When Croatian companies are threatened abroad, we react quickly and actively

This year, foreign trade policy is particularly relevant, following a bombshell from Washington in the form of several times higher tariffs on European products. A recent agreement between the European and American sides has somewhat eased tensions, but the fact remains that current American tariffs on imports of European goods are three times higher than before. We discussed the direction of further transatlantic trade negotiations, how far we are from OECD membership, and what Croatian diplomacy has done and is still doing for Croatian exporters with Zdenko Lucić, State Secretary for Foreign Trade and Development Cooperation at the Ministry of Foreign and European Affairs.

What do your duties encompass?

– My job encompasses several key areas. Part of it relates to development cooperation and humanitarian aid, as well as Croatian foreign trade policy, which is an integral part of the European Union’s common trade policy. I also serve as the Deputy Chief Negotiator of the Republic of Croatia in the accession process to the Organisation for Economic Co-operation and Development (OECD). I am also the national commissioner of the Republic of Croatia for Expo 2025 in Osaka, where I am responsible for the entire process of building and setting up the Croatian pavilion and managing it at this world exhibition. At the international level, I chair the Steering Committee for Trade Capacities and Standards at the UN Economic Commission for Europe (UNECE) in Geneva.

How are the negotiations for OECD membership progressing?

– They are progressing very well. We have completed discussions before 20 of the 25 committees that assess Croatia’s compliance with OECD policies. For 19 of those 20 committees, a formal opinion has already been accepted, which is the final step in their formal legal closure. Within those 25 committees, there are 26 subcommittees or working groups, and we have already closed 24 of them. Therefore, Croatia is making very good progress. It is particularly noteworthy that among the six countries that began the accession process in 2022, Croatia was last in terms of compliance with OECD policies. At that time, we were at about ten percent compliance, while some countries were over sixty percent. Three years later, thanks to ambition and dedicated work, we are the best in the accession process. We have closed more committees than any other country in the accession process, of which there are now eight.

Is there any estimate of when the negotiations should conclude?

– The plan is to become an OECD member by mid-2026. Of course, not everything depends on us, but also on the political will of other countries. We are working on meeting the technical conditions, and we communicate with our partners, the member states, regarding everything else.

What else does Croatia need to align?

– We need to finish discussions before the remaining five committees and accept formal opinions for those committees, including the one for the Trade Committee. One of the remaining committees is the Economic and Development Review Committee. Within it, two economic reviews of Croatia are being conducted as one of the conditions for membership. The first economic review was published in 2023, and the plan is to complete the second by the end of this year and present it to the public in February 2026, perhaps even earlier. There is also the Corporate Governance Committee, within which is the Working Group for State-Owned Enterprises. The third is the Public Management Committee, and the fourth is the Working Group on Combating Bribery in International Business Transactions, with committee status. Among the remaining discussions before the committees is one before the Investment Committee.

Regarding the Corporate Governance Committee in state-owned enterprises, what else needs to be done here?

– In July, the Law on Legal Entities Owned by the Republic of Croatia was adopted. The next step is to adopt subordinate regulations and then discuss them before the Working Group for State-Owned Enterprises and subsequently before the Corporate Governance Committee in early November.

You mentioned that accession also depends on the political will of the member states; do you expect any problems there?

– No, we do not expect any at this time.

Not even due to the new American policy towards Europe?

– We have open and constructive discussions with the USA. Previously, we announced that the American partner requested to wait for the acceptance of the formal opinion for the Trade Committee. Trade negotiations between the EU and the USA are still ongoing.

How are those negotiations progressing, and what does the agreement between European Commission President Ursula von der Leyen and American President Donald Trump in Scotland mean for transatlantic trade relations?

– From the European side, the negotiations are led by the European Commission. Trade Commissioner Maroš Šefčovič and his team regularly contact American partners. America is not only an important trade partner for us but also a political one. The European and American economies are extremely interconnected; we are talking about the strongest global trade and investment partnership. Regarding the meeting in Scotland, you heard the statements from European Commission President von der Leyen and American President Trump. This political agreement brings a calming of trade tensions, and at the technical level, the details of implementation are being agreed upon. This is just an initial agreement; we believe in the continuation of dialogue with the American side.

At our local level, in the context of the trade war, an Interdepartmental Commission for Monitoring Exports to the USA has been established. What are the goals of this body?

– The government established this commission on April 16, chaired by Minister of Economy Ante Šušnjar, and I serve as the Deputy Chair. It consists of key state institutions, business associations such as the Croatian Chamber of Commerce, the Croatian Employers’ Association, Croatian Exporters, and the Croatian Bank for Reconstruction and Development. Its task is to monitor the new American customs policy, its impact on Croatian exports and the economy in general, and to propose measures to protect our companies. It is essential for us to have relevant data and analyses so that we can define the positions we present to EU bodies and propose activities to protect our companies and our economy.

Is there already a proposal for measures?

