International Trade Law
As summarized in the general indicator table at the beginning of this report, Macedonia has a population of 2.04 million, with a GDP per capita of $3,800. Macedonia's foreign trade is predominantly with the European Union, followed by the countries of Southeastern Europe, and the U.S. Exports in 1998 measured $1.2 billion, with food, beverages, clothing and textiles, iron, and steel destined for Germany (21%), Serbia and Montenegro (18%), United States (13%), Greece (7%), and Italy (6%). Imports included machinery and equipment, chemicals, fuels, and consumption goods, valued at $1.56 billion. Import partners include Germany (13%), Serbia and Montenegro (13%), Slovenia (8%), Ukraine (6%), and Italy (6%). Overall trade was severely affected by the Kosovo crisis in the first months of 1999 however, with total exports falling to 75% of 1998 levels and total imports falling to 80% of 1998 levels. Gross official reserves declined by $14 million.
Multilateral and bilateral trade agreements continue to be the principle means towards achieving greater trade liberalization. In addition to ongoing work aimed at WTO accession, Macedonia has negotiated a number of trade agreements with neighboring countries, such as FRY (1996), Slovenia (1996), Croatia (1997), Turkey (1999), Bulgaria (1999), and United States (1996). Macedonia is currently negotiating similar agreements with Albania, Romania, Bosnia and Herzegovina, and Ukraine. Macedonia continues to work for regional trade agreements, with plans to initiate negotiations for the Stabilization Association agreement with the EU in 2000.
Access to international markets is particularly important for Macedonian businesses and consumers both because of the dramatic shrinkage in its domestic market and because of Macedonia's landlocked situation in the southern Balkans, surrounded by the Federal Republic of Yugoslavia (specifically, Kosovo and Serbia), Bulgaria, Greece, and Albania.
The placing of sanctions on Bosnia and on Serbia and Montenegro by the international community in 1991, and of an economic blockade by Greece in 1994 (both of which have since been lifted), served to seriously isolate Macedonia from international commerce. Both Serbia and Greece connect with Macedonia's principal transportation corridor and also serve as major markets for exports. Linkages with and markets in Bulgaria and Albania are less well developed, although some coordinated international development efforts are underway to improve this situation.
WTO accession is requiring many serious changes in Macedonia's legal regime, and in the ways key ministries, agencies, and the judicial system operate.
