At that time, five countries in the SEE region were in a political and economic union within SFR Yugoslavia (Bosnia and Herzegovina, Croatia, Macedonia, Slovenia, and FR Yugoslavia, then represented by the two republics--Serbia with its two autonomous provinces, Kosovo and Voivodina, and Montenegro) and as such had substantial trade and other economic links.
(5) In the case of Bulgaria, 13.4% of its exports went to, and 6.5% of its imports came from, the other two major SEE countries, Romania and FR Yugoslavia. (6) For the other SEE countries, regional trade at that time was even less important.
(9) Five military conflicts, policies of ethnic cleansing, inward-oriented nationalistic policies which gave priority to political over economic aims, delays in carrying forward the transition to multiparty democracy and market economy, poor and deteriorating economic performance, international sanctions against FR Yugoslavia, its decade-long isolation and NATO bombardments in spring 1999, are among the principal reasons of the delayed process of EU integration.
FR Yugoslavia in 1998 also exported more to the other SEE countries (35%) than to the EU (33%), though its imports from the EU (39%) were more than double the share of imports from SEE (16%), confirming its enormous import dependence on the EU (a feature typical of other SEE countries as well).
In the second half of the 1990s, trade in the SEE region was frequently shaped along ethnic lines, being very intensive especially between Croatia and Herzegovina (part of the Bosnian Federation), FR Yugoslavia and the Republika Srpska (the Serb part of Bosnia and Herzegovina), and Kosovo and Albania.
Major disruptions in trade of all SEE countries have taken place in 1999 as a consequence of the war in FR Yugoslavia. The NATO bombardments have further divided the SEE region, through the destruction of infrastructure, transport and communication lines, new ecological barriers, although precisely because of these region-wide consequences of the 1999 conflict, there is major interdependence among the SEE countries today.
The other agreements have application dates which go back to 2001-3 or even earlier, as they refer to provisions adopted within CEFTA or within bilateral free trade agreements, such as those signed between FYR Macedonia and FR Yugoslavia in 1996, or Croatia and FYR Macedonia in 1997.
Moreover, as stressed earlier, as late as 1998 Bosnia and Herzegovina and FR Yugoslavia still had a relatively larger share of exports directed towards the SEE, than towards the EU.
The only real exception is FR Yugoslavia, where the share has drastically fallen--from 24% of total imports in 1999, to 9% in 2003.
43), which take into account economic size and distance, have suggested that there is a potential for a significant overall increase in intra-SEE-5 trade, given that the value of this trade could be 70% larger than its actual level--particularly between Croatia and Serbia and Montenegro, though "excessive" levels were present in Bosnian trade with both FR Yugoslavia and Croatia (because of the special relationships between Republika Srpska and Serbia and between the Bosnian Federation and Croatia).
Foreign trade statistics of Kosovo are not readily available, so all data for Serbia and Montenegro (formerly FR Yugoslavia) exclude Kosovo.