– At this moment, the most important thing is that an agreement has been reached that stabilizes transatlantic trade and that dialogue continues, so we hope that additional measures will not be necessary. Regarding proposals for measures, the EU has a ready and accepted package of countermeasures that is currently suspended as a result of the agreement. In adopting that package, we consulted with Croatian entrepreneurs through the Interdepartmental Commission and business associations. Depending on the development of the situation, other measures will be considered at the European level if necessary.

In a survey conducted by Lider among entrepreneurs in April, after the announcement of American ‘reciprocal tariffs’ to the rest of the world, entrepreneurs frequently emphasized that they expect support from the government in opening alternative markets. Can it help them in that way?

– As part of our regular work to assist our companies, we are actively working on supporting the opening of new export markets. We organize economic missions abroad. There, together with the Croatian Chamber of Commerce, we organize business forums to help our companies find partners, open sales channels, or realize investments that would enable them to have a stronger presence in those markets. Since we are an EU member, we apply 44 free trade agreements covering 76 countries. Our position is that new trade agreements need to be concluded to facilitate access to new markets for our companies. We are systematically working to ensure that our companies, not only in the context of American tariffs, have the best possible access to global markets. Thus, as part of the World Expo Expo 2025 in Osaka, Japan, we are organizing Croatian National Day on September 21, during which we will hold a business forum with the Croatian Chamber of Commerce and Japanese partners. More than sixty Croatian companies have confirmed their participation, and I expect their quality and notable performance. The Croatian Olympic Committee and the Croatian Football Federation will also join the delegation as part of our promotional and sports diplomacy activities.

What are the results after these business forums organized by the government abroad? Are there concrete investments and contracts following them?

– Such forums are usually well attended by our companies, and their quality is evidenced by the fact that many companies participate repeatedly because they have realized certain sales and collaborations or investments this way. This approach is particularly effective in countries where it is desirable for the first contact to be made through official channels.

In what ways does the diplomatic network represent the economic interests of Croatia and our companies?

– The role of the Ministry of Foreign and European Affairs and our diplomatic network, beyond their primary function of diplomatic and consular affairs, is to promote economic interests. The goals are to support our companies in exporting goods and services and to protect their interests if they face problems in certain markets. The third aspect is assistance in attracting investments, directing the interest of foreign companies towards investing in Croatia. The part of internationalization is also important, where our diplomatic and consular network is available to companies that want to open and realize investments abroad.

How can the diplomatic network specifically help companies?

– It depends on the location, size, and needs of the company. In closer markets and those without language barriers, our companies conduct most activities themselves. Where they need help, our support extends from finding suitable partners, understanding local regulations, to company registration, as well as participation in public tenders. This type of assistance is especially valuable for small and medium-sized enterprises, which often do not have their own resources to research foreign markets. Our network regularly informs business associations about business opportunities abroad wherever our companies can offer something.

You mentioned support if they encounter problems. What kind of problems are those, and in which countries do they occur most?

– For example, in public tender procedures, our companies sometimes face unfair competition and attempts to circumvent tenders abroad. In such cases, we react to the relevant authorities to prevent such practices, especially when we have timely information that something like this is being prepared during the process. We then react quickly and actively. Even in countries where we do not have representation, we have tools to eliminate trade barriers with the help of EU delegations and working bodies of the European Commission.

What would you highlight as the greatest achievements of our economic diplomacy so far?

– Economic diplomacy is an important instrument for promoting economic interests for all countries, including Croatia. With the help of our network, we support Croatian exports, attract investments, and strengthen international cooperation. Since gaining independence, Croatia has built a serious network of diplomatic and consular offices around the world, and their task is to promote economic interests and be at the service of our entrepreneurs. From my experience, I can say that Croatia as a business-investment destination is now much better and more competitive than it was, for example, twenty years ago when I started working on attracting and promoting investments. Our products and services, that is, our companies, are more competitive in the global market, which is evident in the growth of investments and the number of jobs, as well as the growth of our economy. The role of economic diplomacy is not limited to these practical aspects but also to creating an appropriate regulatory framework for international trade through everything mentioned earlier: participating in trade negotiations, concluding international agreements, and participating in the work of international economic organizations.

Are there positive practices in other countries in the region regarding economic diplomacy that Croatia could adopt?

– Everyone invests in international promotion. Of course, we observe what the trends and best practices are in the world, not just in the neighborhood. Different countries have different models, depending on their economic strength and how oriented they are towards specific markets. A good example is Austria and its foreign trade offices within its economic chamber that provide services to Austrian companies worldwide.

Besides money, is the Austrian model applicable to us?

– Both models have similarities in practice. The Croatian diplomatic network has global coverage. Furthermore, the Croatian Chamber of Commerce also has offices abroad. We operate synergistically, in the function of providing services to our entrepreneurs.

Let’s briefly return to European trade relations – the EU recently completed negotiations with a group of South American countries gathered in Mercosur. What could this agreement bring to Croatian companies?

– When looking at trade exchange data, it is evident that the EU imports primary products from Mercosur countries and exports high value-added products. With this agreement, the EU would continue to maintain a stable trade relationship and secure important resources and markets for its industry. Furthermore, for Croatian companies, more than fifty of which already export to the Mercosur area, it would ensure easier access to those markets.