Fact Sheet No.3 Trade and Free Trade Agreements Last updated: March 2008

Foreign trade data of Albania (in million USD) 3. Trade and Free Trade 4500 Agreements 4000 3500 Foreign Trade Regulations 3000 Albania applies a liberal trade regime. Foreign Trade has 2500 been liberalized since 1990 and follows guidelines set 2000 by the . As a result of this liberalization 1500 and an on-going process of harmonization of Albanian 1000 customs rules with the EU system, imports and exports of commodities are not generally subject to special 500 authorization requirements. Exceptions apply to quotas or 0 control requirements imposed through different bilateral 1999 2000 2001 2002 2003 2004 2005 2006 2007 or multilateral agreements signed by Albania. Licenses are Exports Imports also required for specific commodities with restricted circulation within the country (such as military or strategic Source: Bank of Albania, ACIT goods, radioactive materials and psychotropic substances, drugs etc.) Licenses can be obtained from the Ministry of Foreign trade by countries 2007 Defense (military or strategic goods) Ministry of Health (in milion USD) (drugs and psychotropic substances). Exports are not subject to any export taxes, fees or other barriers. Imports are not subject to any import duty taxes No Country Exports Imports FT Volume other than customs duties. Imports are subject to VAT and 1 ITALY 733,375.4 1,225,938.8 1,959,314.2 some items, such as tobacco, alcoholic beverages and fuel 2 GREECE 88,699.2 652,917.0 741,616.2 are also subject to an excise tax. 3 TURKEY 23,678.8 323,023.6 346,702.4 Albania joined the World Trade Organization (WTO) in 2000. Albania applies WTO rules on import licensing, e.g. 4 GERMANY 27,385.7 216,075.6 243,461.3 to products affecting life, health and the environment. 5 CHINA 26,328.1 191,337.3 217,665.4 For seven years (1October 1999 – 30 November 2006), 6 RUSSIAN F TION 844.2 216,520.4 217,364.6 Albanian exports to the EU countries benefited from an 7 2,747.0 150,628.0 153,375.0 asymmetric regime, in the form of autonomous measures. 8 25,366.7 99,980.2 125,346.9 On June 12, 2006 in , Albania signed the 9 MACEDONIA, FYR 19,175.3 92,511.6 111,686.9 Stabilization – Association Agreement with the EU. As 10 AUSTRIA 7,572.1 87,116.4 94,688.5 a result an Interim Agreement EU - Republic of Albania 11 12.5 93,348.0 93,360.6 has been in effect since December 2006. This agreement 12 SWITZERLAND 51,566.9 30,862.3 82,429.2 further liberalizes trade between EU and Albania. The liberalization rate on Albanian products which enter the 13 UNITED STATES 2,610.9 63,359.8 65,970.7 EU market is evaluated to be 98%. The Interim Agreement 14 KOSOVO 2,452.4 56,653.7 59,106.1 replaced the Trade, Commercial and Economic Co- 15 SPAIN 2,075.5 49,801.0 51,876.5 operation Agreement between the European Community 16 SERBIA AND MONTENEGRO 1,629.8 43,606.2 45,236.1 and Albania and will be in effect until all EU member 17 CROATIA 888.4 42,274.2 43,162.6 countries ratify the Stabilization – Association Agreement 18 UNITED KINGDOM 1,014.8 42,007.4 43,022.2 with Albania. So far 15 countries have ratified it and other 19 SLOVENIA 6,731.7 36,285.2 43,016.9 12 countries are in the process. 20 378.8 40,079.9 40,458.6 Albania has received an invitation to become a member 21 NETHERLANDS 7,146.6 33,247.4 40,394.0 of NATO on April 3, 2008. 22 CZECH REPUBLIC 55.7 39,038.4 39,094.1 Trade Developments 23 HUNGARY 608.6 36,607.1 37,215.7 24 BELGIUM 217.9 32,628.9 32,846.8 According to the Bank of Albania, for the year 2007, 25 REPUBLIC OF KOREA 3,365.4 28,165.1 31,530.6 the overall volume of trade (exports + imports) was 26 BRAZIL 17,110.8 10,136.8 27,247.7 estimated to be around 5.3 billion USD of which the export volume was approx. 1 billion USD. 27 SWEDEN 92.9 23,634.2 23,727.1 The European Union remains Albania’s the main trade 28 EGYPT 0.4 21,222.4 21,222.8 partner with 83% of exports and 62.8% of imports. Italy 29 GEORGIA 444.0 18,493.3 18,937.4 and Greece alone account for 44% of imports and 76% 30 BOSNIA AND HERZEGOVINA 344.7 18,415.7 18,760.4 of exports to and from the European Union, or 49% of total imports and 83% of total exports. Source: www.acit-al.org

