Last News: Kosovo threatens Albania with 100% tax

The Albanian government's superficial engagement to facilitate trade has not worked as Kosovo has lost patience. If Albania does not remove stumbling barriers to flour, beer and potatoes in the next two months, the Kosovo government will apply reciprocity in trade relations with Albania, announcing a 100 per cent tax on Albanian products, Nikolin Jaka, head of the Tirana Chamber of Commerce, confirmed.

Jaka said the Kosovo government has made a commitment to remove all obstacles to Albanian exports to Kosovo, but the Albanian government is not meeting its commitments in terms of some emergency demands considered by Kosovo businesses. In a survey conducted with Kosovo businesses concerning the trade climate with the region, Albania is ranked second after Serbia for high trade barriers applying to Kosovo. Authorities there have even claimed that Albania was ranked nearly the same as Serbia for trade barriers to goods from Kosovo.

Exhausted with empty promises, as trade barriers only increase in reality, the Kosovo government has given Albania deadlines. If for two months no trade is eased and protective taxes for beer, potatoes and flour are removed from Kosovo, tariffs for all Albanian products will increase, the monitor writes. al

Trade relations between Albania have evolved slowly, but the benefits have mostly been Albania.

Exports towards Kosovo have seen a strong increase in the first part of this year, especially during the month of April, driven by two groups -- the one from minerals and fuels (mostly oil) and metal and construction materials, which jointly occupied 74% of exports to this state for January-April 2019.

According to INSTAT data, in the January-April period goods worth $8.9 billion have been sold in the neighbouring country, with an increase of 52% in proportion to the same period last year. Kosovo ranks this way in the second export destination, after Italy, with 9% of the total, up from 5.8% that was this weight in the first quarter of last year.

The biggest growth was in April, when exports jumped by 70%. The main effect on this increase has been on the group <x0 potential, fuel and energy”, which has increased to fourfold for the month, reaching 2.3 billion dollars. This group has occupied 26% of total exports. Its growth relates to the resumption of refinery activity ARMO, which part of the processed oil takes it to Kosovo. ARMO has increased production in the country in the first months of this year, while receiving more crude oil from Bankers Petroleum and the latter has reduced exports to other states.

The largest exporter group is <x0 maternity construction and metals”, mainly metals. The biggest exporter is Kurum, who has Kosovo one of its main export destinations.

Over the month, exports of construction materials and metals were $4.1 billion, with an annual-based 18% increase. This group accounts for the largest weight, with 46% of total exports to Kosovo.

Albania does not seem to have benefited greatly from establishing the 100% tax Kosovo imposed on Serbian goods, as the growth of these two groups has been influenced more by internal factors, such as the resumption of ARMO's work.

However, other products have also seen growth, even though started on a small basis. Food and drink exports, though they have increased by 38%, representing about 10% of total. Chemical and plastic products increased by 60% for the four-month period, accounting for 6.2% of the total.