Faculty of Law at the University of Belgrade Master in European Integration

Practical Skills Essay

KEY ASPECTS OF THE STABILIZATION AND ASSOCIATION AGREEMENT AND ITS PROCEDURE

Professors: Stevan Lilic, PhD Sima Avramovic, PhD Milena Djordjevic, LLM

Student: Bojana Nedovic

Belgrade, June 2011

TABLE OF CONTENTS:

ABSTRACT:.......................................................................................................................................................2 1. INTRODUCTION..........................................................................................................................................3 2. THE STABILIZATION AND ASSOCIATION PROCESS.......................................................................4 3. THE STRUCTURE OF THE STABILIZATION AND ASSOCIATION AGREEMENT ........5 4. REGIONAL COOPERATION.....................................................................................................................6 5. CHELLENGES...............................................................................................................................................7 6. THE INTERIM AGREEMENT....................................................................................................................8 7. BENEFITS OF THE STABILIZATION AND ASSOCIATION AGREEMENT....................................9 8. CONCLUSION.............................................................................................................................................10 9. REFERENCES: ...........................................................................................................................................11

Abstract:

The Stabilization and Association Agreement belongs to a third generation of European agreements, which is offered exclusively to the Western Balkan countries, as a part of the Stabilization and Association Process. This agreement is an international agreement that is superior to domestic law, and it represents a binding document for all levels of government in the country. This paper covers few aspects of this agreement, as well as its benefits and challenges. Key words: Stabilization and Association Process, Stabilization and Association Agreement, Regional Cooperation, Interim Agreement.

1. INTRODUCTION
There is no doubt that Place of Serbia in the European integration process, is an inexhaustible subject in the current political and social life of the country. The revolution that took place on 05 October 20001 has greatly contributed to this development, and Serbia, only a month later, was participating at the summit in Zagreb2, which brought together heads of State and Government of the European Union (Hereinafter referred to as: EU) and the Western Balkan countries (Croatia, Montenegro, Bosnia and Herzegovina, Serbia, Macedonia, Albania). This participation was a step forward in relations between the EU and Balkan region. In the Declaration, issued on that occasion, was underlined that progress of each country towards the EU depends on individual progress in meeting the Copenhagen criteria and the implementation of the Stabilization and Association Agreement (Hereinafter referred to as: SAA) with the special attention to the provisions on regional cooperation. In this sense, it was pointed out that accession to the EU, which has become an objective of all countries of the region, will proceed in parallel with improvement of regional
1

Democratic revolution in Serbia, Zagreb summit,

http://www.beograd.rs/cms/view.php?id=1275, 12 June 2011.

2

http://ec.europa.eu/enlargement/enlargement_process/accession_process/how_does_a_country_join_the_eu/ sap/zagreb_summit_en.htm, 12 June 2011.

cooperation.3 The European Commission gave greatest contribution to all this by promoting the process of the Stabilization and Association as an innovated policy framework for improving relations between the Western Balkan and the EU on May 1999.4

2. THE STABILIZATION AND ASSOCIATION PROCESS

On the one hand, the Stabilization and Association process reaffirms previous goals of EU policy with the addition of peace and stability, democracy and the rule of law, respect human and minority rights, economic prosperity and on the other hand Stabilization and Association process is trying to make more certain the European perspective of the region. These objectives can be achieved by improving bilateral relations among the EU and the Western Balkan country, and by improving cooperation in the region. In that sense the Stabilization and Association process consists of two equally important and interacting dimensions - bilateral and regional. Starting from the regional and individual characteristics, the EU has defined a number of instruments which seek to achieve above mentioned. Within these instruments are: The SAA Promoting economic and trade relations (through a system of autonomous trade measures and regional free trade area) Financial and technical assistance (PHARE and OBNOVA) Improving support for democracy, civil society, education and construction institutions Enhancing cooperation in various areas such as cooperation in the field of Home Affairs and Justice Strengthen political dialogue particularly on a regional basis Encouraging regional cooperation by supporting the Stability Pact for South East Europe, Process of cooperation in South East Europe and other regional initiatives.5
3 4 5

Ibid. B. Budimir, V. Medjak, Pridruzivanje Srbije Evropskoj Uniji, ISAC fond, Beograd, 2010, 28. Ibid.

3. THE STRUCTURE OF THE STABILIZATION AND ASSOCIATION AGREEMENT

The SAA, which in the case of Serbia was initialed on 07 November 2007 and signed on 29 April 2008 in Luxembourg6, is a continuation of the evolution of the association Agreement that the EU signs with third countries and the material is most elaborate in comparison with its predecessors. The SAA is a special form of the association Agreement, which creates a basis for improving relations and establishes the highest form of cooperation between the countries, which signed the SAA, and the EU. It is a standard Agreement and its structure is similar for all countries, which in addition to the preamble and general principles contains nine sections that carry the following titles: Political dialogue Regional cooperation Free movement of goods Movement of workers, establishment, services, capital movement Harmonization of regulations, their implementation and rules of competition Justice, Freedom and Security Policy cooperation Financial cooperation and Institutional, general and final provisions.7

The integral parts of this Agreement are the annexes, protocols and joint and unilateral Declarations. Simply reviewing the above sections, it is clear that these agreements promote political, economic and trade relations between the partners, provide a gradual harmonization of legislation with the acquis and provide or promote cooperation in various
6

Serbia - EU relations,

http://ec.europa.eu/enlargement/potential-candidate-countries/serbia/eu_serbia_relations_en.htm, 12 June 2011.

