Agreement with Croatia enters into force today

The Stabilisation and Association Agreement with Croatia enters into force today

The Stabilisation and Association Agreement is an essential cornerstone of the EU’s Stabilisation and Association Process for the region.[1] The SAA is the first comprehensive Agreement between the EU and Croatia, similar to the “Europe Agreements” with previous candidate countries.

The SAA will provide the contractual framework for relations between the EU and Croatia during the pre-accession period and covers areas such as:

• Political dialogue;
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• Regional cooperation;
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• The four freedoms, with the creation of a free trade area by 2007 for industrial products and most agricultural products;
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• Approximation of Croatian legislation to the Community acquis, including precise rules in the fields of competition, intellectual property rights and public procurement;
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• Wide-ranging cooperation in all areas of Community policies, including in the area of justice and home affairs.
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The full implementation of the SAA will help Croatia in its preparations for EU-membership. Conversely, progress in the accession negotiations will also be dependent on Croatia’s fulfilment of its commitments under the SAA. The Commission will continue to help Croatia in the implementation of the Agreement with technical advice and financial assistance.

A new set of joint bodies will be established, at ministerial level (Stabilisation and Association Council), at high officials level (Stabilisation and Association Committee) and at technical level (Subcommittees).

Background on relations between the EU and Croatia:

The Stabilisation and Association Agreement (SAA) with Croatia was signed on
29 October 2001. An Enlargement Protocol, necessary to take into account the accession of ten New Member States on 1st May 2004, was signed on 21 December 2004. The SAA and its Enlargement Protocol replace an Interim Agreement on trade and trade-related provisions in force since 1 March 2002 as well as an Enlargement Protocol to the Interim Agreement.

Croatia applied for EU membership in February 2003. In April 2004, the European Commission issued a positive opinion (‘avis’) (see IP/04/507) on this application and recommended the opening of accession negotiations. This recommendation was endorsed by the June 2004 European Council who decided that Croatia was a candidate country and that the accession process should be launched. The December 2004 European Council requested the Council to agree on a negotiating framework with a view to opening the accession negotiations with Croatia on
17 March 2005 provided that there is full cooperation with ICTY.

Background on the trade provisions of the SAA:

The trade provisions of the SAA are asymmetrically in favour of Croatia. This means that the EU has granted Croatia unlimited duty free access to the market of the enlarged Union for virtually all products. This is important for Croatian exporters as about 70% of Croatia’s trade is with the enlarged Union. The only exceptions are baby-beef, fisheries and wine products for which tariff quotas remain. On the Croatian side, tariffs for industrial products will be phased out until 2007. Also tariffs for agricultural products are reduced but remain for a number of sensitive products.

The Enlargement Protocol does not change this pattern. It was a technical exercise which increased remaining tariff quotas in order to take into account traditional trade between Croatia and the new Member States. The quotas for fisheries and wine products from Croatia have thus been increased providing new export opportunities for Croatia.

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[1] Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Serbia and Montenegro (including Kosovo as defined by UNSC 1244). The SAA with Croatia is the second Agreement to enter into force (the SAA with the former Yugoslav Republic of Macedonia entered into force on 1 April 2004).

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