The investments of U.S. companies in Serbia, which are estimated to total 4.9 billion dollars, the great upsurge of trade in services over the last few years and the progressive growth of the goods exchange, which exceeded a billion dollars for the first time ever in 2022, represent the latest characteristics of the balance sheet in the growing economic cooperation between America and Serbia, interpreted in specific figures
Despite mutual goods exchanges having tripled over the past decade, and last year’s increase of almost 28 percent leading to a record total of 1.27 billion dollars in 2022, the bilateral trade exchange remains below realistic possibilities. And although Serbian exports have experienced a 5.6-fold increase since 2012, they still stand at a value of just 540.8 million dollars, without more significant structural changes.
When it comes to the U.S. market, manufacturers from Serbia last year mostly sold pneumatic tires for outdoor use, engine parts, frozen raspberries, circulator pumps and traditional export products of the arms industry – hunting and shooting sports equipment and ammunition. American exporters to Serbia practically didn’t sell goods of a much higher value either, despite recording a better performance of 725.4 million dollars on the Serbian market.
Apart from medicinal drugs, diagnostic and laboratory reagents, medical instruments and appliances, the list of imported products also includes turboprop engines and plastic products, while it was last year top by airplanes, which are overhauled here and subsequently returned to the U.S. Analyzes conducted locally indicate that the potential to increase trade exists in all segments of the economy – from the agriculture and food sectors, via the metal industry (auto parts and metal processing), to the textile and furniture industries, etc.
The number of American investors in Serbia is increasing, while their contribution to the Serbian economy is also on the rise. More than 600 companies with majority American capital are registered in Serbia and employ more than 30,000 workers
Observing local companies and American firms that have invested in Serbia, and that produce in and export from Serbia, indicate that the resumption of activities on the signing of a bilateral agreement on the avoidance of double taxation, and the extension or renewal of the GSP (Generalized System of Preferences) program that expired at year’s end 2020, would contribute to improving the mutual utilization of the existing potential and increasing trade between Serbia and the U.S., but would also motivate new American investors to invest in Serbia.
Ever more importance in total trade between the two countries is being gained by the exchange of services, which are less burdened by the great distance between the markets and last year reached a total value of 1.33 billion dollars. America has been the number one export market for Serbian services over the past two years, ranking ahead of Germany, the UK, and Switzerland. In stark contrast to trade in goods, which is marked by a constant deficit on the Serbian side, Serbia is recording a surplus in the exchange of services, which exceeded the value of a billion dollars in 2022. The highest revenue generated from the export of services to the American market – accounting for a whopping 55 percent – was achieved through the export of telecommunication, computer and information services, with slightly more than half of that total accounted for by computer services, i.e., software programming services.
The biggest stamp on the record of economic cooperation between Serbia and the U.S. is provided by the investments of American companies in Serbia, which – if we also take into account investments made by the European subsidiaries of American companies (which official statistics formally base on the source country of payment and not the origin of the capital invested) and investments made by U.S. companies while already operating in Serbia – have approached the figure of five billion dollars, according to U.S. sources in Serbia. The number of American investors in Serbia is increasing year on year, while their contribution to the Serbian economy – through production operations, exports, and the creation of new jobs – is also on the rise. More than 600 companies with majority American capital are registered in Serbia and employ more than 30,000 workers.
Apart from the leading companies in terms of investment levels to date, which include Philip Morris International, PepsiCo, Coca-Cola Hellenic or Ball Packaging, investments in Serbia’s manufacturing sector have also been made by Cooper Tires and Cooper Standard Automotive, Van Drunen Farms, Johnson Controls, West Pharmaceutical Services, Lear Corporation, Ametek, etc. The world’s leading hotel brands – Hilton, Marriot, and Radisson – have also arrived in Serbia.
A great incentive to strengthening trade and economic ties between the two countries, and to stimulating new American investments in the country, will be provided by the activities of the recently established American-Serbian Business Council (ASBC)
Over recent years, the interest of American investors has increasingly extended beyond the scope of traditional sectors in which they have previously invested the most, such as the food, tobacco and automotive industries, telecommunications, IT, tourism etc. Or rather, the interest of U.S. investors is expanding and focusing primarily on ICT and clean technologies – the energy sector and environmental protection – but is also extending to new fields, such as biotech and biomedicine. This was confirmed late last year by the Trade Mission of the U.S. Government, representing the first such mission in the last two decades.
The biggest investment to date in the ICT sector and shared services has been in the NCR tech campus, while the Development Agency of Serbia’s list of the top investors also includes Microsoft, which has provided an incalculable contribution during its almost two decades operating on the Serbian market. Other investors in this sector include Sitel, EBV Elektronik [Avent], TeleSign, GroundLink etc. Other major American technology companies (Oracle, IBM, Cisco, Motorola, Dell, Honeywell, etc.) have been present in Serbia and the region for years, through various forms of business. Amazon has also practically arrived in Serbia, through its partnership agreement and first contract with Telekom Srbija.
Providing special high quality to cooperation between the two economies are the U.S. companies that have established their own R&D and technology centers in Serbia. Apart from Microsoft, which opened its fourth development center worldwide in Serbia back in 2005, thereby fortifying its position at the global level, companies IBM and Rivian also opened their own R&D centers in Serbia late last year. We are also recording examples of acquisitions in the IT sector that are proving to be mutually excellent.
In the domain of energy, and in anticipation of the signing of the announced agreement on strategic cooperation in this area that is currently being negotiated by the two governments, U.S. companies are interested in investing in new, modern energy capacities in Serbia, primarily in the RES field. And it isn’t only American capital that’s important for Serbia and the region, but rather also the modern technologies they bring and the transfer of knowledge in the transition to green energy, decarbonization and diversification in production and supply, and increasing energy efficiency, but also in the implementation of regional connectivity projects.
Alongside progress in the building of a common regional market and consolidating regional integration in the Western Balkans under the scope of the Open Balkan Initiative, which enjoys U.S. support, a great incentive to strengthening trade and economic ties between the two countries, and to stimulating new American investments in the country, will be provided by the activities of the recently established American-Serbian Business Council (ASBC), which represents a platform for intensifying dialogue between the two cou