The Western Balkans Common Regional Market – a catalyst for deeper regional economic integration and a stepping stone towards EU Single Market
At the Sofia Summit on 10 November 2020, the leaders of the Western Balkans recognised the need to better integrate economically the Western Balkans – amongst themselves and with the EU.
They launched the Common Regional Market initiative, which is structured around the four freedoms (free movement of goods, services, capital and people) while also covering aspects of digital, investment, innovation and industry policy. This makes it the most ambitious regional integration effort to date in the Western Balkans.
The Common Regional Market represents a stepping-stone to integrate the region more closely with the EU Single Market already before accession. This is key for the region to leverage its privileged relation with the EU. Regional economic integration based on EU rules and closer association to the EU Single Market will help the Western Balkans in the accession process. At the same time, the accession process and the gradual compliance with the EU acquis will help strengthen intra-regional integration.
Building a common market of 18 million people – potential game changer for the region
The Common Regional Market action plan aims to address the current economic fragmentation of the region. As an example, trucks spend 28 million hours waiting at borders every year – a burden that costs 1% of the region’s GDP. Building a common market of 18 million people, functioning on the basis of EU rules, could be a game changer for the Western Balkans and would benefit both the region and the EU. For example:
- it increases the benefits of the big infrastructure projects (which require a minimum level of market integration within the region)
- it builds on the regulatory convergence process (acquis alignment) in which the entire region is engaged
- it has the potential to make the region a more attractive investment destination, able to benefit from nearshoring opportunities emerging from the pandemic context
The Common Regional Market action plan for 2020-2024 adopted in Sofia specifies tangible and concrete results. Deliverables should be reachable within two to three years and include for example:
- Travel within the region with an ID card only
- Facilitate trade of food products and industrial goods through mutual recognition agreements: if one product is good enough for a national market, it is good enough for the region
- Increased possibilities for professionals to work and students to study throughout the region
- Lower costs for regional payments
- Development of a regional digital market (e-commerce, 5G, digital services, data economy)
- Smoothen border crossings by expanding the green lanes initiative to cut the waiting time at the borders to 70% of the current waiting times
Regional organisations play an important role
The Regional Cooperation Council (RCC), the Central European Free Trade Association (CEFTA), the Energy Community and the Western Balkans Transport Community play a prominent role in coordinating and supporting the Western Balkans in this endeavour. The European Commission (Directorate-General for Neighbourhood and Enlargement Negotiations - DG NEAR) works closely with all these organisations, and gives them political as well as financial and technical support.
Private sector involvement is key
The private sector plays an important role in supporting the socio-economic transformation of the Western Balkans. With the Common Regional Market, it will be able to benefit from increased opportunities generated by the free movement of goods, services, people and capital within the region. Private sector representatives, notably Chambers of Commerce, therefore play a crucial role in the implementation of the Common regional market action plan.
Read more about the regional organisations and more about the Common Regional Market using the following links: