(BELGRADE) - Serbia vowed Wednesday to press on and implement a European Union trade deal despite anger at a Dutch veto that came even though Belgrade arrested top war crimes suspect Radovan Karadzic.

Bozidar Djelic, Serbia's deputy prime minister for EU integration, said in an interview with a local newspaper that he was "infuriated" by the Netherlands' refusal to unfreeze the EU trade and aid pact.

But despite the setback, Serbia would now look at "unilaterally" implementing parts of the accord as proposed to him by EU Enlargement Commissioner Olli Rehn, Djelic told the daily Vecernje Novosti.

"I am disappointed and infuriated, just like (Serbian citizens)" about the Dutch veto, he was quoted as saying. "I feel an injustice has been done to us by one country -- the Netherlands."

EU foreign ministers on Monday failed to convince their Dutch counterpart, Maxime Verhagen, to drop his country's objections to unfreezing the accord despite Belgrade's improved track record on war crimes.

UN chief war crimes prosecutor Serge Brammertz had told the EU ministers there was "very clear progress" in Serbia's cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY).

That appraisal followed Serbia's arrest in July of former Bosnian Serb leader Karadzic, some 13 years after the ICTY indicted him on charges of genocide and crimes against humanity over his role in Bosnia's 1992-1995 war.

Serbia's new pro-West government argues Karadzic's arrest is proof enough of its determination to cooperate with the UN tribunal based in The Hague, the main precondition and obstacle to its EU integration.

But the Netherlands insists it will only lift its veto once Belgrade arrests the two remaining war crimes fugitives, wartime Bosnian Serb general Ratko Mladic and former Croatian Serb leader Goran Hadzic, or Brammertz reports that Serbia is "fully cooperating" on war crimes.

Djelic slammed as "deplorable the fact that one minister (Verhagen) took it upon himself to slow down Serbia's European integration despite a clear positive opinion" from all other EU states and Brammertz.

But he said he was "encouraged" by the backing Serbia received from other EU members to unblock the agreement, which is part of a Stabilisation and Association Agreement (SAA) seen as a first step to EU membership.

"Serbia has never had such a degree of support. We will continue to defend our strategic interests (including) EU adhesion by 2014," he said.

Looking ahead, he said Belgrade would ask the European Commission to guarantee it backed the unilateral implementation of the accord. This would involve harmonising Serbia's laws with the bloc to improve its chances of winning EU candidacy by mid-2009.

"The decision to start implementing the SAA unilaterally will be taken by the government in dialogue with President Boris Tadic," said Djelic.

The newspaper Politika warned Wednesday of the consequences of the Dutch decision in a country where the public has grown weary of Western "stick and carrot" strategies.

For Serbs, the policy of Belgrade only having to "fulfill one more request for Europe to welcome us into its arms" was becoming just an "illusion," said the influential daily.

Goran Svilanovic, Belgrade's first foreign minister after the ouster of former autocratic president Slobodan Milosevic, said the failure to implement the EU trade pact was a setback for Serbia and the 27-nation bloc.

"For Serbia, it's a bad step for economic reasons... Serbia lost 10 years and wasted so much time that I am counting as double each day that we lose from now on," Svilanovic told AFP.

"For the EU, the decision is bad because it has created... the feeling that there is no system of European values around which the EU is united," he said of divisions over Serbia and Kosovo.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.