December 28, 2018 / 2:46 PM / 19 days ago

Amid recognition row, Kosovo hits Serbia with more customs tariffs

PRISTINA (Reuters) - Kosovo’s government on Friday raised tariffs on a second layer of imports from Serbia, stepping up pressure on Belgrade to end a campaign to persuade other countries to withdraw recognition from its former province.

Kosovo's President Hashim Thaci (C), Prime Minister Ramush Haradinaj (L) and Kosovo Security Forces Commander Lt. Gen. Rrahman Rama attend a session after parliament approved formation of national Kosovo army in Pristina, Kosovo, December 14, 2018. REUTERS/Laura Hasani

Kosovo, whose mostly ethnic Albanian population declared independence from Serbia in 2008, is recognised by around 110 nations but not by Serbia, Russia or five EU states.

The government in Pristina last month raised customs tariffs on imports of locally-made products from Serbia and Bosnia, which also does not recognise Kosovo, to 100 percent from 10 percent.

On Friday, in a move that Serbia called “insane”, it did the same for imports of foreign-manufactured goods from the two countries.

Justifying the step, Kosovo’s Prime Minister Ramush Haradinaj said Serbia’s derecognition drive was an “act of aggression”.

Kosovar officials told Reuters a handful of countries had withdrawn their decision to recognise Kosovo.

Serbia, which has also been active in preventing Kosovo from joining the United Nations, criticised the tariff move.

“We are for a free trade, normal relation and equal chances for all. What they are doing is insane,” Marko Djuric, head of the Serbian government’s Office for Kosovo, said on state-run RTS TV. “Pristina has declared war on major global brands.”

The foreign goods affected by Friday’s move include Coca Cola and products by Nestle and Austrian juice maker Rauch.

In the month since the first 100 percent tariffs were introduced, imports from Serbia and Bosnia imports fell to a combined 290,000 euros from 35 million euros a year ago.

In 2017, Serbia’s exports to Kosovo totalled 450 million euros ($515 million) and Bosnia’s 80 million euros.

Bosnia, Kosovo and Serbia - along with Albania, Montenegro and Moldova - are part of the Central European Free Trade Agreement (CEFTA) set up to help ex-communist states harmonise their economic and legal systems with EU demands.

The EU said Kosovo’s move was a clear violation of the CEFTA agreement.

Kosovo declared independence a decade after a NATO bombing campaign to end the killing of Albanian civilians by Serb forces during a two-year insurgency.

($1 = 0.8728 euros)

Reporting by Fatos Bytyci; additional reporting by Aleksandar Vasovic in Belgrade; editing by John Stonestreet

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