product Name Quota Preferential Maximum import (tons) duty within duty for quantities quota exceeding the quota fresh cheese (not 0406 10 cured) 50 0% 10% MFN 0406 90 29 00 goat milk cheese 50 0% 10% MFN 0702 tomatoes 150 0% 10% MFN 0707 cucumbers 100 0% 10% MFN 0808 10 apples 3.000 0% 10% MFN 1601 sausages 150 0% 10% MFN 1602 other prepared or 100 10% MFN or 15% preserved meats 0% MFN 1704 sweets made with 200 sugar (not cocoa) 0% 10% MFN 49 .

Table A-2: Albania’s Tariffs for Imports of Interest from Macedonia 070951 mushrooms 10% MFN 070952 other types of mushrooms 10% MFN 070959 truffles and other wild roots 10% MFN 070960 peppers 0% mushrooms or tomatoes steamed 071080 or frozen 10% MFN cucumbers provisionally preserved 071140 (not ready for consumption) 10% MFN mushrooms provisionally preserved (not ready for 071151 consumption) 10% MFN mushrooms provisionally preserved (not ready for 071159 consumption) 10% MFN dried mushrooms (including 071231 powder) 10% MFN 071239 more types of dried mushrooms 10% MFN 080610 fresh grapes 10% MFN 0904 dried peppers 0% 200190 marinated peppers 15% MFN 20019020 other types of marinated peppers 0% 20019050 other types of marinated peppers 0% 20019070 other types of marinated peppers 0% 20019096 other types of marinated peppers 0% 200310 preserved mushrooms 15% MFN other types of preserved 200320 mushrooms 15% MFN 200590 ajvar 15% MFN other types of preserved 200390 mushrooms 15% MFN 220410 sparkling wine 0% 220421 wine in bottles 0% 220429 bulk wine 0% 220430 wine must 0% 2307 wine lees (solids) 0% 50 .

51 . including 200290 paste 0% 200310 preserved mushrooms (agaricus) 0% 200320 preserved truffles 0% 200390 other preserved mushrooms 0% 200590 ajvar 0% 220410 sparkling wine 0% 220421 wine in bottles 0% 220429 bulk wine 0% 220430 other grape must 0% 2307 wine lees (solids) 0% Bosnia did not establish any tariff-rate quotas for imports from Macedonia.Table A-3: Bosnia’s Tariffs for Imports of Interest from Macedonia 0702 tomatoes 0% 0707 cucumbers 0% 070951 mushrooms 0% 070952 other types of mushrooms 0% 070959 truffles and other wild roots 0% 070960 peppers 0% mushrooms or tomatoes steamed or 071080 frozen 0% cucumbers provisionally preserved 071140 (not ready for consumption) 0% mushrooms provisionally preserved 071151 (not ready for consumption) 0% mushrooms provisionally preserved 071159 (not ready for consumption) 0% 071231 dried mushrooms (agaricus) 0% 071232 wood ears (auricularia) 0% 071233 jelly fungi (tremella) 0% 071239 other mushrooms 0% 080610 table grapes 0% 0904 dried peppers 0% 200190 marinated peppers 0% 200210 preserved tomatoes 0% more preserved tomatoes.

