Western Balkans Competitiveness Outlook 2024: Kosovo

3. Trade policy

Abstract

Effective trade policy is vital for regional integration and alignment with the European Union. This chapter examines how the government of Kosovo uses trade policy to ease market access and harness digitalisation for enhanced trade facilitation. The first sub-dimension, trade policy framework, assesses the government’s ability to formulate, implement and evaluate trade policy, examining the institutional formulation and co-ordination of trade policy, public-private consultations and the network of free trade agreements. The second sub-dimension, digital trade, focuses on the legal framework for digital trade policy and digital trade facilitation and logistics. The third sub-dimension, export promotion, explores the effectiveness of export promotion agencies and programmes, especially in the context of deepening regional integration.

Key findings

Kosovo has continued to improve its overall trade policy score since the last Competitiveness Outlook (Table 3.1) by making progress in all policy areas and scoring above the regional average. Since the 2018 assessment, the overall trade policy dimension score increased by 1.8 points. The biggest improvement was observed in the trade policy framework.

Table 3.1. Kosovo’s scores for trade policy

Dimension	Sub-dimension	2018 score	2021 score	2024 score	2024 WB6 average
Trade	2.1: Trade policy framework			4.5	4.4
	2.2: Digital trade			4.0	3.8
	2.3: Export promotion			3.8	3.6
Kosovo’s overall score		2.3	3.5	4.1	3.9

The key findings are:

• Kosovo has made significant strides in enhancing its trade policy framework through the adoption of a new Foreign Trade Law in accordance with international standards, aligning with the World Trade Organisation (WTO) agreements and European Union legislation.

• The government adopted the 2030 Strategy for Industrial Development and Business Support, which is expected to have positive implications for the trade landscape, mainly in the industrial sector. An Action Plan has been formulated to outline specific activities scheduled for the initial three years of the strategy's implementation.

• Kosovo strengthened its policy framework for digital trade, although room for improvement remains in incorporating electronic payment systems to further facilitate digital trade.

• The implemented export promotion programmes were successful in boosting exports but companies still lack access to systematic counselling and advisory services in building their capacity and export readiness.

State of play and key developments

Over the past two decades, foreign trade in goods has significantly grown, rising from EUR 1.2 billion in 2005 to over EUR 6.5 billion in 2022, showcasing substantial expansion. In 2022, Kosovo had a trade deficit of EUR 4.7 billion, marking an increase of around EUR 800 million compared to 2021 and highlighting a persisting trade imbalance. Exported goods rose to EUR 920.4 million, a 22% increase from the previous year, while imports amounted to over EUR 5.6 billion, reflecting a 20.4% increase (Ministry of Industry, Entrepreneurship and Trade, 2023[1]).

Around 67% of Kosovo's foreign trade exchange is concentrated in the EU and Central European Free Trade Agreement (CEFTA) countries. Kosovo's exports to CEFTA countries amount to EUR 333.5 million, covering 36% of the total, while exports to EU markets reached EUR 311.7 million, representing 34% of total exports. On the import side, EU countries remain Kosovo's main partners at 42.4% of total imports (European Commission, 2023[2]). Regarding exports, during the 2021-22 period, the United States stood as Kosovo's main export partner beyond the EU, constituting 14.8% of the total export value in 2022, followed by North Macedonia (12.9%), Albania (11.1%), Germany (9.5%), Switzerland (7.6%) and Serbia (6.8%) (Ministry of Industry, Entrepreneurship and Trade, 2023[1]). In June 2023, Kosovo introuced a ban against entry of Serbian final products and postal parcels due to security concerns (European Commission, 2023[2]). Companies owned by foreign entitities have reported a negative impact on their operations due to supply chain disruptions (US International Trade Administration, 2024[3]).

