Image copyright Getty Images Image caption The tariff hikes are likely to bring trade between Kosovo and Serbia to a halt

Kosovo has slapped 100% customs tariffs on Serbian imports, blaming the government in Belgrade for its latest failed bid to join international police organisation Interpol.

Serbia immediately warned that the decision would bring all trade to a halt and the EU said the decision had to be revoked immediately.

Kosovo seceded from Serbia in 2008 but is not recognised by Belgrade.

But both are part of the Cefta Balkan free-trade area.

How did the trade row start?

Tensions between the two neighbours spilled over on 6 November, when Kosovo imposed an additional 10% customs tariff on Serbia and Bosnia-Herzegovina, for conducting an "aggressive campaign".

Kosovo was angered by the decision of a succession of small states to reverse their recognition of its independence, and accused Belgrade of orchestrating the moves.

More than 110 nations do recognise the majority-Albanian republic, but Russia and some EU member states including Spain and Greece do not.

After Interpol's general assembly rejected Kosovo's third bid for membership in three years on Tuesday, Kosovo complained of a "fierce campaign" conducted by Serbia against the idea of normalising relations with its former province. Kosovo had spent a reported €1.2m lobbying for Interpol membership.

Serbian officials were thought to be concerned that once a part of the police organisation, Kosovo would start seeking the arrest of commanders suspected of war crimes during the 1998-99 war.

Kosovo hit back on Wednesday, hiking the tariffs to 100% for Bosnia as well as Serbia. Authorities were also told to remove some products from shelves if they did not refer to the Republic of Kosovo.

How significant is the row?

Kosovo imports some €400m (£350m; $450m) worth of goods from Serbia a year, so the decision to effectively bring that trade to a halt will harm both sides.

President Aleksandar Vucic convened a meeting on Wednesday of Serbia's National Security Council to consider a response. "We will react rationally, calmly and responsibly," he said afterwards, Serbia's B92 website reported. He is also due to meet Kosovo Serb leaders on Thursday.

Although relations have nose-dived, the two sides have been involved in EU-led talks to normalise relations. EU foreign policy chief Federica Mogherini hosted a meeting earlier this month involving the Serb leader and Kosovo President Hashim Thaci.

As recently as September, there was intense speculation that the two sides were considering a potential land swap to end the stalemate between them.

In her statement on Wednesday, Ms Mogherini said the Kosovo trade tariffs were a "clear violation" of the Cefta trade agreement which takes in eight other Western Balkan countries.

"The Kosovo government has to immediately revoke these decisions," she said.

An EU official said they wanted the measures withdrawn quickly so work could continue towards normalising relations, a precondition for both sides for entering the European Union.</s>TIRANA (Reuters) - Kosovo on Wednesday raised customs tariffs on Serbian and Bosnian goods from 10 to 100 percent after Serbia blocked its former province from joining Interpol, the international police organization.

Its retaliation, which was criticized by the European Union, also required authorities to remove or prevent from entering any goods that did not address Kosovo by its constitutional name, Republic of Kosovo, which Serbia and Bosnia do not recognize.

“This will halt any trade between Serbia and Kosovo,” Serbia’s Trade Minister Rasim Ljajic said.

President Aleksandar Vucic called a meeting of Serbia’s National Security Council to review the tariffs.

Bosnia, Kosovo and Serbia - along with Albania, Montenegro and Moldova - are part of the Central European Free Trade Agreement (CEFTA) set up to help ex-communist states harmonize their economic and legal systems with EU demands.

The EU’s foreign policy chief, Federica Mogherini, said Kosovo’s move was a clear violation of CEFTA and of the spirit of the Stabilisation and Association Agreement between the European Union and Kosovo.

“The Kosovo government has to immediately revoke these decisions,” Mogherini said in a statement.

Bosnia’s Foreign Trade and Economic Relations Minister Mirko Sarovic said: “This is the biggest blow to the regional free trade zone.”

According to official figures, Serbia’s exports to Kosovo amounted to 440 million euros ($500 million), while imports amounted to 21 million euros. Bosnia’s exports to Kosovo reached 80 million euros last year.

