BizCLIR

Trade issues were addressed by a separate study and analysis under a different task order. Our team noted several issues, two of which are addressed here.

First, the trade regime continues to be protective of local industry. There also appears to be much support for this protection at the grass roots level. The breakdown of the old order, in which large companies had pre-arranged relations with suppliers and buyers, has left most of the public enterprises in dire straits. They have been unable to adjust to the market. Fear of bankruptcy and layoffs seem to fuel strong support for protectionism, and may limit the strength and appearance of political will for truly open trade. Highly convincing public education on the benefits of an open trade regime should be considered for all trade programs both to build support for and reduce resistance to reform.

Second, the licensing regime, though simplified, is still a constraint on companies wishing to do import and export business. On the positive side, Yugoslavia has eliminated or simplified the requirements for export and import licenses, so that companies need no longer go through expensive and time-consuming application procedures for commercial import and export licenses. On the other hand, other licenses are still very cumbersome and subject to discretionary application of laws. This results in increased costs, reduced productivity, and can be a tool for unfair competition by manipulation of the licensing bureaus in favor of one actor at the expense of others.

A number of lawyers who represent local importers and exporters commented on the need for reform in customs as well as substantial training and education. As our team was not addressing these issues, we did not go into any depth but merely note the observations for use by others.