“Unilateral SAA application could be delayed”

The 2009 budget envisions the same customs revenue as 2008, which means that the Interim Trade Agreement with the EU will not begin to be applied from Jan.1.

Izvor: Beta

Wednesday, 03.12.2008.

15:42

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The 2009 budget envisions the same customs revenue as 2008, which means that the Interim Trade Agreement with the EU will not begin to be applied from Jan.1. "I believe that it is the wrong decision and an unnecessary restrictive measure, because by delaying the implementation of the Interim Agreement, Serbia sends a bad message to the EU,” says Economics Professor Mihailo Crnobrnja. “Unilateral SAA application could be delayed” "Moreover, it is possible that the damage done for not charging duty on goods imported from the EU will outweigh any benefit,” he said, adding that a reduction in custom taxes on imports would boost output, and that it was not difficult to figure out that “what you win on the swings you lose on the roundabouts.” Calculations showed that implementation of the agreement in 2009 would mean a EUR 150mn cut in revenue because of the reduction of customs on goods imported from the European Union (customs revenues from the import of industrial products would be EUR 130mn lower, while revenues on the import of agricultural goods would be down EUR 20mn). That shortfall should be offset by a rise in output, but it is certain now that owing to the negative effects of the world financial crisis, production growth will be less than forecast at the time the government decided to begin to implement the Interim Trade Agreement unilaterally. Beta news agency on Tuesday said that an agreement has yet to be reached in the government on the date of putting into effect the interim trade agreement with the European Union. Warnings can increasingly be heard from economists, who state that Serbia too could experience a recession in 2009, so that, due to lowered tax and customs revenue, the budget deficit could exceed the envisaged RSD 46.5bn.

“Unilateral SAA application could be delayed”

"Moreover, it is possible that the damage done for not charging duty on goods imported from the EU will outweigh any benefit,” he said, adding that a reduction in custom taxes on imports would boost output, and that it was not difficult to figure out that “what you win on the swings you lose on the roundabouts.”

Calculations showed that implementation of the agreement in 2009 would mean a EUR 150mn cut in revenue because of the reduction of customs on goods imported from the European Union (customs revenues from the import of industrial products would be EUR 130mn lower, while revenues on the import of agricultural goods would be down EUR 20mn).

That shortfall should be offset by a rise in output, but it is certain now that owing to the negative effects of the world financial crisis, production growth will be less than forecast at the time the government decided to begin to implement the Interim Trade Agreement unilaterally.

Beta news agency on Tuesday said that an agreement has yet to be reached in the government on the date of putting into effect the interim trade agreement with the European Union.

Warnings can increasingly be heard from economists, who state that Serbia too could experience a recession in 2009, so that, due to lowered tax and customs revenue, the budget deficit could exceed the envisaged RSD 46.5bn.

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