Sub-dimension 2.1: Trade policy framework

The Ministry of Industry, Entrepreneurship and Trade (MIET) oversees various trade-related mechanisms and agencies, including trade policy formulation, private sector support, and export and investment promotion. Other government institutions like the Ministry of Finance, Ministry of Agriculture, Ministry of Economy, and Ministry of Foreign Affairs are also involved in trade policy. Public and private sector entities, including business associations, play vital roles in advocating and promoting international trade. The Ministry of Trade and Industry established the National Trade Facilitation Committee (NTFC) in 2016 to co-ordinate trade activities among various ministries, the private sector, and civil society.

Kosovo made considerable progress in improving its trade policy framework by adopting a new Foreign Trade Law, which entered into force in February 2022, abrogating the previous Law no. 04/L-048 on Foreign Trade. The new law sets forth the fundamental principles and regulations that govern the import, export, and transit of goods and services to and from Kosovo's territory in alignment with the highest international standards, WTO agreements, and European Union legislation. In the area of merchandise trade, the law emphasises the most-favoured-nation treatment for imports and exports, outlining customs duties, charges, internal taxes, and other related formalities. It also ensures national treatment for imported products, prohibiting discriminatory taxes or charges compared to domestic counterparts. These principles extend to trade in services and intellectual property rights. The law also lowers barriers to entry by prohibiting quantitative restrictions, such as quotas, on imports or exports. It establishes requirements for imported goods, including sanitary and phytosanitary (SPS) standards and technical regulations. The law guarantees freedom of transit and allows individuals to import and export goods for non-commercial purposes. Moreover, the law addresses customs duties, customs valuation, and goods classification. Procedures for licences adhere to existing laws and appeals against decisions can be made in accordance with the relevant administrative procedure laws (Ministry of Industry, Entrepreneurship and Trade, 2022[4]). There is one provision to preserve the sustainability of trade flows, although it remains somewhat limited. The law mandates that technical trade regulations must be no more restrictive than necessary, as deemed by the MIET, to achieve legitimate objectives, such as national security, consumer protection, and safeguarding human, animal and plant life and, notably, the environment. Incorporating green provisions into new foreign trade laws is crucial as it signifies a commitment to sustainable practices, aligning trade policies with global environmental goals. The environmental standards specified in domestic laws and regulations are integral in promoting green global supply chains and fostering environmentally responsible production and consumption practices internationally (Deere Birkbeck, 2021[5]).

In an effort to have a stronger inter-institutional co-ordination mechanism in trade facilitation, in December 2021 the government established the Task Force for the Protection of the Market. The Task Force's core mandate is to observe barriers to trade, proposing strategic measures to alleviate or diminish their impact. Since its establishment, the Task Force has implemented a range of measures1 focused on addressing the pricing and regulatory aspects related to oil prices in order to prevent shocks to the economy. This initiative aims to protect consumer interests by ensuring fair competition, all the while adhering to the legal framework in place.

Since the last assessment cycle, the government further developed the overarching strategic framework for enterprise and industry development by adopting the Strategy for Industrial Development and Business Support. The strategy will have considerable implications for the economy’s international trade landscape; one of its main goals is to reduce the trade deficit in the manufacturing industry (Box 3.1). Kosovo’s industrial trade balance is notably unfavourable and continues to worsen, with imports in the industrial sector surpassing exports by a substantial margin of 7 to 1 (Ministry of Industry, Entrepreneurship and Trade, 2023[6]). The degree of global integration of Kosovo's productive industry is limited, as the export contribution to GDP stood at just 22%, considerably lower than the Western Balkans average of 35% in 2021 (Ministry of Industry, Entrepreneurship and Trade, 2023[6]). Moreover, the share of manufactured goods in Kosovo's overall exports and the per capita capacity for exporting manufactured goods are notably lower compared to other Western Balkan economies. Specifically, Kosovo's proportion is only at 84%, in contrast to the WB6 average of 90% (Ministry of Industry, Entrepreneurship and Trade, 2023[7]). Simultaneously, the domestic productive sector faces challenges in fulfilling local demand, resulting in higher imports of manufactured goods from abroad to meet the shortfall. This tendency highlights the need for strategic measures to enhance the competitiveness of Kosovo’s manufacturing sector and bolster its capacity to meet both domestic and international market demands.

