Western Balkans

Trade plays an important role in the EU's efforts to promote peace, stability, freedom and economic prosperity in the Western Balkans.

The Western Balkans consists of Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia, and Kosovo*.

Trade picture

For all of the Western Balkan partners, the EU is the leading trade partner, accounting for two-thirds (66.7%) of the region's total trade; while the region's share of overall EU trade is only 1.5%.

After two years of substantial recovery from the Covid-19 pandemic, 2023 saw a decline of 2.7% in trade between the EU and the Western Balkans, bringing the total value of the two sides' bilateral trade to €82 billion. This represents an increase of 135% in total bilateral trade with the Western Balkans since 2013. Overall, this trade expansion has been to the benefit of the EU's Western Balkan partners; as the region increased its exports to the EU by 160%, compared to an increase of EU exports to the region of 119%. 

• In 2023, the EU's main imports from the Western Balkans were: machinery and appliances (24%), mineral products (12%), base metals (11.6%), and chemicals (11.1%).
• The EU's main exports to the Western Balkans were: machinery and appliances (20.4%), mineral products (12.4%), chemicals (10.1%), transport equipment (9.4%), and base metals (9.4%).

The EU and the Western Balkans

All countries of the Western Balkans have a European integration perspective, which was first recognised during the Feira European Council in 2000. This was further confirmed by the Thessaloniki European Council in 2003 and by the Sofia European Council in May 2018. This European perspective is integrated into the Stabilisation and Association Process, which is the EU's policy in relation to the countries of the Western Balkans. Under this process, all Western Balkan countries have a common future as EU Member States.

Since the launch of the Stabilisation and Association Process, the EU has progressively concluded bilateral 'Stabilisation and Association Agreements' (SAAs) with each of the Western Balkan partners: Albania (2009), North Macedonia (2004), Montenegro (2010), Serbia (2013), Bosnia and Herzegovina (2015) and Kosovo* (2016).

The SAAs are tools which provide for the economic development and political stabilisation of the countries in the region, and for the creation of a close, long-term association between the EU and the Western Balkan countries. In effect, the SAAs constitute the legal instrument for alignment to the EU acquis and progressive integration into the EU market.

The SAAs established a free-trade area for a transitional period, which has now ended for all but Kosovo* (2026). The Agreements foresee the elimination of duties and non-tariff restrictions on bilateral trade and cover goods in all Chapters of the Harmonised System. Only a few exceptions, concerning some agricultural and fishery products, are not fully liberalised, and are subject to reduced duties and/or preferential quantitative concessions.

In addition, the agreements include provisions concerning competition matters, a high level of protection of intellectual property rights, and strengthened co-operation in customs matters. They also include additional disciplines concerning, notably, government procurement, legislative approximation in many areas including standardisation, and provisions regarding services and establishment.

On 8 November 2023, the European Commission adopted its New Growth Plan for the Western Balkans, which aims to bring the Western Balkan countries closer to the EU by offering them some of the benefits of EU membership in advance of accession, boosting economic growth and accelerating socio-economic convergence.  A noteworthy example of planned actions regarding the free movement of goods includes the possible conclusion of agreements on conformity assessment (ACAAs) to unlock the single market for goods manufactured in the Western Balkans, based on full alignment with the relevant horizontal EU product acquis. 

For more information, see also: Commission Communication on 'Western Balkans: Enhancing the European perspective', and the 2019 Communication on EU Enlargement Policy.

The pan-Euro-Mediterranean cumulation and the PEM Convention on rules of origin 

The pan-Euro-Mediterranean cumulation system of origin was created in 2005. It brings together the EU, the Western Balkan countries, and other partners in Europe and the Mediterranean to support regional integration by creating a common system of rules of origin. Rules of origin are technical criteria which determine whether a specific product qualifies for duty-free or other preferential access under a given trade agreement. 

Cumulation of origin means a product coming from one partner country can be processed or added to a product of a second partner country and still be considered an ‘originating product’ of that second partner country for the purposes of a particular trade agreement. 

The pan-Euro-Mediterranean system allows for diagonal cumulation (i.e. cumulation between two or more countries) between the EU, EFTA countries, Turkey, the Western Balkans, the Faroe Islands, Ukraine, Moldova, Georgia and any country that signed the Barcelona Declaration of 1995. The system was originally based on a network of Free Trade Agreements with identical origin protocols. 

These individual origin protocols have been progressively replaced by a reference to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention), which was established in 2011 to provide a more unified framework for origin protocols. 

Transitional rules of origin applicable in the pan-Euro-Mediterranean (PEM) area:

• The EU is currently in the process of amending 21 origin protocols within the pan-Euro-Mediterranean (PEM) area, by implementing an alternative set of rules of origin applicable alongside the rules of the PEM Convention, on a bilateral basis, pending the entry into force of the revised convention on 1 January 2025. These new rules, which were endorsed by a large majority of PEM Contracting Parties, including the Western Balkans, contain a significant number of improvements and simplifications as compared with the current PEM Convention.

New rules adopted for the Western Balkans:

• As of 1 September 2021, the new rules became applicable between the EU and Albania (OJ L 2023/2676, 11.12.2023).
• As of 9 September 2021, the new rules became applicable between the EU and North Macedonia (OJ L406, 16.11.2021, p.1).
• As of 6 December 2021, the new rules became applicable between the EU and Serbia (OJ L163, 29.06.2023, p.12).
• As of 2 February 2022, the new rules became applicable between the EU and Montenegro (OJ L156, 09.06.2022, p. 72).
• The Decision 1/2022 of the EU-Kosovo* Stabilisation and Association Council regarding the implementation of the transitional rules entered into force on 29 April 2022 and shall apply as from 15 October 2022 (OJ L252, 30.09.2022, p. 87).
• As of 11 December 2023, the new rules became applicable between the EU and Bosnia and Herzegovina. 

For more information: 

• Commission notice concerning the application of the transitional rules of origin providing for diagonal cumulation between the applying Contracting Parties in the pan-Euro-Mediterranean (PEM) zone

Accessing the EU market

Since 2000, the EU has been granting autonomous trade preferences to all the Western Balkan countries.

These preferences, which were renewed for another five years at the end of 2020, allow nearly all exports to enter the EU without customs duties or limits on quantities.

Only sugar, wine, baby beef and certain fisheries products enter the EU under preferential tariff quotas.

Committees and Dialogues

The EU and the Western Balkan countries meet regularly to discuss issues and best practices and oversee the proper functioning of the agreement.

• Meetings and documents

Trading with the Western Balkans

• Importing into the EU from the Western Balkans
  • EU trade defence measures on imports from the Western Balkans
• Exporting from the EU to the Western Balkans
  • Trade defence measures in force in the Western Balkans
• Trade relations are part of the EU's overall political and economic relations with Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo*.
• The EU strongly supports the membership of the Western Balkans states in the World Trade Organization (WTO): Albania (2000), North Macedonia (2003) and Montenegro (2011) are already WTO members. The WTO accession negotiations with Serbia and Bosnia and Herzegovina are still ongoing.
• The Central European Free Trade Agreement (CEFTA) is a single Free Trade Agreement (FTA) linking all the Western Balkans and Moldova.

* This designation is without prejudice to positions on status, and in line with UNSCR 1244 and the ICJ Opinion on the Kosovo Declaration of Independence.