5/100kg (45% of MFN) Rates vary by type (45% of MFN) 6.4/100kg (45% of MFN 4.2%+€32.52/100kg (45% of MFN) 4.92/100kg (45% of MFN) 4.25%+€9/100kg (45% of MFN) 4.9/100kg (45% of MFN) 4.200 2005907010 vegetables 20059080 (including ajvar) 2005908010 2204 4.500 20059010 20059030 20059050 20059060 Other preserved 1.25% (45% of MFN) 2.Table A-4: Croatia’s Quotas for Imports from Macedonia Tariff code 020321 020322 020329 020410 0406 070200 070700 070960 080711 080810 110100 151219 160100 1602 110100 151219 160100 1602 200110 2002 Product name Pork Lambs meat cheese tomatoes cucumbers peppers watermelons 800 100 4.500 7.000 apples 200 wheat flour refined sunflower 200 oil sausages 150 150 liver pate 200 wheat flour refined sunflower 200 oil sausages liver pate pickles preserved tomatoes 150 150 400 1.750 bulk wine 0 8.25%+€9/100kg (45% of MFN) 4.5%+€79.5%+€70.5%+€7.2% (45% of MFN) 52 .75%+€7.5%+€9.000 1.75% (45% of MFN) 15.200 3.52/100kg (45% of MFN) 4.500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Quota (tons) 300 Preferential duty Import duty for quantities within quota exceeding the quota 0 4.25% (45% of MFN) 2.5%+€20.47/100kg (45% of MFN) 1.92/100kg (45% of MFN) 2.45/100kg (45% of MFN) 6.1% (45% of MFN) 0 0 21% (45% of MFN) 30.75% (45% of MFN) 9% (45% of MFN) 4.92/100kg (45% of MFN) 2.000 wine in bottles 220429 2.5%+€79.5%+€5.5%+€70.

500 0 tobacco 240220 180 0 cigarettes Authors’ calculations of over-quota tariff rate.2% (45% of MFN) 53 . 9% (45% of MFN) 22.240110 2.

Table A-5: Croatia’s Tariffs for Imports of Interest from Macedonia 070951 mushrooms 0% 070952 other types of mushrooms 0% 070959 truffles and other wild roots 0% see quota 070960 peppers explanation mushrooms or tomatoes steamed or 071080 frozen 0% cucumbers provisionally preserved (not 071140 ready for consumption) 0% mushrooms provisionally preserved 071151 (not ready for consumption) 0% mushrooms provisionally preserved 071159 (not ready for consumption) 0% 071231 dried mushrooms (agaricus) 0% 071232 wood ears (auricularia) 0% 071233 jelly fungi (tremella) 0% 071239 other mushrooms 0% 080610 table grapes 0% 0904 dried peppers 0% 070951 mushrooms 0% 070952 other types of mushrooms 0% 070959 truffles and other wild roots 0% see quota 070960 peppers explanation mushrooms or tomatoes steamed or 071080 frozen 0% cucumbers provisionally preserved (not 071140 ready for consumption) 0% mushrooms provisionally preserved 071151 (not ready for consumption) 0% mushrooms provisionally preserved 071159 (not ready for consumption) 0% 071231 dried mushrooms (agaricus) 0% 071232 wood ears (auricularia) 0% 071233 jelly fungi (tremella) 0% 071239 other mushrooms 0% 080610 table grapes 0% 0904 dried peppers 0% Table A-6: Moldova’s Quotas for Imports from Macedonia 54 .

25/liter MFN €3/1000 pieces MFN 55 .000 2203 0% beer hl 2402 100 0% cigarettes Tariff code Import duty for quantities exceeding the quota 15% MFN 15% MFN 15% MFN 10% MFN 5% MFN 15% MFN 15% MFN 15% MFN 15% MFN 15% MFN 20 MFN 20 MFN 20 MFN 20 MFN 20 MFN 10 MFN or 15 MFN 15 MFN 10 MFN or 15 MFN 10 MFN 15 MFN 15 MFN €0. tomato ketchup 150 2104 150 0% soups 2201 300 0% bottled water bottled water with 2202 200 0% flavorings or sweeteners 3.Preferential Quota duty within (tons) Product name quota 070490 200 0% cabbages and broccoli 070700 100 0% cucumbers 070960 100 0% peppers 0904 10 0% dried peppers 1006 200 0% rice 1601 50 0% sausages 1602 50 0% liver pate 1704 0% sugar sweets without cocoa 50 1806 50 0% chocolate 1905 50 0% biscuits and cookies preserved vegetables in 20019020 100 0% vinegar preserved vegetables in 20019050 100 0% vinegar preserved vegetables in 20019070 100 0% vinegar 200590801 ajvar 100 0% 200590809 ajvar 50 0% 2009 50 0% fruit juices 2101 10 0% instant coffee 2103 0% soy sauce.