7

The Western Balkan countries on the road to the EU,

http://ec.europa.eu/enlargement/enlargement_process/accession_process/how_does_a_country_join_the_eu/ sap/history_en.htm, 12 June 2011.

fields. These Agreements will help to establish and strengthen a stable European order based on the EU. Political, economic and institutional stabilization of the Western Balkan, and the entire region, is also one of the key objectives of the SAA. Achieving this objective implies democratization, rule of law, respect human and minority rights, civil service reform and institution building, promotion of cooperation in economic and other areas such as justice and home affairs. Name of agreement, however, suggests that his focus is not only on stabilization but also on the association, which represents a form of cooperation which would be gradually intensified and fully realized at the end of the transition period that is designated by agreement. The term association considers: Improvement of political relations between the parties by creating an appropriate institutional framework for political dialogue Incitement of the reform process in the field of establishing a competitive economy market and development of harmonious economic relations and cooperation, with the prospect of establishing a free trade Incitement of regional cooperation.8

4. REGIONAL COOPERATION
Regional cooperation among countries of the Western Balkan is extremely advanced during the last 11 years. Progress has been significant not only because it is turbulent area that survived a series of wars, but also because the efforts which helped that conflict was been overcome included the many parties. Except the Western Balkan countries, among which the conflict is originally started, in conflict resolution a significant proportion had the EU and its member states, international financial institutions, and other countries and organizations. Today, countries in the region participate in the Regional Cooperation Council (Hereinafter referred to as: RCC) that emerged from the Stability Pact for South Eastern Europe. The RSS started operating in February 2008. Secretariat of the body is located in Sarajevo, and is financed from the budgets of the region (a third of expenditures), pre-accession funds (also one third) and
8

B. Budimir, V. Medjak, Pridruzivanje Srbije Evropskoj Uniji, ISAC fond, Beograd, 2010, 32.

individual countries and donors (the rest). Priorities that will be implemented through the RCC are the following areas: Economic Development - Regional trade, domestic and foreign investment Infrastructure - transportation, energy, and those which concerning environmental protection Justice and home affairs, particularly the fight against organized crime and corruption, including support for strengthening ties between the SECI Regional Centre for the fight over border crime and Europol Cooperation in the field of security Strengthening human resources, primarily the inclusion into the European mainstream in education and scientific and technological research and Parliamentary cooperation as an "umbrella" priority.9

Those countries also participate in regional free trade zone - CEFTA 2006, and they signed Energy Community Treaty for Southeast Europe. Key agreements are also: The multilateral agreement on the establishment of European Common Aviation Area, Cooperation in the field of transport (which led to the development of basic road network in the regionconnection to the main pan-European corridors), Regional Anti-Corruption Initiative, Disaster Preparedness Prevention Initiative for South Eastern Europe, Regional Arms Control Verification and Implementation Assistance Centre - RACVIAC, Police forum SEPCA.10

5. CHELLENGES
It seems that the challenges are equally numerous as a successes, when the SAA is in question. Among the countries, there are still important open problems. There are different views on the unilateral declaration of independence of the Serbian southern province of Kosovo which further hampers cooperation between countries. All countries except Bosnia and Herzegovina and Serbia, of course, recognized the newly created state.11 Region has
9

M. Delevic et al., Izazovi Evropskih integracija, Sluzbeni glasnik, Beograd, 2010, 13. Ibid., 15. Ibid.

10 11

inherited a lot of social problems arising from the breakup of Yugoslavia and the wars that followed - high unemployment (especially among youth, lower education and women). Infrastructure is neglected and therefore requires large investments. Economic crisis will topple dynamic rates of economic growth and create new problems. All these internal and external factors complicate the implementation of reforms necessary for joining the EU. Situation in the EU also affects the integration of Western Balkan. The EU is facing with economic crisis, uncertainty about the future of the Lisbon Treaty and the expansion of EU to the 27 members.12

6. THE INTERIM AGREEMENT

Due to the fact that the SAA, on behalf of the EU, was signed by the European Community and all Member States, procedure of its effectiveness is very complicated and timeconsuming. Given that all parties must ratify the treaty (The European Community, 27 Member States and potential party) process sometimes takes up to three years. To address this complex and lengthy procedures, from the SAA was taken the parts of the text which are under the jurisdiction of the EU and was formed The Interim Agreement whose entry into force not required ratification of the Member States, but only the EU and potential signatories. This Agreement is signed on the same day as the SAA, and should come into force usually two to three months after the signing, so we can conclude that Serbia and the EU were signed this agreement on 29 April 2008, like we previously said.13 The most important economic provisions which enter into force by this Agreement should cease to apply from the moment when the SAA entry into force, than the SAA takes over all further obligations and rights. The SAA is concluded for an indefinite period of time and regulates the relations of the Contracting Party and the EU, until the potential country joins the EU or until it signs a new agreement which would replace the SSA.14
12 13

Ibid., 16. Serbia-EU relations,

http://ec.europa.eu/enlargement/potential-candidate-countries/serbia/eu_serbia_relations_en.htm, 12 June 2011.

