Increasing Interministerial Cooperation: How Can Serbia Proactively Shape Its Foreign Trade in Volatile Global Conditions

Recalibration of Global Trade: How Could Serbia’s Institutions Adapt to Volatile Trading Practices?

Since the moment President Trump took the Oval Office, it became imminent that the current global trade landscape would shift from the past. Global politics has again proven that it is transforming quickly. If the transformation of international trade relations accelerates rapidly, then government institutions must also adapt on short notice. New strategic values have penetrated the global economy, especially trade, and they intend to hold their positions for quite some time. The institutions accustomed to free trade policies should move quickly to internalize the implications of the “Mar-a-Lago accord” and preserve room to maneuver in the new trading system.

These new rules are profoundly described by Mr. Kaush Arha, and he argues that the world has left the era of naïve, cost-first globalization. Trade is not ending, but reorganizing into economic alliances among like-minded partners that share standards, institutions, and strategic aims. This “post-globalization” map privileges resilience and values over pure efficiency. Its core policy tool is trusted connectivity: connect markets and infrastructure only where the rule of law, transparency, and high standards exist, primarily among democracies. This long-term approach treats supply-chain links as strategic assets, but is also connected with the short-term goal of the current administration to minimize trade deficits (by tariffs).

The idea of trusted connectivity applies not only to international alliances but also to how states organize their own institutions. For Serbia, becoming a credible partner abroad first requires improving coordination at home, with clear mandates, transparency, and rapid decision-making.

Wind of Change in Global Trading Policies: Expectations for the Future

In its attempt to shift its foreign policy to the “America First” strategy, the US has decided to impose tariffs on a great number of states, and the threat to other countries is more than real. Key targets include China (up to 30%), the European Union (agreed upon 15%), particularly Germany and France, Canada (35% universal tariff), Mexico (25%), and traditional Asian allies, Japan and South Korea (both 15%l).

Serbia is no exception from these policies, as the country faces potential tariffs of up to 35% on all goods. Given the fact that all the mentioned countries considered this threat seriously, Serbia must also resolve this issue even more urgently, with its tariff rate being the highest.

Avoidable Damage: The Case of Serbia and Trump’s Tariffs

Serbia’s foreign trade governance is marked by excessive institutional fragmentation. Too many bodies are involved in shaping and executing trade policy, creating overlapping mandates and slowing down decision-making. A better model, as will be presented later in the text, is one in which the Ministry of Economy formulates foreign trade strategies in close coordination and consultation with the Ministry of Foreign Affairs. This ensures that economic priorities are aligned with diplomatic realities from the outset.

By contrast, in Serbia, the Ministry of Internal and Foreign Trade functions as an unnecessary intermediary, adding cost and complexity to the process while weakening Serbia’s ability to act swiftly and coherently in foreign trade matters. This fragmented structure may have also affected negotiations with the United States over tariffs, where no resolution was reached before the deadline expired.

Thus, Serbia should recalibrate its trade governance to practice continuous, sector-by-sector negotiations led by before mentioned global values, to protect domestic producers, while building preferential deals with “trusted” importers.

Who is Responsible For Foreign Trade in Serbia?: Institutional Framework

Serbia’s foreign trade is governed by several key institutions, each with distinct competencies defined by law. These institutions collectively manage trade policy, customs, investment, and financial regulation.

The Ministry of Foreign Affairs (MFA) represents Serbia abroad, but its role in foreign trade is indirect and tightly circumscribed. It cannot on its own negotiate or conclude trade agreements, nor make trade-related concessions; those powers sit with the Ministry of Internal and Foreign Trade, the Ministry of Finance, and the Government of Serbia under the Law on Foreign Affairs and the Law on the Conclusion and Execution of International Agreements. Practically, this leaves the MFA with limited maneuvering space, dependent on interministerial clearance to respond to trade and economic shocks. To sharpen Serbia’s response capacity, the framework should explicitly strengthen the MFA’s coordination mandate in economic diplomacy, assigning it clear lead-coordination authority and binding timelines, so it can drive faster, more coherent reactions to external trade and economic threats while safeguarding national interests.