5/liter MFN 220430 other grape must €0.Table A-7: Moldova’s Tariffs for Imports of Interest from Macedonia 0702 tomatoes 20% MFN 070951 mushrooms 15% MFN 070952 other types of mushrooms 15% MFN 070959 truffles and other wild roots 15% MFN 070960 peppers see quota information 071080 mushrooms or tomatoes steamed or frozen 15% MFN cucumbers provisionally preserved (not ready 071140 for consumption) 15% MFN mushrooms provisionally preserved (not 071151 ready for consumption) 15% MFN mushrooms provisionally preserved (not 071159 ready for consumption) 15% MFN 071231 dried mushrooms (agaricus) 15% MFN 071232 wood ears (auricularia) 15% MFN 071233 jelly fungi (tremella) 15% MFN 071239 other mushrooms 15% MFN 080610 table grapes 20% MFN 0904 dried peppers see quota information 200190 marinated peppers see quota information 200210 preserved tomatoes 20% MFN 200290 more preserved tomatoes.5/liter MFN 220421 wine in bottles €0.5/liter MFN 220429 bulk wine €0. including paste 20% MFN 200310 preserved mushrooms (agaricus) 20% MFN 200320 preserved truffles 20% MFN 200390 other preserved mushrooms 20% MFN 200590 ajvar 20% MFN 220410 sparkling wine €0.5/liter MFN 2307 wine lees (solids) 10% MFN 56 .

57 . including paste 0% 200310 preserved mushrooms (agaricus) 0% 200320 preserved truffles 0% 200390 other preserved mushrooms 0% 200590 ajvar 0% 220410 sparkling wine 0% 220421 wine in bottles 0% 220429 bulk wine 0% 220430 other grape must 0% 2307 wine lees (solids) 0% Montenegro did not establish any tariff-rate quotas for imports from Macedonia.Table A-8: Montenegro’s Tariffs for Imports of Interest from Macedonia 0702 tomatoes 0% 0707 cucumbers 0% 070951 mushrooms 0% 070952 other types of mushrooms 0% 070959 truffles and other wild roots 0% 070960 peppers 0% 071080 mushrooms or tomatoes steamed or frozen 0% cucumbers provisionally preserved (not ready for 071140 consumption) 0% mushrooms provisionally preserved (not ready for 071151 consumption) 0% mushrooms provisionally preserved (not ready for 071159 consumption) 0% 071231 dried mushrooms (agaricus) 0% 071232 wood ears (auricularia) 0% 071233 jelly fungi (tremella) 0% 071239 other mushrooms 0% 080610 table grapes 0% 0904 dried peppers 0% 200190 marinated peppers 0% 200210 preserved tomatoes 0% 200290 more preserved tomatoes.

including paste 0% 200310 preserved mushrooms (agaricus) 0% 200320 preserved truffles 0% 200390 other preserved mushrooms 0% 200590 ajvar 0% 220410 sparkling wine 0% 220421 wine in bottles 0% 220429 bulk wine 0% 220430 other grape must 0% 2307 wine lees (solids) 0% Serbia did not establish any tariff-rate quotas for imports from Macedonia.Table A-9: Serbia’s Tariffs for Imports of Interest from Macedonia 0702 tomatoes 0% 0707 cucumbers 0% 070951 mushrooms 0% 070952 other types of mushrooms 0% 070959 truffles and other wild roots 0% 070960 peppers 0% 071080 mushrooms or tomatoes steamed or frozen 0% cucumbers provisionally preserved (not ready for 071140 consumption) 0% mushrooms provisionally preserved (not ready for 071151 consumption) 0% mushrooms provisionally preserved (not ready for 071159 consumption) 0% 071231 dried mushrooms (agaricus) 0% 071232 wood ears (auricularia) 0% 071233 jelly fungi (tremella) 0% 071239 other mushrooms 0% 080610 table grapes 0% 0904 dried peppers 0% 200190 marinated peppers 0% 200210 preserved tomatoes 0% 200290 more preserved tomatoes. 58 .