Two weeks ago Kosovo imposed a 10 percent import tax on goods coming from Serbia and Bosnia. The European Union has urged Pristina to reverse that decision.

Kosovo’s mostly ethnic Albanian population declared independence from Serbia in 2008, a decade after a NATO bombing campaign to end the killing of Albanian civilians by Serb forces during a two-year insurgency.

It is now recognized by more than 110 nations but not by Serbia, Russia or five EU states. Belgrade and Moscow have blocked Kosovo from joining the United Nations.

In 2013 both countries agreed to an EU-sponsored dialogue to resolve outstanding issues, but little progress has been made.

Kosovo blamed a campaign by Serbia for its failure to join Interpol and said Serbia was against normalizing relations, key for both countries if they are to join the European Union. Bosnia also voted against Kosovo’s membership.

“The government has decided to impose a tax of 100 percent on imported goods coming from Serbia and Bosnia,” Prime Minister Ramush Haradinaj said.</s>"Today's decision of the Kosovo Government to increase the tax on goods from Serbia and Bosnia and Herzegovina to 100% is a clear violation of the Central European Free Trade Agreement (CEFTA) and of the spirit of the Stabilisation and Association Agreement between the European Union and Kosovo. It further exacerbates the situation following the initial imposition of 10% tax increase last week. The Kosovo government has to immediately revoke these decisions," Mogherini said in a statement.

Kosovo unilaterally proclaimed independence from Serbia in 2008 and is recognized by over 100 UN member states. Serbia, as well as Bosnia and Herzegovina and some other countries do not recognize Kosovo’s independence.

READ MORE: Kosovo PM Threatens to Demand President Resignation Over Talks With Belgrade</s>TIRANA, Albania (AP) — Kosovo’s government says it will put a 100-percent import tax on all goods imported from Serbia and Bosnia-Herzegovina as diplomatic tensions rise. Wednesday’s decision appears to be retaliation against what Deputy…

TIRANA, Albania (AP) — Kosovo’s government says it will put a 100-percent import tax on all goods imported from Serbia and Bosnia-Herzegovina as diplomatic tensions rise.

Wednesday’s decision appears to be retaliation against what Deputy Prime Minister Enver Hoxhaj said was Serbia’s “aggressive campaign against Kosovo on the international stage.” A day earlier, Kosovo failed to join Interpol because of what it claimed was campaigning by Serbia.

“That was a very aggressive stand from Serbia,” Prime Minister Ramush Haradinaj told a news conference.

The tariffs come into power immediately and don’t apply to international brands produced in the two neighboring countries.

Haradinaj said that Serbia and Bosnia had never respected the Central European Free Trade Agreement, or CEFTA, rules in the trade relations with Kosovo, causing significant financial losses.

Earlier this month, Kosovo introduced a 10-percent tax on goods from Serbia and Bosnia-Herzegovina, both of which haven’t recognized Kosovo’s 2008 independence.

Serbian President Aleksandar Vucic has called the national security council, Serbia’s top body dealing with the military and police, to address the issue, according to state Tanjug news agency.

Despite simmering tensions between Serbia and Kosovo, business ties have grown and Serb imports to Kosovo amount to about 400 million euros ($460 million) a year, while Kosovo’s exports to Serbia are much lower.

Serbian Trade Minister Rasim Ljajic said Kosovo’s move came as a result of its failure to get an Interpol seat.

Bosnian Foreign Minister Igor Crnadak likewise called the tariff “payback” for the Interpol decision.

EU foreign policy chief Federica Mogherini called on Kosovo to revoke the decision, saying that “is a clear violation of the Central European Free Trade Agreement (CEFTA) and of the spirit of the Stabilization and Association Agreement between the European Union and Kosovo.”

Zahir Tanin, head of the U.N. Mission in Kosovo, also expressed his “concern regarding the potential impact on the people of Kosovo as well as the political implications on the dialogue and normalization of relations between Belgrade and Pristina.”

