After two days of talks on free trade between Croatia and the Federal Republic of Yugoslavia, Olgica Spevec, aide to the Croatian Economy Minister and her Yugoslav counterpart Dejan Jovovic, announced on Wednesday that the agreement had finally been initialled.

According to Spevec, initialling the deal has ended the expert part of the negotiations, and now it is up to the governments to confirm the agreement. "With this, we have completed our task for the businesses interested in the Yugoslav markets, and now it is up to them to find connections with partners on those markets". While the agreement itself will not increase trade, it would open doors to more favourable trade possibilities, said Spevec.

The agreement outlines a transition period until 2007, by which time all tariffs on industrial products will be removed. In the first phase, 70% of the least sensitive industrial goods will be tariff free, while tariffs will be removed from the remaining products during the transition period. Both sides emphasised that the deal is very significant for overall political and economic co-operation, and will significantly influence the liberalisation of trade between the two countries.

The agreement is expected to be signed within the next month, and should come into effect in the first quarter of 2003.

(NewsBase 11.xi.02)