59 .Table A-10: Kosovo’s Tariffs for Imports of Interest from Macedonia 0702 tomatoes 0% 0707 cucumbers 0% 070951 mushrooms 0% 070952 other types of mushrooms 0% 070959 truffles and other wild roots 0% 070960 peppers 0% 071080 mushrooms or tomatoes steamed or frozen 0% cucumbers provisionally preserved (not ready for 071140 consumption) 0% mushrooms provisionally preserved (not ready for 071151 consumption) 0% mushrooms provisionally preserved (not ready for 071159 consumption) 0% 071231 dried mushrooms (agaricus) 0% 071232 wood ears (auricularia) 0% 071233 jelly fungi (tremella) 0% 071239 other mushrooms 0% 080610 table grapes 0% 0904 dried peppers 0% 200190 marinated peppers 0% 200210 preserved tomatoes 0% 200290 more preserved tomatoes. including paste 0% 200310 preserved mushrooms (agaricus) 0% 200320 preserved truffles 0% 200390 other preserved mushrooms 0% 200590 ajvar 0% 220410 sparkling wine 0% 220421 wine in bottles 0% 220429 bulk wine 0% 220430 other grape must 0% 2307 wine lees (solids) 0% Kosovo did not establish any tariff-rate quotas for imports from Macedonia.

25%+€0.500 100 Preferential duty Import duty for quantities within quota exceeding the quota 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% €0.12/kg MFN 0% 40% MFN 0% 25%+€0.59/kg (45% of MFN) 22.75% (45% of MFN) 13.25%+€0.045/l (45% of MFN) 4.Table A-11: Macedonia’s Quotas for Imports from Albania Tariff code Product name cheese cheese potatoes tomatoes carrots cucumbers Quota (tons) Import duty for Preferential duty quantities exceeding the within quota quota 0% 25%+€0.16/kg (45% of MFN) €0. 2103 90 90 including 90 tomato ketchup 2104 10 soups 2204 29 bulk wine 2401 10 tobacco 2402 20 cigarettes 60 .62/kg MFN 0% 30%+€0.000 200 200 400 1.045/kg (45% of MFN) €0.43/kg MFN 10% or 15% MFN 0% MFN 0406 10 50 0406 90 29 50 0701 300 0702 00 150 0706 200 0707 00 100 0807 ex 0807 11 00 melons.12/kg MFN 0% 0% 0% 0% 45% MFN 10%+€0.5% (45% of MFN) 2.675/kg (45% of MFN) 6.18/kg (45% of MFN) 11.19/kg (45% of MFN) 4.62/kg MFN 0% 45% MFN (for 070190) 0% 25%+€0.75%+€0.5% (45% of MFN) 9% (45% of MFN) 27% (45% of MFN) milk blue cheese 0406 30 (cow's milk) 0406 90 other cheeses 1001 wheat 1101 wheat flour refined 1512 19 sunflower oil 1601 sausages 1602 liver pate sauces.5%+€0.5%+€0.0225/kg (45% of MFN) 4.5% or 6.28/kg (45% of MFN) 6.75%+€0.28/kg (45% of MFN) €0. excluding 2.19/kg (45% of MFN) €0.100 300 540 400 hl 2.500 00 watermelons 1601 00 150 sausages 1602 100 liver pate 2208 20 12 00 ethyl alcohol 200 hl Table A-12: Macedonia’s Quotas for Imports from Croatia Tariff code 0203 21 0203 22 0203 29 0401 20 Quota Product name (tons) pork 300 600 150 150 20.

