Bosnia violates trade pact, EU commitments: EU

(SARAJEVO) - The European Union said Friday that Bosnia had violated a regional trade pact and its committment toward the bloc by adopting a law aimed at protecting domestic production.

"This is a violation of Bosnia-Hercegovina's obligations under the CEFTA agreement," a statement from the EU's Bosnian office said, adding it "regrets the adoption of the law."

The Bosnian parliament adopted the law imposing higher customs duties on nearly 1,000 items on Thursday, despite EU warnings it would violate the Central European Free Trade Association accord (CEFTA) reached in 2006.

The move "contradicts (Bosnia's) commitments under the Stabilisation and Association Agreement (SAA)," the statement said, reffering to the trade and aid pact seen as a first step for western Balkan nations hoping to join the EU.

Since the SAA agreement was "the gateway to EU candidate status, this is a very serious matter," the statement warned.

"The EU urges Bosnia-Hercegovina to consult with its neighbours and other CEFTA partners to avoid a harmful and unnecessary trade dispute," it added.

The adoption of the protective measures is expected to affect neighbouring Croatia, whose exports to Bosnia last year came to around 1.7 billion euros (2.4 billion dollars).

Croatia tops the list of leading exporters to Bosnia followed by Serbia.

The CEFTA accord was expected to boost regional trade and to prepare members for the EU single market.