The Minister of Trade and Economic Relations of Bosnia and Herzegovina, Mirko Sarovic, on Monday confirmed that authorities in his country were prepared to adapt a temporary trade agreement with the European Union so that it could be applied to products from Croatia, however, he underscored that changes had to be gradual so as not to jeopardise Bosnian food producers.

Sarovic told reporters in Sarajevo that negotiations with the European Commission would commence this month concerning this issue but he could not specify when the negotiations might be concluded. "It will be difficult to end them in January. The negotiating team is travelling to Brussels in the middle of the month for technical consultations and the team is now working on the negotiation position that will be presented to the Bosnian Presidency and Council of Ministers," Sarovic explained.

The adjustment would in fact mean opening the market to Croatian products with a specifically defined quota for food products that could then be exported to Bosnia and Herzegovina customs-free, as is the case with other European Union member states.

Sarovic said that in this specific case, mere technical adjustment was not an option for authorities in Bosnia and Herzegovina. "In these negotiations Bosnia and Herzegovina wishes to seek protection, particularly for food of animal origin," Sarovic said.

He stressed that the adjustment of the Stabilisation and Association Agreement (SAA) should be conducted in stages allowing for a gradual adaptation so that Bosnia and Herzegovina could "manage to bare the brunt," of opening up its market.

"If we were to immediately agree to a complete adaptation, that would dramatically deteriorate the position of agricultural producers in Bosnia and Herzegovina as we do not have any protective mechanisms or incentives," he said.

Since Croatia's EU accession, the European Commission has been requesting Bosnia and Herzegovina to adapt its temporary trade agreement however there has not been any results in that regard.

"We have been negotiating with them (EU) for two and a half years and the key factor is Bosnia and Herzegovina's ambition to apply for candidate status for EU membership," Sarovic said, explaining that Brussels had clearly advised authorities in Sarajevo that if that is what they wanted, they had to finally start setting up mechanisms to coordinate relations with the EU and adjust the SAA to the fact that Croatia had entered the Union.

As of 1 January export incentive measures ceased for certain agricultural products from Bosnia and Herzegovina on the EU market, which is directly related to the adjustment of the SAA and Sarovic estimates that "suspended" customs-free exports from Bosnia and Herzegovina amount to around five to six million convertible marks per year. On the other hand, Bosnia's "hard-line" blocking customs-free imports from Croatia has meant an extra 25 to 30 million euro on the year.

Sarovic said that Bosnia and Herzegovina would certainly apply for the EU candidate status before the end of June, however, he warned that the question of adapting the temporary trade agreement would be a priority in that regard.

Sarovic added that the project of constructing a trunk gas pipeline to connect Bosnia and Herzegovina with Croatia's gas grid was not "dead". That would mean that Bosnia and Herzegovina would be connected via Croatia to the European gas network and would no longer be solely dependent on Russian gas as it is now.

Authorities in the Republika Srpska (RS), the Serb entity in Bosnia and Herzegovina, have objected to the construction of the Zenica-Slavonski Brod gas pipeline, particularly the entity's president Milorad Dodik. 

Sarovic confirmed that the European Union was prepared to earmark around one million euros to prepare the necessary documents for the construction of the pipeline. Sarovic added that he believed that changes on the geo-political scene could inspire authorities in Bosnia and Herzegovina to activate the construction of the pipeline toward Croatia.

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