Kosovo and Serbia have been in European Union-mediated negotiations for seven years. The EU has told the two sides they must normalize relations as a precondition to entering the bloc. Vucic has said that Serbia wouldn’t take part in the talks until Kosovo lifts the recently-introduced taxes.

“It is 20 years since the war, 10 years from independence, and Serbia has not shown the good will to normalize ties,” Haradinaj said.

Dusan Stojanovic contributed from Belgrade, Serbia, and Amer Cohadzic from Sarajevo, Bosnia-Herzegovina.

Copyright © 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.</s>Kosovo has raised customs tariffs on Serbian and Bosnian goods from 10 to 100 per cent after Serbia blocked its former province from joining Interpol.

Its retaliation, criticised by the European Union, also requires authorities to remove or prevent from entering any goods that do not address Kosovo by its constitutional name, Republic of Kosovo, which Serbia and Bosnia do not recognise.

"This will halt any trade between Serbia and Kosovo," Serbia's Trade Minister Rasim Ljajic said.

President Aleksandar Vucic called a meeting of Serbia's National Security Council to review the tariffs.

Bosnia, Kosovo and Serbia - along with Albania, Montenegro and Moldova - are part of the Central European Free Trade Agreement (CEFTA) set up to help ex-communist states harmonise their economic and legal systems with EU demands.

The EU's foreign policy chief, Federica Mogherini, said Kosovo's move was a clear violation of CEFTA and of the spirit of the Stabilisation and Association Agreement between the European Union and Kosovo.

"The Kosovo government has to immediately revoke these decisions," Mogherini said.

According to official figures, Serbia's exports to Kosovo amounted to 440 million euros ($A690 million), while imports amounted to 21 million euros. Bosnia's exports to Kosovo reached 80 million euros last year.

Two weeks ago, Kosovo imposed a 10 per cent import tax on goods coming from Serbia and Bosnia. The European Union has urged Pristina to reverse that decision.

Kosovo's mostly ethnic Albanian population declared independence from Serbia in 2008, a decade after a NATO bombing campaign to end the killing of Albanian civilians by Serb forces during a two-year insurgency.

It is now recognised by more than 110 nations but not by Serbia, Russia or five EU states. Belgrade and Moscow have blocked Kosovo from joining the United Nations.

In 2013, both countries agreed to an EU-sponsored dialogue to resolve outstanding issues, but little progress has been made.

Kosovo blamed a campaign by Serbia for its failure to join Interpol and said Serbia was against normalising relations, key for both countries if they are to join the European Union.</s>Kosovo's government says it will put a 100 percent import tax on all goods imported from Serbia and Bosnia-Herzegovina as diplomatic tensions rise.

Wednesday's decision seems to be retaliation against what Deputy Prime Minister Enver Hoxhaj said was Serbia's "aggressive campaign against Kosovo in the international stage." A day earlier, Kosovo failed to join Interpol due to what it claimed was campaigning by Serbia.

"That was a very aggressive stand from Serbia," Prime Minister Ramush Haradinaj told a news conference.

The tariffs come into power immediately and do not apply to international brands produced in the two neighboring countries.

Haradinaj said that Serbia and Bosnia had never respected the Central European Free Trade Agreement, or CEFTA, rules in the trade relations with Kosovo, causing significant financial losses.

Earlier this month, Kosovo introduced a 10 percent tax on goods from Serbia and Bosnia-Herzegovina, both of which have not recognized Kosovo's 2008 independence.

Serbian President Aleksandar Vucic has called the national security council, Serbia's top body dealing with the military and police, to address the issue, according to state Tanjug news agency.

Despite simmering tensions between Serbia and Kosovo, business ties have grown and Serb imports to Kosovo amount to about 400 million euros ($460 million) a year, while Kosovo's exports to Serbia are much lower.

Serbian Trade Minister Rasim Ljajic said Kosovo's move came as a result of its failure to get an Interpol seat.

The foreign minister of Bosnia Hercegovina, Igor Crnadak, likewise called the tariff "payback" for the Interpol decision.

