BILATERAL TRADE EXCHANGE ECONOMY

USA 2022 Bilateral Trade Exchange Investments Yet To Convert Into Significant

Bilateral Trade

Although trade cooperation between the U.S. and Serbia remains below the level of a billion dollars, the two countries are increasingly finding new opportunities to cooperate. And a strategic partnership agreement would make the implementation of joint projects easier, especially in the energy sector

Economic cooperation between Serbia and the United States during the recent past has been marked largely by the investments of American companies in Serbia. The top American investments in Serbia are those of Philip Morris, Pepsi Co, Coca-Cola, Ball Corporation, Cooper Tire & Rubber Company and Microsoft. Among the most prominent are also Cooper Tires, Johnsons Controls, Sharps Terminator, NCR, Sitel, VelaTel Global Communications, Oracle, and EMS.

According to data of the National Bank of Serbia, Serbia’s central bank, net investments of U.S. residents in Serbia over the previous ten-year period (2010 to 2019) exceeded half a billion euros, ranking the United States 15th among investor countries in Serbia. Additional investments worth 79.1 million euros

arrived in 2020, followed by 23.8 million euros in Q1 2021.

Serbia nevertheless remains among the U.S.’s smallest trade partners. Bilateral trade numbers remain below the billion-dollar mark, which could be considered an encouraging number, with the trade exchange totaling around $850 million in the pre-pandemic year.

According to available data, export from Serbia mostly consists of cars and motor vehicle engines and engine parts, while imports are dominated by medical equipment and other sophisticated products. U.S.-Serbian cooperation is expected to strengthen in the agricultural and food sector, in the metal (auto parts and metal processing), textile and furniture industry, and in the purpose-built industry, which in the previous period recorded significant exports of hunting and sports ammunition.

The exchange of services has become increasingly important in the total exchange between the two countries, reaching a value of 910 million dollars prior to the outbreak of the pandemic, with Serbia even having a surplus. The fast-growing Serbian ICT sector has special potential to further increase the exchange of services between the two countries.

Serbia’s preferential trade status is regularly extended, which allows businessmen from the country to export more than 3,500, mostly industrial and agricultural products, to America dutyfree, or with minimal tariffs.

However, given the large differences in the complexity of the products produced by the two countries, it is unlikely that this cooperation will increase significantly. Namely, the further movement of Serbia towards joining the European Union will always have an advantage in relation to other more complex destinations.

The Serbian public expected great things from the opening of the Serbian office of the American Corporation for International Development Finance (DFC), which would cover the entire region from here. The basis for such expectations was the signing of an agreement between Serbia and the United States on investment incentives, which created the institutional conditions to The digital economy and the IT sector have been recognized as the pillars of future Serbia-U.S. cooperation, while major project-based cooperation with U.S. companies could be achieved in the digitalization of the Serbian health care sector

strengthen support for Serbian and other Western Balkan companies - micro, small and medium-sized enterprises, large private sector investment projects, and infrastructure development.

Indeed, U.S. companies began appearing in infrastructure projects after the Memorandum of Understanding on infrastructure cooperation was signed in September 2018 by Zorana Mihajlovic, Serbian Deputy Prime Minister and Minister of Construction, Transport and Infrastructure, and Kyle Scott, then U.S. Ambassador to Serbia. In accordance with this memorandum, in December 2019, a commercial agreement was signed between the Serbian government and the Bechtel-Enka consortium (U.S.-Turkey), for the construction of a 112-kilometer corridor along the PojatePreljina section.

Recently, the two sides exchanged views suggesting that this cooperation be raised to a higher level, for example via the boosting of Serbian cooperation with U.S. companies and institutes in the field of energy diversification and renewables, as well as in the digital economy and R&D.

The digital economy and the IT sector have been recognized as the pillars of future Serbia-U.S. cooperation, while the parties also concluded that major projectbased cooperation with U.S. companies could be achieved in the digitalization of the Serbian health care sector.

It was also stated that a strategic partnership agreement would make the implementation of joint projects easier, especially in the energy sector. It was noted that Serbia remains in the initial phase of energy transition and requires new capacities, primarily in the electricity sector. According to the announcement, priorities include investments in new capacities, energy efficiency improvements, and diversification in the gas sector, especially in light of the crisis in Ukraine.