14

B. Budimir, V. Medjak, Pridruzivanje Srbije Evropskoj Uniji, ISAC fond, Beograd, 2010, 50.

After the Interim Agreement enters into force, the Monitoring Committee of the Interim Agreement (Interim Committee) will take into account its implementation with the same powers and composition as well as the Board of Stabilization and Association process. The Interim Committee may form sub-committees in charge of the area covered by the Interim Agreement. Those subcommittees are: Subcommittee on Trade, industry, customs, taxes and cooperation with other countries Subcommittee on Agriculture and Fisheries Subcommittee on Internal Market and Competition Subcommittee on Economic and Financial Affairs and Statistics Subcommittee on transportation15

After the entry into force of the SAA, there will be formed other subcommittees. The next step, after the adoption of the Interim Agreement, is submitting the application for membership. It is necessary that candidate state which applies for membership, before submitting a nomination, demonstrate that it is able to correctly and fully implement obligations under the Interim Agreement. As proof of correct implementation of the Interim Agreement it is required that the Agreement should be implemented for one year at least. Thus is formed the so-called proof of application of the Agreement or track record.16

7. BENEFITS OF THE STABILIZATION AND ASSOCIATION AGREEMENT

The experience of countries from Central and Eastern Europe, which during the nineties concluded association agreements, and the neighbor states, that have concluded the SAA, shows many positive effects. The agreement allows free access to EU market of 490 million consumers in this regard encourages significant investment, particularly in the
15 16

Ibid., 54. Ibid.

export sector. Also should be mentioned that from the total of 12 billion euro investment in Serbia for the period 2000-2008, the 7.5 billion is from the EU Member States. 17 Investment growth leads not only to increase its productivity and employment but also the gradual transfer of knowledge and technology as well as modern approaches to organization and management of business and production processes. In this way, directly affects the competitiveness and the presence of our company and products to the EU market.18 Increased investment and employment is accompanied by increasing fiscal revenue and thus compensate for losses due to customs gradual reduction of tariff rates. Effects of these processes will feel themselves consumers due to increased competition, which will affect not only the reduction in prices but also increasing the quality of the product. The presence of foreign companies will also have to accelerate the restructuring process less competitive local companies and the adoption of modern business and manufacturing processes. In this way, these agreements represent a powerful tool for further implementation, direction and speed not only political but also economic reforms in the Western Balkan.19

8. CONCLUSION
The most important element of the SAA is that the Western Balkan countries get status of state associated with the EU and enter into a comprehensive contractual relationship with the EU in which the bilateral commitments are clearly defined. Status of an associated state is the status which is the closest ties with the EU, which non-member states may have. Granting that status primarily means the stabilization of the situation in the country and clearly defining the direction of economic and political development. The text of the agreement does not explicitly say that if state signs the SAA it will become an EU member, but if you had already signed agreement, that means that you had a tendency to become a member. Just because of that SAA also represents an important step towards candidate

17 18 19

Ibid., 34. M. Prokopijevic, Evropska unija: Uvod, Sluzbeni glasnik, Beograd, 2005, 581-584. B. Budimir, V. Medjak, Pridruzivanje Srbije Evropskoj Uniji, ISAC fond, Beograd, 2010, 34.

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status

for

EU

membership

and

access

to

pre-EU

funds.20

9. REFERENCES:
Book: M. Prokopijevic, Evropska unija: Uvod, Sluzbeni glasnik, Beograd, 2005.

Articles: B. Budimir, V. Medjak, Pridruzivanje Srbije Evropskoj Uniji, ISAC fond, Beograd, 2010. M. Delevic, et al., Izazovi Evropskih integracija, Sluzbeni glasnik, Beograd, 2010.

Internet sources:
20

Democratic revolution in Serbia, http://www.beograd.rs/cms/view.php?id=1275, 12 June 2011.

Ibid., 48.

11

Serbia The

EU

relations, Balkan

http://ec.europa.eu/enlargement/potential-candidatecountries on the road to the EU,

countries/serbia/eu_serbia_relations_en.htm, 12 June 2011. Western http://ec.europa.eu/enlargement/enlargement_process/accession_process/how_does _a_country_join_the_eu/sap/history_en.htm, 12 June 2011. Zagreb summit, http://ec.europa.eu/enlargement/enlargement_process/accession_process/how_does _a_country_join_the_eu/sap/zagreb_summit_en.htm, 12 June 2011.

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