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Tit-for-tat trade war: a sign of things to come?
The migrant crisis in Europe is now exacerbating tensions in the western Balkans. A tit-for-tat border dispute over refugee flows between Serbia and Croatia escalated into a mini-trade war on September 19th‑25th. The tussle was due to the EU's failure to devise a coherent response, which resulted in thousands of migrants being stranded in a no-man's land on the border between the two countries. As the EU continues to strengthen its borders against refugees, and war in the Middle East rages on, intra-regional tensions in the western Balkans are likely to rise.
Since Hungary fortified its southern border with Serbia with a three-metre-high, razor-wire fence—which was completed on September 15th—the main route for migrants seeking entry to the EU has been blocked. Until then people fleeing wars in Afghanistan, Iraq and particularly Syria were seeking entry to the visa-free Schengen travel zone of the EU by crossing from Serbia into Hungary (Hungary being the only Schengen-zone country that borders Serbia). Some 170,000 migrants are estimated to have travelled across Serbia this summer alone, and the flow continues unabated. Since the construction of the Hungarian border fence, the Serbian government has responded by bussing refugees from its southern border with Macedonia directly to Croatia, which is a member of the EU (although not of Schengen). From there the migrants have continued northwards to Germany and Scandinavia.
From border dispute to mini-trade war
Claiming insufficient capacity to provide for the number of refugees entering the country, on September 19th Croatia responded to the influx from Serbia by closing seven of eight border crossings to all but perishable goods. Serbia retaliated from midnight the same day by blocking Croatian goods and vehicles from entering Serbia. Angry truckers confronting 12km-long traffic jams responded by blocking the remaining Croatian border crossing. Croatian authorities escalated their measures by halting all Serbian-registered vehicles and barring Serbian citizens from crossing the border, which in turn drew strong protest from the Serbian foreign ministry. The ministry inflamed the situation with rhetoric that compared the Croatian embargo to the violent anti-Serbian policies of the Croatian Nazi puppet state during the second world war. On September 25th the EU enlargement commissioner, Johannes Hahn, called on Croatia to open its border during a speech delivered in Belgrade, Serbia's capital. Croatia complied that day, prompting Serbia to reopen its border too.
With fragile economies weighed down by unemployment, neither country can afford a border dispute that disrupts the movement of goods, let alone a tit-for-tat trade war. Serbia is especially vulnerable: as a result of being landlocked, most of its exports have to travel overland across Croatia towards the wealthy core of the EU, or northwest to the Adriatic Gate Container Terminal on the Croatian coast. Serbia is also a major transit point for goods coming from Greece, Turkey and further afield towards northern and western Europe. The Serbian Chamber of Commerce has already said that it is considering legal action against the Croatian government for loss of revenue stemming from the dispute.
Migrant crisis could reawaken old hostilities
Although relations between Croatia and Serbia have fluctuated since wars associated with the break-up of Yugoslavia in the early 1990s, the border crisis has the potential to undermine the hard-won improvements in relations made thus far, including in trade, diplomacy and movement of their respective citizens between the two countries. The renewed tensions will sharpen already simmering disputes over the rights of the ethnic Serb minority in Croatia. Mr Hahn warned that Europe should take care that the migrant challenge "doesn't trigger old conflicts which we thought had already been settled". In countries where tensions borne of past conflicts are never far from the surface, it is not difficult to imagine that the continued migrant influx could exacerbate such tensions and lead to a further fraying of relations. Croatia could even try to hamper or delay Serbia's membership negotiations with the EU.
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