20% or 30% MFN 2008 prepared nuts 100 0% 20% or 30% MFN Rates vary. max. incl. 2001 100 0% incl.35 eur/kg 1704 50 0% sweets max.36% chocolate MFN cookies and 1905 50 0% biscuits 30% MFN pickled vegetables.43/kg MFN 1602 liver pate 50 0% 10% or 15% MFN 1703 sweets 300 0% 2% MFN 14%+0.05 eur/kg 0202 100 0% beef max.000 0% wheat 75% MFN 1003 barley 1. 100 0% potatoes 5% MFN 2005 20 40% MFN 2007 jams and jellies 100 0% 5%. 10% MFN or 0802 100 0% nuts 15% MFN 15%+0. 1209 including peppers 100 0% 2% MFN or 15% MFN and tomatoes 1507 soybean oil 100 0% 0% MFN 1601 sausages 50 0% 10%+€0. peppers 50% MFN prepared 2005 10 vegetables.30% MFN Rates vary up to 30% 1806 50 0% +0.000 0% 8% MFN or 10% MFN seeds for planting. max 46% 2009 50 0% fruit juices MFN 2402 cigarettes 50 0% 60% MFN Table A-14: Macedonia’s Tariffs on Imports from CEFTA Countries for Products of Interest 61 .17 eur/kg. 1001 1.1 eur/kg max.Table A-13: Macedonia’s Quotas for Imports from Moldova Import duty for Tariff Quota Preferential duty quantities exceeding code (tons) within quota Product name the quota 13%+0.15% MFN 0405 butter 100 0% 15% MFN 10% MFN or 15% 0713 100 0% dried peas MFN 5% MFN.

Moldova and Albania have only MFN 50% Moldova and Albania have only MFN 50% 071231 dried mushrooms (agaricus) 0 071232 wood ears (auricularia) 071233 jelly fungi (tremella) 071239 other mushrooms 080610 table grapes 0904 dried peppers 0 0 0 0 0 0 0 0 200190 marinated peppers 200210 preserved tomatoes more preserved tomatoes. Albania has a quota Moldova has MFN 25%.12 0% eur/kg max. Albania has a quota* Moldova has MFN. 0% for piper Only Moldova has a quota. Albania has zero for 20019050 and above. Albania has a quota Albania and Moldova have MFN 45%+0. Albania has a quota** Moldova has MFN 25%.0702 0707 070951 070952 070959 tomatoes cucumbers mushrooms other types of mushrooms truffles and other wild roots 0% 0% 0% 0% 0% 070960 peppers mushrooms or tomatoes 071080 steamed or frozen cucumbers provisionally preserved (not ready for 071140 consumption) mushrooms provisionally preserved (not ready for 071151 consumption) mushrooms provisionally preserved (not ready for 071159 consumption) Moldova has MFN. Albania has a quota Moldova has MFN 25%. 200290 including paste preserved mushrooms 200310 (agaricus) 200320 preserved truffles 0% Moldova and Albania have only MFN 40% 0% Moldova and Albania have only MFN 40% 200390 other preserved mushrooms 0% Moldova and Albania have only MFN 40% 200590 ajvar 220410 sparkling wine 0% Moldova and Albania have only MFN 50% 0% Moldova and Albania have only MFN 45% 62 .65% 0% Moldova and Albania have only MFN 45% 0% Moldova and Albania have only MFN 45% 0% Moldova and Albania have only MFN 35% 0% Moldova and Albania have only MFN 35% Moldova and Albania have only MFN 20% Moldova and Albania have only MFN 20% Moldova and Albania have only MFN 20% Moldova and Albania have only MFN 20% Moldova and Albania have only MFN 50% Moldova and Albania have only MFN 45% for 090420 (capsicum).

** MFN features seasonal duties of: 45%+€0. 63 .12/kg Nov 1-Feb 14. with 25%+€0. max 65% from Feb 15-Oct 31. max 65% from March 15-Dec 31.220421 wine in bottles 220429 bulk wine 220430 other grape must 0% Moldova and Albania have only MFN 50% Croatia has a quota.12/kg Jan 1-March 14. with 25%+€0. Moldova and Albania 0% have only MFN 50% 0% Moldova and Albania have only MFN 50% 2307 wine lees (solids) 0% Only Moldova has MFN 5% * MFN features seasonal duties of: 45%+€0.12/kg.12/kg.

