Fewer local products on the shelves in Bosnia and Herzegovina

Due to the requirements of the European Union, traders in the Federation on the shelves no longer have to have a minimum of 50 percent of domestic products.

By Mario Pejovic

Producers in Bosnia and Herzegovina almost daily complain that the state does not help enough and that are disadvantaged compared to foreign competition. New plans for the Federal Government to repeal the provision of the Law on Internal Trade, which was to oblige traders to the shelves have 50 percent of the products of domestic manufacturers, are in favor of such an attitude.Although it sounds like a decision that will badly affect the producers in Bosnia and Herzegovina, they themselves are neither surprised nor particularly worried.

"Deleting the above provision will have no impact on domestic producers, because this provision was never implemented. This has been a dead letter," says Admir Kapo, president of the Association "Buy Domestic".He adds that it is questionable how much the inspection authorities imposed penalties, especially foreign shopping centers, due to failure to implement the above provisions.Economic analyst Admir Čavalić notes that data provision is applied properly and consistently followed in current commercial practice, because there was a lot of legal ambiguities and room for manipulation, indicating that its deletion of the long term there will be negative consequences for domestic producers.

OBLIGATIONS OF STATE

According to the most favored nation clause, a member of the WTO is compulsory to all other States to treat as one the most favored, as well as products from the member countries approved treatment equal to the most favorable. Furthermore, the national treatment clause forbids discrimination between domestic and imported goods and services, or discrimination between domestic and foreign suppliers and holders of intellectual property rights, says Čavalić."Although large countries because of their own domestic pressures (lobbying groups, the public, etc.) have a privileged position in trade negotiations and a higher level of protectionism, but that did not diminish the positive effects of trade liberalization for a small, underdeveloped countries and countries in the developing world."

Čavalić adds that it is a relatively new legal solution whose implementation from the very beginning was questionable, primarily due to unclear regulations specified and fetched base of 50 percent of domestic products on the shelves.Good intentions and poor implementation"This provision is a classic example of the law which was passed with good intentions, but with catastrophic realization, which is ultimately discarded in accordance with the process of EU integration."FBiH Government provision should delete to BiH fulfilled the obligations under the Stabilisation and Association Agreement and free trade agreements, as well as the removal of obstacles in the negotiations BiH to join the World Trade Organization (WTO).

President of the Association "Buy Domestic" states that local retailers have an understanding, but more or less meet the domestic manufacturers, "while foreign shopping centers were ruthless.""Some side chains are owed to domestic producers tens of millions of EUR. I'm afraid that our company will never charge, and it would be important to check how many at this moment page malls owe our manufacturers," said Kapo.Čavalić points out that for a country vital to protect domestic producers, but not through protectionism, but by improving the business environment for the domestic economy.

Economic analyst cites the example of the neighboring Croatian, in which the passage of laws that seek to improve the bargaining position of small producers in relation to major retail chains."To improve the legislation, reduce state taxes and generally ease the process of business, is one of the activities that are permitted in accordance with commitments under trade agreements BiH."

protectionist measures

He added that the foregoing provision of protectionist measures which are not used in neighboring countries, primarily in Serbia and Croatia.In particular, in Serbia, the majority of retail chains is in foreign ownership, which is a significant obstacle to the adoption of protective measures to ensure a certain percentage of local products on store shelves. On the other hand, Croatia is a member of the European Union and a longtime member of the World Trade Organization, which it automatically disables this form of protectionism, he said.

"Certainly there are other protectionist measures, but their influence is minimized in the past few decades, according to the CEFTA agreement, EU integration, the pressures of other global institutions like the IMF or the WTO."He added that in all countries there is a fear of foreign products on the shelves and it is often misused for political populism."Unfortunately, BiH has perhaps gone furthest on the item, and this in the form of vague provisions that simple, de facto and de jure now see, failed to stop the global trend of trade liberalization."BiH producers see salvation in changing awareness to customers and vendors.Admir Kapo notes that in the region and the countries of the European Union traders good care of what they will find on the shelves.

PURPOSE WTO-A

The World Trade Organization is primarily interested in the elimination of trade barriers (tariff and non-tariff barriers), in what is a very successful, because in the last 20 years has done a lot on the liberalization of world trade, which consequently leads to overall economic progress, said economic analyst Admir Čavalić.

"I know from personal experience that we lobbied for the export of certain products from BiH that is difficult, almost impossible, that we embroider in serious quantities of any product, because they protect their own. It creates the impression that in our country import what they want in huge quantities while domestic producers have a problem to sell their goods. "For him, the non-tariff barriers and price dumping, especially with neighboring countries, different story."If they try and introduce a similar measure, as we are working neighbors immediately to politics have tainted his fingers and spoke to the vulnerability of the nation. Unfortunately."

market liberalization

Economic analyst recalls that any liberalization of the market increases the level of competition, which leads to the development of the economic potential of a country."For the BiH economy, trade liberalization is an opportunity, not a threat, taking into account the size and potential of our most important trading partners."A wanted it or not, Bosnia and Herzegovina must be adjusted to the higher powers.

Čavalić emphasizes that trade policy BiH primarily conditioned by the process of EU integration, and the provisions of the Stabilization and Association Agreement. Joining the EU means absolute trade liberalization with the EU member states, which are the largest trading partners of Bosnia and Herzegovina, which is why the European Commission and asked for deletion of controversial protectionist provisions.

"The EU, unlike the WTO has a lot stronger negotiating power when it comes to BiH, but also in general because it is primarily a economic union, which dictates certain rules of entry, as a candidate country must necessarily accept it. On the other hand, BiH still not a full member of the WTO, so that the legislation is not fully harmonized. "Čavalić states that, according to the results of numerous studies, free trade leads to an increase in economic growth, income, competitiveness and productivity of the less developed countries.

"Trade protectionism is an economic policy that culminated in the mid-20th century, but from then onwards, an increasing number of countries leaving protectionist measures and that for the sake of clean, economic interests arising from the accession to the world trade flows."

• 7 Aug, 2016
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