Box 3.1. The 2030 Strategy for Industrial Development and Business Support

The 2030 Strategy for Industrial Development and Business Support marks the first of it’s kind in Kosovo. Following adoption of the strategy in April 2023, an Action Plan has been crafted to delineate specific activities scheduled for the strategy's initial three years of implementation. These endeavours are anticipated to play a crucial role in attaining predefined objectives, notably the reduction of the trade deficit in the industrial sector. The Action Plan provides clear definitions of anticipated outcomes, as well as quantifiable performance indicators, thus facilitating monitoring and evaluation.

Among trade-related goals, the strategy has set the following:

• increasing the number of industrial products exported to the EU from the 2021 baseline of 298 to 630 in 2026 and 895 in 2030

• creating the National Product Certification Instrument by Q3 2025 with the goal of certifying at least 30 beneficiaries per year

• finalising the Law on the Supervision of the Conformity of Products on the Market by the end of 2024

• reducing the trade deficit in the manufacturing industry from the 2021 baseline of EUR 2 327.6 million to EUR 2 037 million in 2026 and EUR 1 744.4 million in 2030

• increasing the number of exporting manufacturing enterprises from the 2021 baseline of 733 to 1 239 in 2026 and 2 478 in 2030

• expanding the Export Window1 within the framework of the Kosovo Credit Guarantee Fund with a goal of 400 beneficiaries

• establishing the Export Market Information Centre

• improving the diversification of export markets

• negotiating three trade agreements by the end of 2025

• drafting the Trade Policy Document2 by the end of 2023.

All the trade-related goals have a clearly defined timeline and an allocated budget. The Action Plan also assigned responsibilities to leading and supporting institutions. Despite the goals set by the strategy, implementation might be stalled by the impending restructuring of the Kosovo Investment and Enterprise Support Agency (KIESA) into an Agency for Support to Enterprises within the MIET, and transferring the Agency for Investment and Export (AIE) under the jurisdiction of the prime minister’s office.

1. The Export Window is a credit guarantee mechanism with the goal of facilitating more accessible and streamlined financial access for businesses. Supported by the United States Agency for International Development (USAID), the Export Window is designed to empower businesses by enhancing their production capacities and diversifying their product range, boosting their competitiveness in both regional and international markets.

Source: Ministry of Industry, Entrepreneurship and Trade (2023[6]).

Public-private consultations within the MIET demonstrate clear definition in terms of both scope and authority. Notably, the MIET’s website facilitates open access to both preliminary and ultimate trade measures, enabling the private sector to post comments on proposed legislation. The private sector, represented by various chambers of commerce, plays a proactive role in all phases of policy formulation through engagement in working groups, the NTFC and National Council for Economic Development (NCED). Moreover, chambers of commerce and civil society actively partake in public consultations. These consultations extend beyond the private sector, involving non-governmental organisations, academia, EU offices, and other institutions relevant for trade policy. Despite the well-developed framework for public‑private consultations, existing regulation lacks a mandated deadline for the relevant institution to respond to stakeholder comments. This aspect calls for potential improvements in ensuring timely and effective communication between the public and private sectors in the policy-making process.

The evaluation of stakeholder participation in governance is systematically carried out through the generation of annual reports and compliance reports, both of which are conveniently accessible online.3 The Office of Good Governance is responsible for preparing an annual report that assesses the effectiveness and inclusivity of the public consultation process. This involves ensuring that draft proposals align with established public consultation standards before their submission to the government. Through these measures, the Office of Good Governance contributes to transparency, accountability, and the overall enhancement of the democratic decision-making process, by providing a structured and accessible assessment of stakeholder involvement in governance initiatives.

