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Trade and Free Trade Agreements

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




3.Trade and Free Trade                                             4500
                                                                            Foreign trade data of Albania (in million USD)

Agreements                                                         4000
                                                                   3500
Foreign Trade Regulations                                          3000

Albania applies a liberal trade regime. Foreign Trade has       2500
been liberalized since 990 and follows guidelines set          2000
by the European Union. 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
                                                                  500
of commodities are not generally subject to special
authorization requirements. Exceptions apply to quotas or          0
                                                                       1999 2000 2001 2002 2003 2004 2005             2006   2007
control requirements imposed through different bilateral
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 (October 999 – 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 BULGARIA                   2,747.0   150,628.0     153,375.0
asymmetric regime, in the form of autonomous measures.           8 UKRAINE                    25,366.7 99,980.2       125,346.9
On June 2, 2006 in Luxembourg, 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 ROMANIA                    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
2 countries are in the process.                                20 FRANCE                     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.  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
         Animal grease and oils or vegetal and                               in Brussels and signed on 9 December 2006. The new
3        its products                               1,001.39    46,888.78
                                                                             CEFTA treaty took effect on  May 2007. The enlarged
4        Prepared food; drinks, alcoholic           39,962.77   288,572.26   CEFTA is consolidating the network of bilateral free trade
         beverages and tobacco
                                                                             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.
7        Plastic and its products; tire and its     7,823.99    139,850.65
         products
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 2,
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
         Works of art, collection and antics                                 above agreement, are abolished since May 2007, when
21       pieces                                     91.10       506.11
                                                                             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 2, 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 , 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 0 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 34
while for others customs duties will be continually reduced                  e-mail: info@albinvest.gov.al
until they are also eliminated.                                              website: www.albinvest.gov.al




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