Jelena Mihic Munjic
Managing Director, Kreston MDM, Serbia

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Experienced Managing Director with a strong background in business development, strategy, and leadership. A licensed Certified Auditor and Accountant and Registered Court Expert with expertise in economics and finance. Extensive board and committee membership, including the Supervisory Board of Unicredit bank Serbia and AmCham Tax and Finance Board. Published author in reputable business publications. Holds a Master’s degree in Quantitative Finance and a Bachelor’s degree in Economics. Fluent in Serbian and English with limited working proficiency in Spanish. Committed to driving growth, delivering results, and fostering strategic alliances. Jelena holds qualifications from the East China University of Science and Technology and the University of Belgrade, Faculty of Economics and Business.

Serbia and China: The Free Trade Agreement (FTA)

June 4, 2024

The Serbia-China Free Trade Agreement (FTA) signed on October 17, 2023, represents a significant milestone for the two nations and in the broader context of international politics, particularly the dynamics between Europe and China. This agreement is noteworthy for several reasons:

1. The Serbia-China Free Trade Agreement (FTA) is the first FTA in Central and Eastern Europe

This FTA is the first of its kind between China and a Central Eastern European country, positioning Serbia as a pioneer in this new phase of economic relations with China. It marks a departure from China’s previous European FTAs with nations like Switzerland, Iceland, and Georgia, extending its reach into a region where such agreements have been absent.

2. Economic and trade impacts

The agreement promises to enhance trade and cooperation across automotive, technology, agriculture, and commodities sectors. In 2022, bilateral trade between China and Serbia was valued at approximately $3.55 billion, with Serbia exporting mainly ores, slag and ash, copper, and electrical equipment to China. Conversely, China’s exports to Serbia included machinery, electronic equipment, and vehicles. This FTA aims to further increase this trade volume by eliminating tariffs on a significant portion of goods, creating opportunities for both countries.

3. Strategic implications and the Belt and Road Initiative

Serbia’s active participation in China’s Belt and Road Initiative (BRI) signifies a deepening of strategic ties. China has been heavily involved in infrastructure projects in Serbia, including the construction of highways and power plants, reflecting a growing economic partnership under the BRI framework.

4. Divergence from the EU Path

The FTA represents a notable divergence from the path Serbia has been expected to follow in its pursuit of EU membership. The European Union, which has been cautious in its trade dealings with China and does not have an FTA with Beijing, may view this agreement as a significant deviation from Serbia’s expected alignment with EU policies and standards.

5. Response to EU accession delays

The slow pace of Serbia’s EU accession negotiations has created a void, which China appears eager to fill. This FTA can be seen as Serbia seeking to diversify its economic alliances and reduce its dependence on European markets, in response to the protracted EU integration process.

6. Implications for the European Union

This development poses a challenge for the EU, highlighting the need for a nuanced approach towards aspirant countries and their international agreements. The EU may need to address the implications of China’s increasing economic presence in regions traditionally under EU influence, especially among countries awaiting EU membership.

In summary, the Serbia-China FTA is a landmark development, highlighting shifts in global trade dynamics and the evolving relationship between Europe and China. It reflects Serbia’s strategic navigation of international relations amidst delayed EU accession and China’s expanding influence in regions critical to European interests.

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