Kosovo established co-operation with the European Free Trade Association (EFTA) in 2018, holding its inaugural virtual joint committee meeting in November 2020. The official free trade negotiations started in June 2022, with the first and second round held between November and December 2022. Bilateral trade between EFTA parties and Kosovo has been steadily increasing. Since 2012, EFTA’s imports from Kosovo rose ninefold to reach USD 90 million in 2021, while EFTA’s exports to Kosovo increased twofold since 2021 to reach USD 70 million in 2021 (EFTA, 2022[8]). The proposed provisions in the agreement resemble the concluded FTAs with other Western Balkan economies and include elimination of all customs duties for traded goods, rules of origin and customs co-operation, trade facilitation measures and trade remedies, technical barriers to trade and SPS measures aligned with the WTO agreements. The FTA also foresees a trade and sustainable development chapter, which constitutes a standard practice in all EU agreements. The next round of negotiations is expected mid-2024.

Sub-dimension 2.2: Digital trade

Kosovo has a digital trade policy framework in place, albeit with some shortcomings. The 2012 Law on Information Society Services aligns with the EU e-commerce directive4 and constitutes an overarching legal framework for e-commerce. It covers electronic signatures, contracts, and payments, aiming to facilitate electronic trade and transactions while minimising potential issues and misuse. Furthermore, the Law on Electronic Identification for Trusted Electronic Transactions, based on the EU's electronic identification and trust services (eIDAS) regulation,5 was approved by parliament in December 2021. This law complements the Law on Information Society Services, creating a favourable legal environment for e‑commerce and electronic services. Digital trade regulations are within the purview of various institutions. The Ministry of Economy (MoE) oversees legislative and policy development for e-commerce, while the MIET and the Electronic and Postal Communications Regulatory Authority (ARKEP) are tasked with law implementation. Digital trade is also covered under the Additional Protocol 6 of CEFTA. The regulatory environment is well integrated into the strategic framework for the development of the digital economy, which includes the Digital Agenda of Kosovo 2030 and the Kosovo IT Strategy. However, the draft Law on Electronic Commerce, which was part of the MoE’s work plan for 2021-22, has not been drafted yet, signalling potential challenges in the progress of formulating and finalising the proposed legislation.

Despite a legal and strategic framework for e-commerce and digital trade in place, Kosovo maintains a weak electronic payment system (European Commission, 2023[2]). Furthermore, lack of safe online payment systems contributes to the lack of trust in the digital economy and thereby in digital trade (IMF, OECD, UN, World Bank, WTO, 2023[9]).

However, an examination of the domestic legal framework pertaining to the free movement of capital, particularly in payment services, was conducted. The analysis assessed compliance with the EU acquis and readiness for involvement in the Single Euro Payments Area (SEPA). As part of this assessment, legal modifications were identified and formulated to align with the prerequisites for SEPA participation. Kosovo has yet to align its legislation with the updated EU Payment Services Directive,6 which can lead to regulatory discrepancies and challenges and potentially affect financial institutions, payment service providers and businesses.

In September 2023, supported by USAID/Kosovo Economic Governance Activity, the self-assessment report on trade facilitation was finalised. Following the 2014 trade facilitation self-assessment, Kosovo has achieved notable advancements in various aspects of trade facilitation, especially using digital tools: enhanced transparency and information accessibility; streamlining and standardising export, import, and transit procedures; fostering increased collaboration among domestic and international border agencies; and strengthening human, technical, and institutional capacities.

Assessment of the digital trade policy framework is conducted through annual reports of the ministries in charge of regulation and implementation, yet there is a notable absence of performance indicators specifically crafted to systematically monitor and measure the effectiveness of digital trade initiatives. Furthermore, the annual reports are not available on line. This lack of dedicated performance indicators poses a challenge in comprehensively evaluating the impact and success of digital trade policies, hindering the ability to gauge their efficiency and make informed decisions for future enhancements.