Other 12119075:950013.08081020. whether or not polished or glazed 121190 (excl. 950017. Golden. Fresh apples. starking) 090420 Fruits of Gemus Capsicum or Pimenta.--12) (excl. pears and quince 080810900011. mixtures of 300t dried vegetables Other 500t Watermelons 1000t 50% reduction in MFN 0% 50% reduction in MFN 0% 0% 0% 50% reduction in MFN 50% reduction in MFN 50% reduction in MFN 0% 07071900 Other 0808(excl. starkrimson. gherkins 070960 070951 07108051 07109000 07122000 071290 07133390 08071100 Fruits of Genus Capsicum or Pimenta Mushrooms Sweet peppers 100t 100t 0% 50% reduction in MFN Mixtures of vegetables Dried onions Other dried vegetables. crushed or ground 100630 Semi-milled or wholly milled rice.Annex 2: Concessions under the Macedonia-Turkey Free Trade Agreement Table A-15: Turkey’s Quotas for Imports from Macedonia Product name Tariff quota Rate of duty HS code within quota 070200 Tomatoes fresh or chilled 070310 Onions and shallots 070490 Other 1500t 0% 070700 Fresh cucumbers. dried.950018 20019050 Mushrooms 200310 Mushrooms 20019096 Other 20059010 Fruits of Genus Capsicum other than sweet peppers or Pimentos 20059070 Vegetable mixtures 200590800019 Other (Ajvar) 64 350t 100t 8000t 100t 100t 100t 200t .

spirits. 22029091.95. grape must unlimited other than that of heading No 2009 Undenatured ethyl alcohol of an alcoholic strength by volume of less unlimited than 80%vol. mustard flour and meal and prepared mustard Cucumbers and gherkins 200t Sweet peppers Sauces and preparations therefore. unlimited mixed condiments and mixed seasoning. mustard flour and meal and prepared mustard Soups and broths and preparations unlimited therfor Other Wine of fresh grapes.99) 2204 2208 0% 0% 50% reduction in MFN 0% 65 . unlimited mixed condiments and mixed seasoning.20011000 20019070 2103 Cucumbers and gherkins 200t 50% reduction in MFN 0% 20011000 20019070 2103 Sweet peppers Sauces and preparations therefore. liqueurs and other spiritious beverages 50% reduction in MFN 0% 210410 220290(excl.

dye carriers to accelerate the unlimited dyeing of fixing of dyestuffs and other products and preparations Cotton. other 8000t 0% 10. flax tow unlimited and waste (incl. blues based on starches 300t unlimited unlimited unlimited 50% reduction from MFN 0% 0% 0% 0% 0% 0% Finishing agents.20.30. yarn waste and gartnetted stock) 5302 0% 66 . 200t 0% otherwise prepared or preserved. raw or unlimited processed but not spun. whether or not containing added sugar or other sweetening matter or spirit 2203 290543 2905 44 3505 3809 5201 00 5301 Beer Mannitol D-Glucitol (Sorbitol) Dextrins and other modified starches. mandarins.000t 0% 0713 40 Lentils 500t 0% 0802 22 00 00 Hazelnuts (shelled) 250t 0% 0805 Oranges. nuts and other edible parts of plants. lemon. yarn waste and gartnetted stock) True hemp (Cannabis sativa).90 citrus fruit 0806 20 Dried grapes 250t 0% 1509 10 90 Olive oil 100t 0% 1604 14 Canned tuna fish 350t 0% 1604 20 70 0% 2005 70 Preserved olives 700t 0% 2008 Fruits.Table A-16: Macedonia’s Quotas for Imports from Turkey HS code Product name Tariff quota Rate of duty within quota 0207 Poultry meat 3. not carded or combed unlimited Flax. tow and waste of true hemp (incl. raw or processed but not spun. grape fruit.40.