Kosovo and Serbia have been in European Union-mediated negotiations for seven years. The EU has told the two sides they must normalize relations as a precondition to entering the bloc. Vucic has said that Serbia would not take part in the talks until Kosovo lifts the recently- introduced taxes.

"It is 20 years since the war, 10 years from independence, and Serbia has not shown the good will to normalize ties," said Haradinaj.

Dusan Stojanovic contributed from Belgrade, Serbia, and Amer Cohadzic from Sarajevo, Bosnia-Herzegovina</s>TIRANA, Albania (AP) - Kosovo's government says it will put a 100-percent import tax on all goods imported from Serbia and Bosnia as diplomatic tensions rise.

Wednesday's decision appears to be retaliation against what Deputy Prime Minister Enver Hoxhaj said was Serbia's "aggressive campaign against Kosovo on the international stage." A day earlier, Kosovo failed to join Interpol because of what it claimed was campaigning by Serbia.

"That was a very aggressive stand from Serbia," Prime Minister Ramush Haradinaj told a news conference.

The tariffs come into force immediately. They don't apply to international brands produced in the two neighboring countries.

Haradinaj said that Serbia and Bosnia had never respected the Central European Free Trade Agreement, or CEFTA, rules in trade relations with Kosovo, causing significant financial losses.

Earlier this month, Kosovo introduced a 10-percent tax on goods from Serbia and Bosnia, neither of which have recognized Kosovo's 2008 independence.

Serbian President Aleksandar Vucic called a meeting of the national security council, Serbia's top security body, to address the issue. He said after the meeting that Kosovo's move amounted to a de-facto trade ban, but that Serbia won't retaliate.

"The consequences could be catastrophic and destructive for relations in the entire region," said Vucic, urging international pressure on Kosovo to revoke the decision. "This has to stop, there is no other option."

Despite simmering tensions between Serbia and Kosovo, business ties have grown and Serb imports to Kosovo amount to about 400 million euros ($460 million) a year, while Kosovo's exports to Serbia are much lower.

Serbian Trade Minister Rasim Ljajic said Kosovo's move was as a result of its failure to get an Interpol seat.

Bosnian Foreign Minister Igor Crnadak likewise called the tariff "payback" for the Interpol decision.

EU foreign policy chief Federica Mogherini called on Kosovo to revoke the decision, saying it "is a clear violation of the Central European Free Trade Agreement and of the spirit of the Stabilization and Association Agreement between the European Union and Kosovo."

Zahir Tanin, head of the U.N. Mission in Kosovo, also expressed his "concern regarding the potential impact on the people of Kosovo as well as the political implications on the dialogue and normalization of relations between Belgrade and Pristina."

Kosovo and Serbia have been in European Union-mediated negotiations for seven years. The EU has told the two sides they must normalize relations as a precondition to entering the bloc. Vucic has said that Serbia won't take part in talks until Kosovo lifts its recently introduced taxes.

"It is 20 years since the war, 10 years from independence, and Serbia has not shown the good will to normalize ties," Haradinaj said.

Dusan Stojanovic contributed from Belgrade, Serbia, and Amer Cohadzic from Sarajevo, Bosnia-Herzegovina.</s>PRISTINA – Kosovo has imposed a 100 percent tax on products from Serbia and Bosnia-Herzegovina in a move the government said is aimed at defending the country’s “vital interest."

The Kosovar government announced the new tariffs on November 21, two weeks after it decided to slap a 10 percent tax on goods from the two neighboring states, drawing angry reactions from Belgrade and Sarajevo and calls from the European Union to revoke the measures.

Relations between Pristina and Belgrade have been tense since Kosovo declared independence from Serbia in 2008.

Although more than 110 countries recognize Kosovo, Serbia – and Bosnia -- do not. Both Kosovo and Serbia have been told they must resolve their differences in order to make progress toward EU membership.

However, EU-sponsored normalization talks between the two countries' leaders have been stop-and-go in recent months.