A Comparative Analysis of Foreign Trade Regulation by Ministries of Foreign Affairs

In the next section, we will look at economically successful countries with a population size not significantly different from Serbia’s. These states don’t have a standalone ministry of trade; instead, they deal with foreign trade through other institutions, most often the Ministry of Economy. In each case, there is a high level of coordination between the ministries of economy and foreign affairs. Given the fact that some countries that are going to be mentioned are EU members (and the Commission has exclusive jurisdiction in foreign trade), their organisational setup in this area will be shown as it was before they acceded to the Union.

The Trap of Reactivity and Ad Hoc Policy of Serbia’s Foreign Trade

Serbia’s foreign trade governance has long suffered from a reactive and ad hoc approach, shaped more by short-term pressures than by strategic foresight. The fragmented institutional setup, where responsibilities are split between the Ministry of Internal and Foreign Trade, the Ministry of Finance, the Ministry of Economy, and numerous agencies, creates structural inertia that slows decision-making and blurs accountability. Unlike countries such as Ireland, the Czech Republic, and other countries mentioned before, where trade is firmly anchored in economic ministries but coordinated closely with foreign affairs to ensure coherence, Serbia relies on a patchwork model where overlapping mandates lead to competition rather than cooperation.

The recent episode with Trump’s global tariffs offers a telling illustration. While many states, ranging from the European Union to Canada, Mexico, and Asian allies, responded with structured negotiations or reciprocal measures, Serbia struggled to articulate a coherent stance. With tariffs as high as 35% on Serbian goods looming, institutional fragmentation contributed to delays in formulating a clear strategy, and interministerial consultations did not produce actionable results before the deadline. The absence of a unified voice complicated Serbia’s ability to shield its exporters from avoidable damage.

This reactive posture forces Serbia into firefighting mode, scrambling to respond to shocks like US tariffs or sudden EU regulatory changes, rather than shaping a proactive national trade strategy. Without institutional streamlining and stronger coordination mechanisms, particularly by granting the MFA a more explicit coordination mandate in economic diplomacy, Serbia risks remaining trapped in a cycle of improvisation, weakening its resilience in an era of the new global trade.

Policy Recommendations: Coordination as a Guiding Principle

Serbia cannot afford to treat foreign trade policy as an administrative afterthought, fragmented across multiple ministries. Instead, coordination must become the guiding principle of institutional reform to protect its own export companies and integrate itself into the new global order. The following steps outline how Serbia’s institutions could adapt to volatile trading practices:

1. Streamline Institutional Responsibilities: Serbia’s current architecture disperses competencies across several ministries and agencies, creating duplication and slowing responses. A first step is to consolidate foreign trade policymaking within the Ministry of Economy, while clarifying that the Ministry of Finance retains customs administration and tariff application. This mirrors models in countries such as Ireland and the Czech Republic, where economic ministries lead on trade policy and implementation.

   
   

2. Institutionalize Inter-Ministerial Coordination Mechanisms: Rather than ad hoc consultations, Serbia should establish a permanent inter-ministerial trade council, chaired jointly by the Ministry of Economy and the MFA, with participation from Finance, the National Bank of Serbia, and the Chamber of Commerce. Binding deadlines for policy proposals would reduce the current paralysis, while regular reporting to the National Parliament would strengthen democratic oversight.

   
   

3. Develop Crisis-Response Protocols for Trade Shocks: Episodes like Trump’s global tariffs reveal the costs of fragmentation and delay. Serbia should adopt standardized crisis-response protocols that define which ministry leads, how negotiation teams are formed, and within what timeframe decisions must be taken. This would move Serbia away from reactive “firefighting” and toward predictable, proactive trade diplomacy.

   
   

4. Leverage Comparative Experience: Serbia can draw on best practices from states of similar size:

   • Israel: Foreign Trade Administration embedded in embassies ensures continuous coordination with the MFA.

   • Ireland: Trade division in the economic ministry backed by strong EU coordination mechanisms.

   • Norway: MFA and economic ministry jointly conduct EFTA negotiations, balancing diplomacy and economics.

   • Estonia & Latvia: Foreign trade integrated into the economy and foreign ministries, reflecting a post-socialist choice for streamlined coordination and efficiency.

Institutional learning from these examples can guide Serbia in building a leaner, faster, and more coherent trade governance system.