The US administration has increased its pressure on Kosovo government to unconditionally lift the 100 percent tariffs on imported Serbian goods.
Last Friday, the Millennium Challenge Corporation announced it is suspending the implementation of its projects in Kosovo. In a press statement, MCC made it clear that the program will only resume after Kosovo lifts tariffs on Serbian goods.
The MCC is one of the US foreign aid agencies. It was established by the Congress in 2004, and it is independent from the State Department and the USAID.
The move follows several recent threats from high American officials to withdraw American assistance and military troops stationed in Kosovo.
Last week, republican senator David Perdue, member of the Senate Armed Services Committee, tweeted that if Kosovo won’t lift the tariffs it would face withdrawal of U.S. troops. His post was retweeted by Richard Grenell, President Trump’s special envoy for Kosovo and Serbia, and then retweeted in turn by President’s Trump son, Donald Trump Jr.
Tariffs on Serbian goods were introduced on November 2018 by the former Prime Minister Ramush Haradinaj, in the aftermath of Interpol’s rejection of Kosovo’s membership, lobbied by the Serbian Government. The move was meant to retaliate for Serbia’s aggressive and successful campaign to undermine Kosovo’s international recognition.
It gave the fatal blow to an already stagnated dialogue between Kosovo and Serbia to normalize their relations. For the past year and a half, the international community has tried to revive the dialogue by pushing Kosovo to lift the tariffs, which is a condition by Serbia for return at the dialogue table.
Following, Opposition’s victory in the October 2019 elections, Kosovo has a new coalition government between Movement for Self-Determination (LVV) and Democratic League of Kosovo (LDK), headed by VV’s leader Albin Kurti.
Giving in to international pressure, Kurti proposed in February a two-step strategy to phase out the tariffs, lifting the tariff on all raw materials from Serbia—accounting for about 65%-75% of all Serbian goods imported by Kosovo—and lifting the rest within a month, provided in the meantime Serbia reciprocates by stopping its derecognition campaign.
Kurt’s proposal was outrightly rejected by Grenell, who threatened him of consequences if he does not lift all tariffs unconditionally, including the withdrawal of American aid and international support.
Kurti reassured that the only fair strategy is reciprocity and that Kosovo will not remove all tariffs unless Serbia shows some goodwill to back off from its derecognition efforts.
This seems to be difficult as Serbian Foreign Minister announced last week that Serbia will not stop its efforts against Kosovo’s recognition until a final agreement had been reached.
Kurti seems unwavering in his position, and Grenell has tried to side-step him by propping up Hashim Thaçi, Kosovo’s current President and Kurti’s main political rival.
Two weeks ago Thaçi met with Vučič at the White House, in discussions coordinated by Richard Grenell.
In a clear effort to exclude Thaçi from negotiations with Serbia, Kosovo parliament decided last Friday to mandate Kosovo’s government as the only authority that could negotiate with Serbia. Such move strips Thaçi off any power to be involved in the process in the future.
It also brings US administration head to head with Kurti’s government. However, the US administration holds a lot of leverage over the government, as Kurti’s coalition partner, the Democratic League of Kosovo, has sided with the US supporting the immediate lifting of tariffs.