Joining the European common market would render our region more attractive in the eyes of both investors and supply chain buyers, and would create new opportunities for our economies to grow faster and – according to the estimates of World Bank analysts – by an additional six per cent
If the first questions of potential investors arriving in this region that was considered a destination offering reduced business costs and generous incentives until just a few years ago were mainly “do you have people who could work in our factories and how is your infrastructure?”, while supply chain buyers would assess, apart from the price, the ability of suppliers to deliver high-quality products, on time and in sufficient quantities, the list of expectations is today much longer.
“European companies’ need to relocate their operations closer to home and find suppliers and investment destinations in the neighbourhood has brought the Western Balkans into their focus and created huge opportunities for the region, but circumstances globally, world market disruptions and new trends in business have also presented new requirements for states, business associations and companies that relate – to put it as succinctly as possible – to sustainability across the entire supply chain,” explains Marko Cadez, president of the Chamber of Commerce & Industry of Serbian (CCIS).
“Without undermining the importance of what each of us does in our own backyard to satisfy the new expectations of buyers and investors, it is crucial that all six small economies work together, through mutual cooperation and connection, in terms of both infrastructure and business, to remove common barriers, overcome the limitations of our small, fragmented markets and become better for ourselves and others,” considers our interlocutor.
It is crucial that all six small economies work together, through mutual cooperation and connection, in terms of both infrastructure and business, to overcome limitations and become better for ourselves and others
The CCIS president believes that the countries of the region need to build a larger common regional market of almost 20 million consumers that will function according to the same principles and freedoms of the European Economic Area and will prove more stimulating to both local and European companies that already operate here and more attractive to future investors from around the world. The vision of such a market implies fewer barriers and costs and the greatest possible freedom in terms of movements of people, goods, services and capital. Doing business on such a market would be more efficient; road haulage vehicles carrying goods would travel without stopping and spending hours waiting at border crossings, while the mutual recognition of qualifications and exchanges of experts and workers would be possible without excessive bureaucracy. The vision of such a region implies doing business according to the same rules, which have been harmonised mutually and in accordance with EU standards, and based on the principles of the new digital and green economies.
“It is equally important that we simultaneously accelerate European integration. The business community of the Western Balkans insists that the entire region together, all six economies, in dialogue with Brussels-based institutions, reaches a new model or framework that will provide us – even before gaining full membership – with the four freedoms [governing the movement of goods, persons, services and capital] and the complete opening up of the single European market to companies and products from this region, providing them with the same treatment as EU companies,” says Čadež. “That isn’t something unprecedented; that process could be completed in two years, based, for example, on the example of the successful model of the Agreement on the European Economic Area (EEA), which brings together EU and EFTA member states in a single market.”
Our interlocutor insists that we have no time to waste; that this is a prerequisite to ensure the competitiveness of our companies and the survival of our economies and businesses. “It is important that we enter the single market as soon as possible, remove barriers to trade with the EU, enable the free flow of people, goods, services and capital, but also that we secure access to European funds not currently available to us, thus receiving more funding for the energy and green transitions, for infrastructure and for new technologies.”
Entering large supply chains requires significant domestic investments in terms of the applying of innovations and new technologies that are essential for satisfying the standards of such chains
According to Čadež, it is vital for companies from the region to become part of European supply chains. “Local companies thereby not only open a channel to send their products to market, but also raise their capacities, develop themselves, advance and improve the quality of their products and processes, harmonise their operations with new regulations on the markets where they operate, in order to remain in those arrangements for as long as possible and to contract new jobs.”
One of the key conditions for establishing cooperation to date has been the applying of relevant international or European standards for management systems, as well as an array of technical specification standards that are widely understood and ensure the quality and safety of products.
“In recent times, through negotiation processes or during the implementation of contracted arrangements, our companies have already been confronted by new standards that emerge from the increasingly stringent European and national regulations of the home countries of their customers or partners and which relate to an entire body of issues connected to environmental protection and sustainable corporate business, such as the CRSD (Corporate Sustainability Reporting Directive) and ESG (Environmental, Social and Governance) standards, including due diligence, non-financial reporting, the Carbon Border Adjustment Mechanism, amended EU Taxonomy etc.” notes our interlocutor.
“The countdown has already begun, and if there are some requirements that local companies don’t have to fulfil immediately, they will be knocking on their door as early as tomorrow. They won’t only have to respond to them, but also ensure compliance with them down their supply chains – transferring them to their smaller supplier companies. That is also a great challenge and responsibility for chambers of commerce – to take on the key role of being allies to their members in green transformation processes,” explains Čadež.
