THE 100% TAX ON SERBIA’S PRODUCTS AND INTERNATIONAL PRESSURE ON KOSOVO

Abstract

With the imposition of a 100% tax in November 2018 for products originating from Serbia and Bosnia and Herzegovina, the Government of the Republic of Kosovo, like never before, reacted to aggressive Serbian diplomatic politics. As a result of Serbian diplomacy, recognitions have been contested, causing Kosovo to fail in membership in international organizations. According to the current prime minister, the Government of Kosovo is determined until the Serbian state reflects, despite the international pressure until recognition of Kosovo, as an independent country in mutual recognition. The tax, at the same time, was the awareness that every citizen tried to avoid consuming products of Serbian origin. But, despite the economic effects, Kosovo is being asked to withdraw or suspend the tax based on the principles of CEFTA and SAA, at the same time asking Kosovo to give priority to dialogue and that pressure comes from Serbia with the lobbying that it does in countries that have an impact on Kosovo. As a result of pressure, Kosovo should reflect on its friends and strategic partners because a shrinking friendship is in favor of Serbia, despite the argument that Kosovo has. Through this paper, we will bring scientific analyzes from local and international media and we will bring statements from local and international statesmen, as well as analysis from economic case-tellers by bringing conclusions and recommendations on how to approach the Kosovo Government tax and exit from this international political pressure.When a country unilaterally raises a trade barrier, other countries usually follow the same example, ie raising their trade barriers, which escalate to a large-scale commercial war, or even worse, to a military war . During the 1930s, the United States decision to set up a trade barrier ended with the famed planetary depression, or - as others say - with the onset of the Second World War. Each country wants to have full access to international markets, but at the same time, many governments and states try to help local producers in competing with foreign producers. Although consumers and businesses have their benefits of unrestricted access to imports, often governments are unable to withstand the political pressure coming from inefficient industries. (Epping, 2007, p. 71). Although a trade war may not be as destructive as a war between the armies, in both cases we have people who suffer (often those people whose defense has started the war itself). The most common barriers to trade are quotas, fees and subsidies. By imposing a quote, a country limits the amount of foreign products that can be imported. The tariff is a tax - paid for goods crossing the country's customs points, which makes the price of manufactured goods abroad to rise. Governments, on the other hand, may use taxpayers' money to provide subsidies to domestic producers, which makes the local commodity price artificially lower than the price of imported goods. (Epping, 2007, p. 69.70). With the industrial revolution and the overcoming of mass production and distribution mass, in the 19th century, have come up the new challenges of the scientific approach to the market and the different approaches of knowledge gained in school trade. (Segetlija, 2009, p.24). The welfare economy represents a theory that gives us the basic arguments of government intervention in the economy. One of the main arguments discussed so far relates to "market failures", which appear to be impossible to regulate without the government intervening in the market by imposing taxes and making expenditures that also effect redistribution of income in a desirable way from a social point of view. On the other hand, other theories point to "government failures," which appear alongside market ones, and are the source of the overwhelming public discontent over the government's role. (Haderi, Milova, 2015, p. 143).