There has been some progress in adopting digital trade facilitation measures. Notably, in 2022, Kosovo joined the EU Customs Programme (Box 3.2). Several initiatives are under way to streamline the transit process and accelerate the movement of goods across borders by supporting pre-arrival processing. This involves the electronic submission of necessary documentation and customs declarations before the goods reach the border crossing point (BCP). The Electronic Exchange of Data (SEED) system plays a crucial role in this effort, facilitating systematic electronic exchange of pre-arrival information, data matching, and alarm functions across all procedures – export, transit, and import – at Western Balkan BCPs and Customs Control Points (CCPs). Notably, there are 11 certifications issued for the Authorised Economic Operator scheme (AEO). These combined initiatives reflect a concerted effort to enhance efficiency, compliance, and security in the customs processes and bring tangible results in trade facilitation. In 2022 this procedure was employed for 42 853 shipments, representing 17.43% of the total import traffic for goods (Regional Cooperation Council, 2022[10]).

Box 3.2. European Union Customs Programme

In 2022, Kosovo signed an agreement to join the European Union Customs Programme

The Customs Programme facilitates the establishment and functioning of central information technology (IT) systems for customs in the European Union. This initiative aids customs administrations in managing growing trade volumes and adapting to emerging trends and technologies, including e‑commerce and blockchain.

The programme is driven by overarching goals designed to strengthen the Customs Union and promote seamless collaboration among customs authorities. It seeks to unite these authorities in a cohesive effort to protect the financial and economic interests of both the Union and its Member States, ensuring security and safety, and guarding against unfair and illegal trade practices, all while facilitating legitimate business activities. To effectively realise these objectives, the programme actively supports the preparation and consistent implementation of customs legislation and policy, fosters customs co‑operation, and champions administrative and IT capacity building. This comprehensive approach extends to general capacity building and training, as well as the development and operation of European electronic systems in customs administration. Emphasising innovation in customs policy, the programme addresses the diverse challenges faced by the Customs Union and its Member States.

Through the Customs Programme, the EU Commission oversees over 50 European IT systems, streamlining the control of goods’ import, export, and transit while reducing bureaucracy for traders. Notably, it funds the operation of TARIC (Integrated Tariff of the European Union). Through the programme’s features, like the Customs Decision System, businesses can receive import and export authorisations valid across the entire EU, while the Registered Exporters Systems provide current and comprehensive information on exporters outside the EU with preferential arrangements.

Participation in the Customs Programme holds substantial advantages for Kosovo, as it allocates funds to assemble expert teams of customs officials from diverse Member States. These teams collaborate across various domains, allowing EU countries to harness collective expertise. The programme not only supports this collaboration through online services but also provides crucial administrative assistance, along with access to necessary infrastructure and equipment. By joining, Kosovo can use this comprehensive support system to enhance its customs operations, benefiting from shared knowledge and resources for increased efficiency.

Source: European Commission (2023[11]).

Sub-dimension 2.3: Export promotion

The Kosovo Investment and Enterprise Support Agency (KIESA) functions as the key export promotion agency in Kosovo, operating under the direct supervision of the NCED, which is led by the prime minister and is comprised of relevant ministries and economic business associations. KIESA aligns and harmonises efforts across various government bodies to address business challenges and eliminate obstacles to the business environment in Kosovo. A comprehensive institutional co-ordination mechanism involves multiple ministries, government agencies, and chambers of commerce. KIESA's broad mandate encompasses export promotion, trade facilitation, one-stop-shop operations, investor screening, the provision of financial incentives, and the promotion of outward investments, thereby contributing significantly to the economic development and facilitation of business activities in Kosovo.

In addition to delivering services in trade policy information, commercial intelligence, economy representation at prominent trade fairs, export promotion, marketing, product development and training, KIESA also provides services related to networking platforms and product certification. Despite a modest increase in human resources capacity, from three to four employees dedicated to export promotion in 2021, KIESA faces challenges in executing its extensive mandate for comprehensive SME support (OECD, 2022[12]). On top of structural challenges, KIESA is facing a restructuring into an Agency for Support to Enterprises within the MIET and transferring the Agency for Investment and Export under the jurisdiction of the prime minister’s office.

