Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Home
  • Business Management & Operations
  • Global Business, International Law & Relations

Central European Free Trade Agreement - Explained

What is the CEFTA?

Written by Jason Gordon

Updated at April 25th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is the Central European Free Trade Agreement (CEFTA)?How does the Central European Trade Agreement Work? Original agreement2006 agreementRelations with the European UnionAcademic Research for Central European Free Trade Agreement (CEFTA)

What is the Central European Free Trade Agreement (CEFTA)?

The Central European Free Trade Agreement (CEFTA) is a trade agreement among non-EU nations that mostly belong to Southeastern Europe. It was established by members representing Hungary, Poland, and Czechoslovakia, and gradually, spread its roots in countries including Romania, Moldova, Serbia, Albania, Bulgaria, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Slovenia, and the United Nations Interim Administration Mission in Kosovo representing Kosovo.

Back to: INTERNATIONAL BUSINESS, LAW, & RELATIONS

How does the Central European Trade Agreement Work? 

A nation who is already a member of CEFTA, when joins the European Union, loses its membership with CEFTA. As per reports of July 1, 2013, the member nations of CEFTA include Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro, Serbia, and the UNMIK representing Kosovo. Eligibility of being a CEFTA member: As per the previous Poznan Declaration standards:

  • World Trade Organization membership
  • Free trade agreements with the existing CEFTA member nations
  • European Union Association Agreement offering prospective complete membership

Present criteria since Zagreb meeting held in the year 2005:

  • WTO membership or abiding by all regulations of WTO
  • Free trade agreements with existing CEFTA member nations
  • Any type of European Union Association agreement

Original agreement

The Visegrad Group nations approved the authentic CEFTA agreement. These nations included Poland, Czech and Slovak republics and Hungary, and the agreement was signed on Dec. 21, 1992 in Krakow, Poland, and it was implemented in the year 1994. In the presence of CEFTA agreement, member nations sought to organize effort so as to merge into the Western European organizations, and participate in European economic, political, security mechanisms, thereby strengthening the democratic conditions as well as free-market economics. There were some amendments made in the CEFTA agreement on Sep. 11, 1985 in Brno, followed by Jul. 4, 2003 in Bled. Slovenia became a part of CEFTA in the year 1996, Romania in the year 1997, Croatia in the year 2003, and Macedonia later in the year 2006.

2006 agreement

Now, the members of the primary agreement had now become a part of the European Union and, hence left CEFTA. This was one of the situations that led to the extension of CEFTA so as to include the remaining Balkan regions that had finished a series of bilateral FTAs within the structure of the Stability Pact for South Eastern Europe region. The extent of CEFTA was expanded to regions including Albania, Bosnia, and Herzegovina, Moldova, Serbia, Montenegro and UNMIK on behalf of Kosovo, and this announcement was made at the South East Europe Prime Ministers Summit held in Bucharest. Discussions regarding the accession of Ukraine also took place. The exclusive agreement was released on Nov. 9, 2006 in Brussels, and was approved and implemented on Dec. 19, 2006 in the South East European Prime Ministers Summit held in Bucharest. For Albania, Kosovo, Macedonia, Moldova, and Montenegro, this agreement was implemented on Jul. 26, 2007, for Croatia on Aug. 22, for Serbia on Oct. 24, and for Bosnia and Herzegovina on Nov. 2007. This agreement had an objective to regulate a free trade zone in the location by the end of 2010. After being independent on Feb, 17, 2008, UNMIK kept representing Kosovo in all of its CEFTA summits. In 2008, there were modifications made in Kosovos customs stamps that substituted UNMIK with Kosovo. Ultimately, this created trade restrictions between Kosovo and countries like Serbia and Bosnia. The Pristinian government also enforced import restrictions on goods received from Serbia. This ultimately increased tension at borders in the mid of 2011.

Relations with the European Union

Earlier, member nations had given approval for the association agreements with the European Union. So, in some way, even CEFTA has helped countries in getting ready for the complete European Union association. On May 1, 2004, countries including Poland, the Czech Republic, Hungary, Slovakia, and Slovenia became a part of the European Union, while other nations such as Bulgaria and Romania joined it on Jan. 1, 2007. Croatia became a part of the European Union on Jul 1, 2013. For the last 6 years, Montenegro and Serbia have been a part of European Union accession conversations, whereas Albania and Macedonia tend to be official nominees for the European Union. After the recommendations made by the European Union, the prospective members got ready for association by creating FTAs or free trade areas. EU nations have a big portion of CEFTA foreign trade.

Related Topics

  • Common Market
  • Common Market for Eastern and Southern Africa
  • Central American Common Market
  • Caribbean Community and Common Market
  • Free Trade Agreement
  • North American Free Trade Agreement
  • Central European Free Trade Agreement


Was this article helpful?

Yes
No

Related Articles

  • Compensation Trade - Explained
  • Offshore Financial Centers - Explained
  • Anti-Diversion Clause - Explained
  • European Bank for Reconstruction and Development (EBRD) - Explained



©2011-2021. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand