Special Newspackage on Free Trade Area in SEE and EU Western Balkans Trade Relations

Exterior shots of “Puratos” building.
Production of margarine, packing and storing in the warehouse.

Belgian company Puratos is one of the world leaders in food industry. The Puratos Group produces ingredients for the bakery, patisserie and chocolate sectors. It is present in more than 100 countries and employs 4500 people worldwide with annual turnover of 750 million euros. In South East Europe Puratos has already invested in Romania, Bulgaria, Serbia, Moldova (production) and in Bosnia and Herzegovina, Croatia, Macedonia (distribution and sales)

Piet Sanders, Regional Director Central and Eastern Europe, Puratos

“People in eastern and western Europe consume quite a lot of bread e.g. bread consumption in Romania, Turkey and also Serbia are way above the EU average, so it is an important bread market and people want more and more variety breads, better quality breads indeed the sales growths of Puratos in that part of the world as well as the profit growth have been quite satisfactory, I can say.”

02:11 Piet Sanders: “People want more special patisserie products, they want real Belgian chocolates because Puratos with our factory is the only real Belgian chocolate producers. We did a major event in Serbia last year and people start to buy these products because they really also want quality confectionary products so we have all reasons to believe that - given that irresistible tendency for better quality products - that our growth will continue along this double digits lines both in Former Yugoslavia and in Bulgaria, Romania. We’re quite positive and the shareholders have made a strategic plan with a vision towards 2010, the shareholders also committed quite some additional investments in that part of Europe, Central and Eastern to sustain that growth because without further investments we cannot grow further.”

02:59 Exterior shot of Puratos building

03:04 Piet Sanders showing Puratos investments in different countries on the map of Europe

“I’m not telling any secret if I say that a lot of these markets are very small on their own. We have a factory in Moldova, there are 3m people there, we have a margarine factory in Serbia, there are 8 million people living there. There is a need for more opened borders and better trade so that we can export goods to the different countries which are geo. Very close but very far away because of border protection”

We are faced sometimes with an absurd situation that indeed our Serbian margin factories are not far away from the Bulgarian border, from the Croatian border, however you see the import regulation, be it in Bulgaria, be it in Croatia, make it more attractive for those people to import Polish or Italian margarine than Serbian which is very nearby because of import taxes and import regulations.”

04:13 Production of patisseries in the “Demonstration Bakery” of Puratos in Brussels

Piet Sanders, Regional Director Central and Eastern Europe, Puratos:

“Sometimes you read about the Free Trade agreement but then you see e.g. for some sensitive products like sugar containing products are an exception so the agro-industrial derivatives are sometimes generalized now and Puratos is making ingredients for bakers patissiers which is often containing fat, sugar, flour, we are not always able to benefit at full extent of FTA but the mindset is there with the leaders in the area, it’s positive to see that people want to build up free trade so we are definitely supportive for that by all means.”

05:57 European Commission’s Berlaymont building
06:14 Entrance to the European Commission’ Charlemagne building

06:20 Reinhard Priebe, Director for Western Balkans in EC DG Enlargement:

“We always hear that from the business community for investors don’t come to a region where every 300 km. the legislation, the institutions, everything is different. So the idea of step by step creating a bigger market, internal market like in the EU, is very much behind our thinking and it is our own experience.
But beyond that there are also political reasons, we have to deal with a region where there have been conflicts, wars, civil wars, and the regional cooperation is certainly also politically needed as an element of establishing stability, achieving peace and reconciliation.”

07:13 Cutaways Reinhard Priebe in his office

07:31 Reinhard Priebe:

“I think there is an agreement that the current arrangement of CEFTA is a good basis, CEFTA has of course to be developed and enlarged and I think that is where we stand now. At the end I don’t think anybody on our side would have extremely strong feelings on the name only. We would have strong feelings if something like the name issue would prevent us from concluding such an agreement, that would not be good but at the end the substance is more important than the name.”

08:09 Mary O’Mahoney – Trade expert, Stability Pact for SEE:

“As those agreements were negotiated and came in fact I think countries first of all saw the boost to trade among themselves and secondly got used to dealing with each other so therefore when we last year looked at this, we had 31 free trade agreements in the region which in one hand is a success for the sheer skill and dedication of the officials to negotiate all of these. It also creates quite frankly a bureaucratic nightmare for business people who want to trade or invest in the region, both of which we need very badly because they’re face with 31 slightly different sets of rules and secondly, for government agencies, think of customs at the borders, 31 different FTA pinned to the wall, trying to decide exactly how they should proceed. So I think this has quite led to the countries last June and the Ministers of Economy agreed to move to a Single Free Trade Agreement. Countries had seen the evidence in terms of boosting trade and they also had the good experience of working with each other.”

09:03 Shots of Mrs O’Mahoney talking to the journalists in EU Commission’s Press Room

09:15 Mary O’Mahoney:

“The foreign investors, when they are looking at SEE, they’re not interested in small markets of 2 or 3 or 4 million people, they need bigger markets and therefore by having a single free trade area where goods can be freely traded means that they will be willing to put an investment in one country because they can secure inputs for their products and then export their products freely and easily to the other countries of the region. It makes the region much more attractive as a destination because one of the key criteria for investors is: “what is my potential market?”

09:49 Bicycle shop near Gent (Belgium) that imports and sales bicycles from Macedonia.
Bicycle shop, exterior shots and exposed bicycles.

10:35 Owner of the shop, Bjorn

“In my shop it’s still a bit difficult to sell these bicycles because here we have a better public also but to most of them I’m selling other items and I give these bicycles for free to stimulate the other products. We call it the grey market, these bicycles are perfect for this but also it’s difficult to put here “Made in Macedonia”, if people see this, they’re still a little bit afraid of this. Because they think “cheap countries, hey”, they make a link with Chinese countries. And they are a little bit afraid for the quality”

11:28 labels on the bicycles indicating “Made in FYROM”

11:44 Owner of the shop:

“We have also language problems. My English is my English and his English is his English. English and English is two.
We have many problems. For example, for the driver we don’t find the truck anymore, couple of hours I don’t know where is the truck, they give me the number of the driver, if I call him we don’t understand nothing, not one word.”

12:11 Exterior shots of the supermarket “Candan – Marche du Monde”. This Turkish supermarket in the centre of Brussels sells products from all over Balkans

12:39 Interior shots of the supermarket showing biscuits “Napolitanke Jadro” (Croatian product) on the shelves
12:46 “Cajni kolutici” biscuits (Croatia)
12:51 Podravka soups from Croatia
12:58 Vegeta (mixed spices), Croatia
13:04 Ajvar and Pindjur (food products imported from Macedonia)
13:16 Macedonian paprika (food products from Macedonia
13:24 Kosovo pastirma, (meat product) Bosnian suho meso (meat product)

13:32 Reinhard Priebe, Director for Western Balkans in EC DG Enlargement:

“The EU some years ago, in 2000, made a very courageous step with the autonomous trade concessions which to put it in a simple way abolished most of our import duties for products from the region. It was a unilateral opening for trade relations and now we are in a phase where we are negotiating with the countries that this first step from our side will be one day completed by the countries by opening their borders to our products. Of course this needs a transition, it wouldn’t make any sense to overwhelm the markets with products from EU and by this destroying the internal industry, so it is an asymmetric process and it is very much a subject of negotiations and association agreements and trade agreements. What we have done with Albania, just finished and what we are about to do with Bosnia and Herzegovina and Serbia and Montenegro.”

14:44 Shots of Mr K.F. Falkenberg in his office

14:59 Karl Friedrich Falkenberg, Deputy Director General, EC DG Trade:

“The very simple trade rule is that you can only trade, export what you first have produced and we need to look at the conditions for production, for investment within the region and that requires predictable, transparent, regulatory frameworks but also trying to create a larger regional market so that from regional markets you can test developed new products and then become a more significant trade with the EU picking up on the preferential access that the region has.”

15:45 Exterior shots of the supermarket “GB Express” on Place Stefanie in central Brussels
15:58 Interior shots, various products
16:02 Fruit juice Next, imported from Serbia. Strawberry and apple juice written in Serbian and label with product description in French and Dutch

16:25 Karl Friedrich Falkenberg, Deputy Director General, EC DG Trade:

“China is obviously a very important recipient of foreign direct investment, including European investment but I do see that European investors pay attention to proximity, we have significant flows of European investment into the Eastern part of Europe, into the enlargement countries, but beyond, the criteria for investors very much is stability and transparency of the regulatory framework. An investor wants to be sure that if he brings his money into a country that the conditions under which he has calculated his investment are going to be stable an permanent so that he’s not going to lose his investment. So the more we can carry in the Balkans this notion of opened, stable, predictable investment environment, the more certainly their proximity to the EU market is going to be a major asset.”

17:51 GB Express supermarket - fruits and vegetables
17:57 general views from the supermarket, people shopping