Croatia's accession to the EU will change the rules for regional cooperation beyond the Central European Free Trade Agreement (CEFTA). While some treaties involving EU competence will need to change or lapse, the underlying economic rationales for cooperation will remain. Regional cooperation was developed as part of the Stabilization and Association Process and brings political and economic benefits by increasing market size and addressing similar policy challenges. Going forward, "soft" cooperation initiatives can continue alongside strategies encompassing the Western Balkans. Businesses remain committed to cooperation while governments and businesses will need to better define new opportunities for small and medium enterprises.

1. Croatia after accession:
regional cooperation beyond
CEFTA
Peter Polajnar
European Commission
DG Enlargement

2. Regional cooperation
Concept developed by the Stabilisation and Association Process.
• Political and economic rationales
Western Balkans:
Conditionality for accession– part of SAA contractual
obligations
EU countries:
Invited to take part, host initiatives, provide funds, apoint
experts

3. EEconomicconomic
rationalesrationales
→ Fragmented markets. Need to find
economies of scale and scope.
→ Similar level of economic development,
similar policy challenges.
→ Investors perception. Investors demands
(cross border infrastructure).
→ Economic cooperation ground for political
cooperation.
→ Already existent high level of trade
integration (20%)

4. EvolvingEvolving
ThessalonikiThessaloniki
agendaagenda
20032003
Treaties
→CEFTA
→Energy Community
→SEETO (Transport Community)
Initaitives
→SEECEL
→ERISEE
→eSEE Agenda
→SEE Investment Committee, SME Policy Inde
RCC

5. Regional cooperation – Changes
after 1 July 2013
• Rules will changes – strict application of EU standards at HR border
and within HR.
• Treaties which concern EU competence need to change / lapse.
– The underlying economic rationale will remain.
• "Soft" initiatives can and should remain.

6. Regional cooperation – way
ahead
Strong political commitment to continuous regional cooperation.
But this can also change occasionally (Greece, Slovenia)???
Region will be observing if political and economic reforms in Croatia
pay off.
EU partners expect constructive behaviour.
Further development of EU strategies which encompass the Western
Balkans (Danube, Adriatic). Capacity to engage and organise non-EU
neighbours. Funds available.

7. Regional cooperation – way
ahead
• Businesses fully comitted (HR FDI 80% to BiH and SR. The
Economist: Yugosphere)
• Regional competitive edge established in food industry. But
commodities dominate trade and manufacturing not evolving.
• Will business find other niches? Can the existing initiatives support
them or should they develop new ones?
• Beyond EU and CEFTA: Value chains going Turkey, Balkans, EU;
Serbian FTA with Russia.

8. Regional cooperation –
conclusions
It used to be top down, now bottom up.
Functionality more important than inclusiveness.
More opportunities as more EU funds available, more room for SMEs.
o Businesses and governments need to better define and artιculate
ideas. So far ….
o Economic crisis significant negative factor.

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