Kosovo made significant progress in the implementation of export promotion programmes, encompassing financial and non-financial support. An example is the Matching Grants Programme,7 a collaborative initiative between the Ministry of Industry, Entrepreneurship and Trade and KIESA. This programme is designed to enhance the export readiness of micro, small and medium enterprises (MSMEs) and improve the quality of local SME suppliers. It offers support covering up to 90% of project activities, with a maximum allocation of EUR 10 000 for MSMEs. The programme has been successful in boosting the exports of beneficiaries, who exported EUR 2.07 million more in 2022 than in 2021. The increase was the most visible in the metal processing sector (24.17%) and the manufacturing of construction products (21.52%) (Ministry of Industry, Entrepreneurship and Trade, 2023[13]). One notable aspect of the Matching Grants Programme is its environmental component. Every application received and approved for funding must provide a comprehensive explanation regarding the environmental management system it currently employs or intends to adopt under the Matching Grants Programme support. Out of the grant beneficiaries, 28 are actively implementing an environmental management system8 designed to enhance their environmental performance. Additionally, four beneficiaries9 of the programme have actively undertaken environmental protection activities, facilitated by the grant programme.

Nevertheless, even with advancements in the implementation of export promotion programmes, these initiatives fall short of effectively tackling the challenges encountered by companies in Kosovo. The prevailing export composition, accompanied by a substantial trade deficit, underscores a notable lack of competitiveness in both domestic and foreign markets, coupled with a limited product variety. About 10.3% of the GDP is derived from exported goods primarily concentrated in sectors characterised by low value added components, particularly in metals and minerals (Ministry of Industry, Entrepreneurship and Trade, 2023[1]). The current export promotion programmes in Kosovo especially do not adequately address the challenges faced by SMEs, which do not have access to incentives to shift to higher value added products and services. The trade deficit also points to the relatively limited scope of domestic production, as well as the companies’ capacity to export. The percentage of surveyed companies’ sales, exported to the EU, CEFTA or other economies, decreased from 21.1% in 2022 to 16.8% in 2023, while the number of companies that do not know how to export almost doubled. In parallel, in 2023 over four times more companies reported the lack of capacity as a barrier to export, compared to 2022 as a reason (Balkan Barometer, 2022[14]). While the accessibility of export promotion services has improved through the eKosova platform, the companies still lack access to online training in internationalisation, counselling, and advisory services through the platform (OECD, 2022[12]).

Overview of implementation of Competitiveness Outlook 2021 recommendations

Kosovo’s progress in implementing 2021 Competitiveness Outlook Recommendations has been progressing at a moderate pace. The economy advanced in strengthening public consultations mechanisms and improving their transparency, although room for improvement remains. There is still scope for reinforcing the regulatory regime in place for e-commerce, as regulation remains incomplete (Table 3.2).

Table 3.2. Kosovo’s progress on past recommendations for trade policy

Competitiveness Outlook 2021 recommendations	Progress status	Level of progress
Strengthen public consultation mechanisms and make them more transparent	Stakeholder participation's impact is evaluated through annual and compliance reports, conveniently available on line. The Office of Good Governance oversees the creation of an annual report detailing the public consultation process, ensuring draft proposals align with established standards before submission to the government. This measured approach reflects an ongoing commitment to transparency and inclusivity in governance. When the government plans to draft the law, a dedicated budget is allocated to it, which also includes submitting the law for public consultation. Furthermore, the government allocated budgetary provisions for arranging meetings and workshops when drafting policies or legislation in which they involve the private sector.	Moderate
Strengthen the regulatory regime for e-commerce	The Law on Electronic Identification for Trusted Electronic Transactions, based on the EU's eIDAS regulation, was approved by parliament in December 2021. This law complements the Law on Information Society Services, creating a favourable legal environment for e-commerce and electronic services. However, the Law on Electronic Commerce, which has been envisioned in the MoE’s work plan, has not been completed.	Moderate

The way forward for trade policy

• Incorporate environmental provisions into domestic trade legislation. This could involve the inclusion of regulations and guidelines within the national trade laws that specifically address environmental considerations and responsibilities. By incorporating such provisions, the legal landscape aims to foster sustainable business practices, encourage eco-friendly initiatives, and ensure that trade activities align with environmental preservation objectives and multilateral climate goals, including Sustainable Development Goals. Currently, there is a growing demand for more explicit, robust, and enforceable environmental standards within national laws. This extends to various products and their production methods, encompassing considerations like carbon footprints, recyclability of industrial materials and packaging, efficient natural resource management, sustainability in food production, animal welfare, and factors related to product design and repairability.

