context: As part of an outcome of the Third BRI (Belt and Road) International Cooperation Forum, the PRC signed an FTA (free trade agreement) with Serbia on 17 Oct 2023. This is the fourth FTA signed with a European country, after Switzerland, Georgia and Iceland. The negotiations started in April 2023 and were substantially completed in September 2023. Against intensifying trade frictions with the EU and the US, Beijing will deepen ties with Central and Eastern Europe to strengthen its vision for the BRI, as the region remains an important hub connecting the PRC and Eurasia.
According to MofCOM (Ministry of Commerce), the key features of the PRC-Serbia FTA include
- a strong focus on trade in goods
- the PRC and Serbia will abolish tariffs on 90 percent of all tariff lines
- 60 percent will be abolished immediately after the agreement comes into effect
- the proportion of zero-tariff items will eventually reach about 95 percent
- wide product coverage for tariff cuts
- both sides will gradually reduce tariffs on products of concern to each side from the current 5 to 20 percent threshold to zero
- for PRC exports to Serbia, this includes automobiles, photovoltaic modules, lithium batteries, communication equipment, mechanical equipment, refractory materials and some agricultural and aquatic products
- for Serbian exports to the PRC, this includes electric motors, tires, beef, wine and nuts
- both sides will gradually reduce tariffs on products of concern to each side from the current 5 to 20 percent threshold to zero
- trade facilitation
- deepen cooperation in customs, information exchange and streamlining trade procedures
- the PRC and Serbia will abolish tariffs on 90 percent of all tariff lines
- clarify rules of origin
- 40 percent of the regional value content shall be used as the basis of the rules of origin, supplemented by product-specific rules of origin
- set out the specific requirements on the format and procedures of implementing rules of origin
- accept declarations of origin submitted by approved exporters as evidence of origin
- investment and services
- both sides agreed to cooperate in investment promotion and facilitation
- share and exchange investment information
- enhance the transparency of the investment environment
- simplify the application and approval procedures
- liberalise trade in services and market opening in accordance with the WTO General Agreement on Trade in Services
- both sides agreed to cooperate in investment promotion and facilitation
- strengthen cooperation in intellectual property protection
- follow the principles and provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights
- other areas
- strengthen cooperation in health and traditional Chinese medicine
- set out rules on competition policy to be followed by enterprises on the basis of recognising independent competition law enforcement