COVER STORY
EU Support for Private
Sector Readiness
Freek Janmaat,
Head of the Section for Economic Development, Institution Building and Cross Border Cooperation,
EU Delegation in Skopje
A
s we all know, 2019 will be an important
year for North Macedonia. In January, the
Parliament endorsed the changes to the
constitution following the agreement with Greece
on the name. As the Greek Parliament also
supported the agreement, the start of EU
accession negotiations could take place already
this year. For this to happen, the European
Council (consisting of all Member States of the
EU) will have to give its green light, looking also at
the reforms and policies in key areas such as the
rule of law and public administration. What does
this European Integration process entail for
companies, what are the advantages and
challenges?
The actual process will be gradual, meaning that
companies will not immediately notice big
differences with the start of accession
negotiations. Already since 2004, Macedonian
companies can freely export many products to
the EU thanks to the Stabilisation and Association
Agreement (SAA). This is the free trade agreement
between the country and the EU. Although it is
understandable that much attention in the public
debate is paid to the opening of accession
negotiations, it is perhaps less well known, and
sometimes taken for granted, what substantial
advantages the SAA already brings to the country
and its private sector.
Stabilization and Association Agreement
The SAA goes much beyond a regular free trade
agreement.
Besides tariff reduction and
elimination, it ensures gradual, legally binding
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EMERGING MACEDONIA
alignment with EU standards and policies in
important trade related areas such as competition,
intellectual property rights, public procurement,
consumer protection, etc. This in turn facilitates
domestic companies’ access to the EU’s internal
market. Vice versa, the gradual process of the
local market opening to EU companies led to
more competition in the country. This benefitted
citizens,
but
also
strengthened
the
competitiveness of firms. Over the years, thanks
to the SAA, domestic companies have proved to
be able to find their way to the EU’s market and
substantially increased sales of local goods and
services, illustrated by the fact that around 70%
of the country’s exports now go to the EU. The
ability to freely export to a market of half a billion
people has also ensured substantial foreign
direct investment into the country, both from the
EU and other countries, with positive spill over
effects on the activities of local firms and
employment.
On the 4th of December last year, the second
phase of the SAA entered into force. This means
that domestic legislation will be further