“Serbia is continuing its aggressive campaign against Kosovo in the int’l stage. It is also undermining the normalisation process. To defend our vital interest, Government of Kosovo has decided today to increase the customs tariff to 100%,” Kosovo Deputy Prime Minister Enver Hoxhaj tweeted on November 21.

“Further measures to be announced soon!” he added, without elaborating.

Endrit Shala, Kosovo’s minister of trade and industry, said the new tariffs will “empower local producers” and strengthen the national economy

On November 6, Pristina imposed tariffs of 10 percent on products from Serbia and Bosnia in a move it said was in retaliation for the two countries' lack of recognition toward the young republic.

At the time, Hoxhaj cited Serbia's “savage campaign" against the international recognition of Kosovo and “threats from Serbia against innocent citizens of Kosovo just because their sons and daughters have joined the Kosovo Security Force [KSF].”

In October, Kosovo's lawmakers gave preliminary approval to legislation expanding the size and competencies of the lightly armed KSF in a session that was boycotted by ethnic Serb representatives, who complained it would lead to the creation of a Kosovar army in violation of UN resolutions.

Serbian, Bosnian, and EU officials have criticized the new taxes, saying they undermined regional cooperation and violated the country's obligations under the Central European Free Trade Agreement (CEFTA).

The regional grouping, which comprises Albania, Bosnia, Serbia, Kosovo, Macedonia, Montenegro, and Moldova, aims at stimulating its members’ economic development and EU path.

Official data showed that Kosovo imported some 400 million euros in products a year from Serbia and about 81 million euros in goods from Bosnia.</s>Tensions soar between Kosovo and Serbia over trade tax

BELGRADE, Serbia (AP) — Serbia's president has criticized the European Union and the West for allegedly failing to prevent Kosovo from triggering a trade war as tensions soar between the wartime foes.

Aleksandar Vucic's claims on Thursday came a day after Kosovo's government slapped a 100-percent import tax on all goods imported from Serbia and Bosnia.

Vucic says the West has always blamed "both sides" for tensions in Kosovo, "while in fact they support only one, and that is not Serbia."

After a bloody war in 1999, Kosovo declared independence from Serbia in 2008, something that Serbia and its ally Russia do not recognize while the U.S. and most Western countries do.

The EU has told the two sides they must normalize relations as a precondition to entering the bloc.</s>BELGRADE, Serbia (AP) - Serbia's president has criticized the European Union and the West for allegedly failing to prevent Kosovo from triggering a trade war as tensions soar between the wartime foes.

Aleksandar Vucic's claims on Thursday came a day after Kosovo's government slapped a 100-percent import tax on all goods imported from Serbia and Bosnia.

Vucic says the West has always blamed "both sides" for tensions in Kosovo, "while in fact they support only one, and that is not Serbia."

After a bloody war in 1999, Kosovo declared independence from Serbia in 2008, something that Serbia and its ally Russia do not recognize while the U.S. and most Western countries do.

The EU has told the two sides they must normalize relations as a precondition to entering the bloc.

In this photo taken Tuesday, Nov. 20, 2018, Serbian President Aleksandar Vucic arrives at a press conference in Belgrade, Serbia. Serbia's president has blasted the European Union and the West for allegedly failing to prevent Kosovo from triggering a trade war as tensions soar between the wartime foes. Vucic's claims came Thursday, a day after Kosovo's government slapped a 100-percent import tax on all goods imported from Serbia and Bosnia. (AP Photo/Darko Vojinovic)

In this photo taken Tuesday, Nov. 20, 2018, Serbian President Aleksandar Vucic attends a press conference in Belgrade, Serbia. Serbia's president has blasted the European Union and the West for allegedly failing to prevent Kosovo from triggering a trade war as tensions soar between the wartime foes. Vucic's claims came Thursday, a day after Kosovo's government slapped a 100-percent import tax on all goods imported from Serbia and Bosnia. (AP Photo/Darko Vojinovic)
Kosovo puts a 100% trade tariff on all goods imported from Serbia and Bosnia and Herzegovina. The European Union says this is a "clear violation" of the Central European Free Trade Agreement.