 Foreign trade by categories of products Central European Free Trade Agreement 2007 (in thousand USD) On 6 April 2006, at the South East Europe Prime Ministers Summit in Bucharest, a joint declaration was adopted No Description Exports Imports on the expansion of CEFTA to Albania, Bosnia and Herzegovina, Croatia, Macedonia, Moldova, Montenegro, 1 Live animals: animal origin products 8,214.48 134,894.58 Serbia and UNMIK on behalf of Kosovo. The new 2 Vegetable products 29,667.79 229,452.38 enlarged agreement was initialed on 9 November 2006 in Brussels and signed on 19 December 2006. The new 3 Animal grease and oils or vegetal and 1,001.39 46,888.78 its products CEFTA treaty took effect on 1 May 2007. The enlarged Prepared food; drinks, alcoholic 4 beverages and tobacco 39,962.77 288,572.26 CEFTA is consolidating the network of bilateral free trade agreements and ensuring that Albania is an equal partner 5 Mineral products 166,655.09 701,776.99 within CEFTA. It is giving Albanian exports duty free 6 Chemical industrial products or alloys 3,185.23 300,653.06 access to a larger market. Plastic and its products; tire and its 7 products 7,823.99 139,850.65 8 Unprocessed and processed leather, coats 22,318.30 87,069.12 Bilateral Agreements 9 Wood and its products; charcoal; cork 13,396.57 69,384.24 and its products The newest Free Trade Agreement was signed between 10 Wood or other fibber 20,269.14 78,527.71 Albania and the Republic of Turkey on December 21, 11 Textile and its products 293,942.91 362,993.32 2006. This is an asymmetric agreement where Albanian 12 Footwear and hats, umbrellas and 227,261.22 73,648.05 products exported to Turkey are free of custom duties. parasols, Simultaneously, tariffs on sensitive industrial products 13 Stone, gypsum, cement products... 6,643.48 141,898.80 imported from Turkey will continue to be reduced and 14 Natural or cultivated pearls, jewellery 2,754.64 4,678.07 then eliminated after 5 years. The two countries will trade 15 Base metals and their products 159,679.25 516,823.02 agricultural products within the quotas specified in the Mechanic, electric machinery and Agreement with no customs. Standard customs duties will 16 equipment 42,812.36 595,834.41 be paid on all products not include above. 17 Vehicles 2,246.27 278,931.98 18 Optic, photographic, cinematographic. 1,610.30 46,761.93 Currently, FTAs with Bulgaria and Romania have been Weapons and munitions and their eliminated since they became members of the EU and 19 equipment 3,158.90 1,673.86 the Interim Agreement now applies. FTAs with all other 20 Different manufactured products 24,706.68 102,613.65 countries within the region, except Turkey based on the above agreement, are abolished since May 2007, when 21 Works of art, collection and antics 91.10 506.11 pieces CEFTA took effect.

Source: www. acit-al.org Free Trade Agreements have been signed to create a regional market of 65 million consumers. Albania has concluded bilateral agreements with all participating Free Trade Agreements nations of the Memorandum including Kosovo. Interim Agreement Albania –EU Once the Stabilization – Association Agreement (SAM) was signed (Luxembourg, June 12, 2006), further developing and strengthening of trade relationships between Albania and EU countries was necessary. For this reason an Interim Agreement is in effect since December 1, 2006, which allows trade and trade related provisions of SAM to take effect. The Interim Agreement replaced the Trade, Commercial and Economic Co-operation Agreement between Albania and European Community, and aims at establishing a free trade area between Albania and the EU within a 10 years period. Under this agreement, customs duties on Albanian industrial products entering the European market are reduced to zero. Blv. “Gjergj Fishta”, Pall. shallvareve, Tirana, Albania The same rule applies to most Albanian agricultural products tel: +355 4 252 886; fax: +355 4 222 341 while for others customs duties will be continually reduced e-mail: [email protected] until they are also eliminated. website: www.albinvest.gov.al