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UPDATE 2 - Serbia, Bosnia plan no countermeasures after Kosovo hikes import tax

UPDATE 2 - Serbia, Bosnia plan no countermeasures after Kosovo hikes import tax Bosnia and Herzegovina flags; Author: Jennifer Boyer; License: CC BY 2.0

SARAJEVO (Bosnia and Herzegovina), November 22 (SeeNews) – Bosnia's government said on Thursday it will not impose countermeasures in response to Kosovo's decision to increase the import tax levied on all goods produced in Serbia and Bosnia to 100% from 10% set earlier this month.

Bosnia is calling on the European Commission to intervene to help resolve the problem but does not plan to introduce any countermeasures for now, the country's government said in a statement. 

Kosovo needs to urgently withdraw its decision to increase the import tax, as it violates the CEFTA agreement, the government said.

Serbia's president Aleksandar Vucic said in a statement on Wednesday that Belgrade will impose no countermeasures in response to Kosovo's decision as it wants to remain a reliable partner in the process of establishing peace and stability in the region.

"I ask the Albanians to understand that we need peace, not escalation. Please, withdraw these decisions," Vucic said.

Kosovo's government said on Wednesday it would increase the import tax on all goods produced in Serbia and Bosnia to 100% with immediate effect to protect the country's sovereignty and interests. 

The decision immediately drew fire from the European Union. "It further exacerbates the situation following the initial imposition of 10% tax increase last week. The Kosovo government has to immediately revoke these decisions," the EU's foreign policy chief, Federica Mogherini said in a press release on Wednesday.

Serbia and Bosnia both do not recognise the independence of Kosovo, the former southern province of Serbia populated predominantly by ethnic Albanians.

Most of Kosovo's imports orginate in Serbia - around 450 million euro ($512 million) in 2017, whereas imports from Bosnia amount to around 82 million euro, according to data from Kosovo’s statistical office. Foodstuffs and beverages make up the bulk of Kosovo's imports from both countries.

($ = 0.876181 euro)

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