China, Serbia slash tariffs in landmark trade deal
- Agreement would zero out tariffs for 90 per cent of each country’s imported goods, benefit China’s carmakers and Serbia’s honey producers
- Deal signed as European Union continues push to de-risk and diversify supply chains to reduce dependence on China
China and Serbia have agreed to remove tariffs on up to 90 per cent of each other’s imported goods in a free-trade agreement signed as President Xi Jinping hailed the country as an “ironclad friend”.
It marked Beijing’s first free-trade deal struck with a country in Central and Eastern Europe, and the fourth with a European country after Switzerland, Iceland and Georgia.
The accord also came at a time when Beijing aims to widen its global trade network to counter external headwinds and ensure its footing in the global supply chain. The European Union (EU) and the US, meanwhile, are seeking to de-risk to limit their reliance on the world’s second-largest economy.
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“China and Serbia will realise high-level opening up to each other via the free trade deal, set up new institutional arrangements for bilateral trade and economic cooperation, and create a more preferential, convenient, transparent and stable business environment,” China’s Ministry of Commerce said on Wednesday, adding the deal will “promote investment, forge closer supply chains and enhance global competitiveness”.
Bilateral trade rose one-tenth in 2022 to US$3.56 billion from the previous year, official data showed. China is Serbia’s second-largest trading partner, after the EU.
China’s exports of automobiles, photovoltaic modules, lithium batteries and telecoms equipment will enjoy zero tariffs once the deal takes effect, down from the current rate of 5 to 20 per cent. Serbia’s power generators, electric motors, tires, beef, honey and other agricultural products will also be free of import tariffs upon entering the Chinese market.