• Accelerate the completion of the draft Law on Electronic Commerce. Expediting the finalisation of the draft Law on Electronic Commerce involves dedicating resources, streamlining workflows, and fostering collaboration among stakeholders to address any obstacles or delays in legislative development.

• Improve the integration of safe online payment systems to facilitate digital trade. By focusing on the improvement of these systems, the economy can create a more conducive environment for businesses and consumers engaging in electronic transactions. This entails strengthening the security and reliability of online payment platforms, streamlining the user experience, and staying abreast of technological advancements in the digital payment landscape. Facilitating safe online transactions is integral to building trust in digital trade, both domestically and internationally. It not only encourages local businesses to embrace digital platforms but also attracts foreign investors and partners seeking secure and efficient online commerce channels. A robust and well-integrated online payment infrastructure is essential for driving the growth of e-commerce, enabling businesses to expand their reach and connect with a global customer base. Furthermore, aligning with international standards, such as those set by the EU and the OECD (Box 3.3), can enhance Kosovo's compatibility with global digital trade practices.

Box 3.3. OECD Recommendation of the Council on Consumer Protection in E-commerce

Acknowledging the diversity in payment protection levels associated with different payment mechanisms, the Recommendation advocates for collaborative efforts between governments and stakeholders to define universally applicable minimum standards for consumer protection across all payment methods in e-commerce.

The Recommendation mandates businesses to provide consumers with secure payment mechanisms and protect them from potential fraud. This protection should encompass regulatory or industry-driven constraints on consumer responsibility for unauthorised or fraudulent charges, along with the implementation of appropriate chargeback mechanisms. Additionally, the Recommendation advocates for the promotion of alternative payment structures that can bolster consumer confidence in e‑commerce.

Governments and stakeholders are encouraged to investigate various areas where achieving greater consistency in payment protection rules across different jurisdictions could bring about significant benefits. This involves a thorough examination of the existing regulatory landscape to identify opportunities for harmonisation. There should be a concerted effort to clarify and establish effective mechanisms for addressing challenges that may arise in the context of cross-border transactions, especially when there are variations in payment protection levels among different regions. The goal is to create a more cohesive and transparent framework that fosters smoother cross-border financial transactions and ensures a consistent level of protection for consumers engaged in international commerce.

Source: OECD (2016[15]).

• Provide export promotion support to companies to shift to higher value added goods and services and improve their export readiness. This support is designed to enhance their overall export readiness by addressing various aspects of their operations and strategies. This may include guidance on product and service development, market research, compliance with international standards, and the implementation of effective marketing strategies. While the scope of the Matching Grants Programme was expanded in 2019 to include standardisation, certification and accreditation to comply with international standards (OECD, 2022[12]), the companies are still lacking access to adequate advisory services, counselling and capacity building. In addition, KIESA should offer targeted support to companies looking to elevate the quality and sophistication of their exported goods and services. This involves providing guidance on product innovation, process improvement, and adopting advanced technologies to meet the higher standards and demands of international markets. Additionally, assistance may be extended in developing strategic partnerships, exploring new markets, and optimising supply chain management. The objective is to enable companies not only to meet current market demands but also to excel in delivering premium offerings that can command higher value in the global marketplace.

References

[14] Balkan Barometer (2022), Balkan Barometer - Business Opinion 2022, http://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-%20BO.pdf/56acb2cb729b5f1a74308ea7052bda10.pdf.

[5] Deere Birkbeck, C. (2021), Greening International Trade: Pathways Forward, https://doi.org/10.1787/19901097.

[8] EFTA (2022), Ongoing Negotiations or Talks: Kosovo, https://www.efta.int/free-trade/Ongoing-Negotiations-or-Talks/Kosovo (accessed on 1 March 2024).

