Rivals Serbia and Kosovo have agreed to normalize economic ties following two days of U.S.-brokered talks in Washington.
U.S. President Trump announced what he described as a “truly historic agreement” at the Oval Office on September 4 before a meeting with the two Balkan leaders.
“After a violent and tragic history and years of failed negotiations, my administration proposed a new way of bridging the divide. By focusing on job creation and economic growth, the two countries were able to reach a major breakthrough," Trump said, standing alongside Serbian President Aleksandar Vucic and Kosovar Prime Minister Avdullah Hoti, who signed an economic cooperation agreement.
Trump said Serbia had also committed to moving its embassy to Jerusalem, and Kosovo and Israel had agreed to normalize ties and establish diplomatic relations.
The Trump administration recognized Jerusalem as Israel’s capital in late 2017 and moved the U.S. Embassy there in May 2018.
The administration has encouraged other countries to do the same but has been widely criticized by the Palestinians and many in Europe because the Israeli-Palestinian conflict remains unresolved. Kosovo, a predominantly Muslim country, has never before recognized Israel, nor has Israel recognized Kosovo.
Kosovo’s parliament declared independence from Serbia in 2008, nine years after NATO conducted a 78-day air campaign against Serbia to stop a bloody crackdown against ethnic Albanians in Kosovo.
Most Western nations have recognized Kosovo’s independence, but Serbia and its allies Russia and China have not. The ongoing deadlock and Serbia's unwillingness to recognize Kosovo have kept tensions simmering and prevented a full stabilization of the Balkan region after the bloody wars of the 1990s.
Vucic said that Serbia had struck a bilateral agreement with the United States, emphasizing that no recognition was given to "third party" Kosovo.
“We haven't resolved all our problems. There are still differences,” Vucic said, but he added that having a unified economic zone with Kosovo was a “huge step forward.”
Hoti also described the economic cooperation as a “huge step forward” in the relationship and said the two leaders were committed to working together.
Vucic also announced that an agreement had been reached to open in Belgrade an office of the U.S. Development Fund, which, he said, would send a strong signal to credit agencies and investors.
"The Americans will monitor important projects with us, such as the construction of the highway to Pristina. We agreed on how to build the railway and how to connect Pristina with central Serbia, via Merdare (a border crossing between Serbia and Kosovo)," Vucic said.
He added that projects have been agreed to be financed by various U.S. corporations and the U.S. Export Bank.
The agreement commits the two sides to a raft of economic measures, including cutting trade tariffs and sharing energy and water resources.
Serbia and Kosovo have already agreed air, rail, and transit agreements, including one that would clear the way for the first flight between Pristina and Belgrade in 21 years. The new agreement commits them to implement the transport deal.
"They have normalized their economic relations," said White House national security adviser Robert O'Brien. "The Serbia-Kosovo conflict has gone on for decades. They have been stuck, unable to move forward for many, many years."
On September 7, Vucic and Hoti are scheduled to go to Brussels to hold talks under the auspices of the EU’s foreign policy chief Josep Borrell and the special envoy for the Belgrade-Pristina dialogue, Miroslav Lajcak.
"We take note of the signing of the document between Belgrade and Pristina at the White House in Washington, D.C., today, " said Peter Stano, a spokesperson for Borrell, in a written statement.
"We are looking forward to welcoming the parties in Brussels this weekend and next week to continue our work on a comprehensive agreement to normalize relations between Kosovo and Serbia, dealing with all outstanding issues related to their relationship, and in line with international law and EU acquis," Stano said.
The EU has mediated the talks between Serbia and Kosovo for more than a decade, and the parallel U.S. effort, although focused on economic development, has not been fully embraced by some EU officials.
Richard Grenell, the U.S. special envoy for Serbia and Kosovo negotiations, said the United States has been in close contact with European allies about the economic cooperation agreement.
He said the agreement would open up economic opportunities for both U.S. and European companies.
The White House summit was originally scheduled for June, but it was canceled after Kosovar President Hashim Thaci, who was to lead the Kosovar delegation, was indicted for war crimes by an international court.
In Kosovo, Thaci hailed the deal and thanked Trump. In a statement posted on social media, he said Kosovo now should continue to seek membership in international organizations so it has improved status in the domestic and international arenas.