000 liters 2103 Sauces.000 liters 2204 Wine (bulk or bottled) 40.Annex 3: Concessions under the Macedonia-Ukraine Free Trade Agreement Table A-17: Ukraine’s Quotas for Imports from Macedonia HS code Product name Tariff quota 0204 Meat of sheep or goats 500 tons 070960 Peppers 5.000. including ketchup 3.000 tons 2007 Jams and jellies 100 tons 2008 Prepared or preserved nuts 500 tons 2009 Fruit juices (including grape must) 3.000 tons 2002 Preserved tomatoes 4.000 tons 0712 Dried vegetables (including 500 tons mushrooms) 0813 Meat of sheep or goats 200 tons 0904 Dried pepper 500 tons 121190 Herbs for tea 500 tons 1704 Sugar sweets (no cocoa) 500 tons 1806 Chocolate 500 tons 1904 Breakfast cereals 500 tons 190530 Cookies and waffles 100 tons 2001 Pickled vegetables 6.000 liters 240110 Tobacco 10.000 tons 2005 Vegetable mixtures (ajvar) 3.000 liters(!) Rate of duty within quota 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 67 .000 liters 220890 Grape brandy (rakija) 100.000 liters 220820 Undenatured ethyl alcohol 100.000.000 liters 2209 Vinegar 100.

000 tons 0% 2209 Vinegar 100.-22.000 liters 0% 170112 Beet sugar 15. 0202 Fresh and frozen beef 1.000 tons 0% 020321.000 liters 0% 68 .000 tons 0% 1512 Sunflowerseed oil 10.Frozen pork 300 tons 0% 29 0402 Condensed milk 400 tons 0% 100350 Barley 5.Table A-18: Macedonia’s Quotas for Imports from Ukraine Product name Tariff quota Rate of duty HS code within quota 0201.000.000 tons 0% 1704 Sugar sweets (no cocoa)100 tons 0% 1806 Chocolate 100 tons 0% 190530 Cookies 50 tons 0% 2007 Jams and jellies 100 tons 0% 2201 Water 100.000 tons 0% 100590 Maize 20..

15 5 Swiss francs/100 kg Except 070705 Gherkins Unlimited MFN rate minus 5 Swiss francs/100kg 070951:076011 Mushrooms Unlimited 0% Except 07096012 Mushrooms (April 1-October 31) Unlimited 5 Swiss francs/100 kg 071220 09042010:90 20021010 20021020 20029010 20029021 20029029 200310 20049018 20049039 20049049 20049069 Dried onions Dried pepper Prepared or preserved tomatoes (>5kg) Prepared or preserved tomatoes (<5kg) Tomato pulp and puree (>5kg) Tomato pulp and puree Other tomato pulp and puree Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited 0% 0% MFN rate minus 6.15 MFN rate minus 5 Swiss francs/100kg 0704 Cabbages Unlimited 0% Except 07049060:90 Chinese cabbages Quota no. beans (<5kg) Ajvar-like products with onions.5 Swiss francs/100kg 0% MFN rate minus 10 Swiss francs/100kg MFN rate minus 10 Swiss francs/100kg MFN rate minus 14 Swiss francs/100kg MFN rate minus 14 Swiss francs/100kg Prepared or preserved mushrooms Unlimited Prepared or preserved vegetables Unlimited with onions. peas and beans Unlimited (>5kg) Prepared or preserved vegetables Unlimited with onions. 15 refers to annual Swiss import law.5 Swiss francs/100kg MFN rate minus 6.5 Swiss francs/100kg MFN rate minus 11.Annex 4: Concessions with Switzerland and Liechtenstein under the Macedonia-EFTA Free Trade Agreement Table A-19: Switzerland’s Concessions on Imports from Macedonia for Products of Interest HS code Product name Tariff quota Rate of duty within quota 0702 Tomatoes Unlimited 0% 0703 Onions Unlimited 0% Except 070390 Leeks Quota no. Quota no. peas. beans (>5kg) Ajvar with onions.15 5 Swiss francs/100 kg 0707 Cucumbers Quota no. Unlimited peas and beans (<5kg) Concessions apply for exports to Liechtenstein as well. peas.5 Swiss francs/100kg 0% MFN rate minus 11. 69 .

70 .

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