[11] European Commission (2023), Customs Programme, https://taxation-customs.ec.europa.eu/eu-funding-customs-and-tax/customs-programme_en (accessed on 1 March 2024).

[2] European Commission (2023), Kosovo 2023 Report, https://neighbourhood-enlargement.ec.europa.eu/system/files/2023-11/SWD_2023_692%20Kosovo%20report_0.pdf.

[9] IMF, OECD, UN, World Bank, WTO (2023), Digital Trade for Development, https://www.wto.org/english/res_e/booksp_e/dtd2023_e.pdf.

[13] Ministry of Industry, Entrepreneurship and Trade (2023), Competitiveness and Export Readiness Project - Matching Grants Programme, https://mint.rks-gov.net/desk/inc/media/3D484A75-7163-45D2-8374-17EA6F2BCD5C.pdf.

[6] Ministry of Industry, Entrepreneurship and Trade (2023), Draft Action Plan for the 2030 Strategy for Industrial Development and Business Support, https://mint.rks-gov.net/desk/inc/media/BA0E8A1F-206D-4902-B9E9-83DDE8538754.pdf.

[7] Ministry of Industry, Entrepreneurship and Trade (2023), Strategy for Industrial Development and Business Support 2030, https://mint.rks-gov.net/desk/inc/media/8721BDAD-6637-435F-897B-6938E6C75907.pdf.

[1] Ministry of Industry, Entrepreneurship and Trade (2023), Trade Exchanges of Kosovo, https://mint.rks-gov.net/desk/inc/media/5407C063-7D6B-4A82-ADBE-9DECB33E2187.pdf.

[4] Ministry of Industry, Entrepreneurship and Trade (2022), Law on Foreign Trade, https://mint.rks-gov.net/desk/inc/media/BDC09F51-85FC-4158-A586-A706709DDE84.pdf.

[12] OECD (2022), SME Policy Index 2022: Western Balkans and Turkey, https://www.oecd-ilibrary.org/development/sme-policy-index-western-balkans-and-turkey-2022_b47d15f0-en.

[15] OECD (2016), Recommendation of the Council on Consumer Protection in E-commerce, https://doi.org/10.1787/9789264255258-en.

[10] Regional Cooperation Council (2022), Common Regional Market - Report on Implementation 2022, https://www.rcc.int/download/docs/2023-05-Common-Regional-Market-2022-spread.pdf/3e4e41db978a0f1aa37353f8152ef683.pdf.

[3] US International Trade Administration (2024), Trade Barriers, https://www.trade.gov/country-commercial-guides/kosovo-trade-barriers (accessed on 1 March 2024).

Notes

← 1.  Administrative Instruction (QRK) No. 03/2022 on Regulation of Prices of Petroleum Products and Renewable Fuels and Other Protective Measures mandates price regulation in case of sudden shortages of petroleum products and renewable energy within established trade margins.

← 2.  The Trade Policy Document will be part of the strategic framework for trade policy and differs from the Law on Foreign Trade.

← 3.  Access Kosovo’s Office on Good Governance documents database here : https://konsultimet.rks-gov.net/documents.php.

← 4.  Read more on the e-Commerce Directive here: https://digital-strategy.ec.europa.eu/en/policies/e-commerce-directive.

← 5.  The eIDAS Regulation facilitates secure electronic interactions for businesses, citizens, and public authorities. It allows the use of national electronic identification schemes for accessing online public services across EU countries, and establishes a European internal market for trust services, ensuring their cross-border functionality and legal equivalence to traditional paper-based counterparts.

← 6.  The updated Payment Services Directive (PSD2) revises and improves upon the EU regulations established by the original PSD enacted in 2007. PSD2 came into effect on 12 January 2016.

← 7.  The programme operates within the broader scope of the Competitiveness and Export Readiness project.

← 8.  The beneficiaries are implementing the ISO14001:2015.

← 9.  RecPlast LLC, AL-TEC LLC, MSM Sh.P.K. LLC and BTP Holding.