On Oct. 10, 2019 in Novi Sad, Serbia a declaration of intent was signed to establish the free movement of people, goods, services and capital between Albania, North Macedonia and Serbia. The parties announced their new concept of a "mini-Schengen," which, of course, resembles numerous other cooperation attempts, but the important thing is that the countries came to the decision to cooperate on their own.

The leaders of the three countries affirmed that the initiative is open to Western Balkan countries who wish to participate, inviting Bosnia-Herzegovina, Montenegro and Kosovo to join as soon as possible.

The remaining countries are still mulling over the invitation despite Kosovo agreeing to join the initiative on Sept. 4, 2020, when it signed agreements with Serbia in Washington under the auspices of incumbent U.S. President Donald Trump.

Later, a mini-Schengen meeting was held on Nov. 9, which Kosovo did not attend despite its promises to the Trump administration, due to both internal and external issues.

Kosovo President Hashim Thaci resigned from his post to face war crimes charges in The Hague as Trump lost the U.S. presidential election. Beyond these developments, there are three main reasons why Kosovo still has yet to participate in the initiative – the reasons being political, psychological and economic.

The political reason

Firstly, Kosovo believed the initiative was trying to create a mini-Yugoslavia from the way that it was put forward when proposed by Serbian President Aleksandar Vucic, a concept welcomed by Europe.

Embroiled in its own internal crises, the EU welcomes initiatives that ease its burden in the region. The name of the project was changed due to the reaction to the word Yugoslavia, which still reminds many of bloodshed and war.

The Berlin Process, a diplomatic initiative to boost regional cooperation among Western Balkan countries and their European counterparts, suggested the term "Berlin Schengen," inspiring the initiative's current form. Shortly after it became apparent that the project needed more participation from the Balkan region to accelerate its growth and sphere of cooperation.

Although the project is backed by the Berlin Process, Kosovo has expressed hesitance to join as it conflicts with their desire to join the EU and NATO. Kosovo's vision is to not participate in regional activities beyond the EU.

Kosovo rightfully argues that joining any regional initiative under the auspices of Serbia, who does not recognize Kosovo, would harm Kosovo's political interests.

Serbia must first recognize Kosovo in order for regional cooperation to be achieved in a fair and stable environment.

The initiative does not have adequate mechanisms to address the status of Kosovo and the two nations' dispute should be settled through a legally binding agreement that regulates their relations before other initiatives can be joined.

The economic factor

For economic reasons, the plan would allow citizens of member states to freely travel between countries, only requiring an ID card, no passport, in an attempt to strengthen local economies.

Joint work permits will be issued, member countries will mutually recognize professional qualifications and diplomas and the customs control processes at borders will be sped up in the near future.

The initiative seemingly makes life easier for citizens of the three countries but Kosovo is unsure whether it would see the same benefits.

Kosovo has the lowest exports in the Balkans. Its export-oriented, labor-intensive manufacturing industries are underdeveloped compared to its neighbors – putting Kosovo at a disadvantage. The country lacks a strong industrial base and sees a lot of immigration abroad.

Additionally, Serbia blocks Kosovo with a number of non-tariff barriers despite the two countries both being members of the Central European Free Trade Agreement (CEFTA), a free trade agreement where mostly Serbia benefits.

According to Kosovo's Ministry of Trade and Industry, more than half of its identified customs-related problems and technical barriers to trade stem from Serbia which has become a factor hindering trade.

Kosovar companies face problems in Serbia across a range of sectors. Businesses dealing with machines and equipment as well as those in the information and communications technology sector report that have reported barriers to trade.

Serbia has been applying non-tariff barriers to Kosovo products, barring the transit of goods crossing into Serbia and frequently changing the documents required at the border.

Considering their history, Kosovo does not want to be a vehicle to further Serbia's economic growth through a common market since Serbia is already the biggest exporter among CEFTA countries, an initiative it is already a part of.

According to journalist Olsi Jazexhi speaking on the BalkanPod podcast, Kosovo could become a strategic transit route for Serbian goods to reach the Adriatic Sea under the mini-Schengen scheme.

Kosovo fears Serbia could use the initiative as a backdoor to create a "Greater Serbia" and become a regional superpower, dominating its economies and influencing politics.

This is why Kosovo needs legal assurance before it joins the initiative in order to solve the issues – especially when it comes to documentation requirements, red tape and slow customs clearances.

A forgotten impact

Lastly, there are psychological reasons which are often overlooked in international relations but are a vital factor if the two countries are to be integrated and cooperate.

A member of the Democratic League of Kosovo (LDK), Arben Gashi attended the Belgrade Security Forum in 2017 and said that it was the first time he came to Belgrade.

If a politician has only just visited the country for the first time in 2017 when the Belgrade – Pristina dialogue began in 2011, what is the average citizen to do?

On paper, the mini–Schengen scheme seems like an impetus for small- and medium-sized enterprises (SMEs) from Kosovo to be able to move freely to Serbia, but they are unsure of the working environment that awaits them.

The same applies to students. Many Albanians are still hesitant to move to Serbia since unfortunately, it is not always easy to remove mental barriers.

The situation in Kosovo is a reflection of the long-running debate on absolute gain and relative gain in international relations. As mentioned above, Kosovo is not yet sure what it would get from this initiative.

At this point in time, where European skepticism and enlargement fatigue collide, it provides some optimism that some local leaders would engineer such a cooperative project.

Despite the lack of promises of EU enlargement to the Western Balkans, three countries have taken an important step to create intra-regional integration. This step will further regional cooperation and the Europeanization process which will focus on integration first.

Kosovo has justified reasons for being cautious, but it is a fact that in recent years the Balkans have not been a priority for the EU.

The region must prioritize itself. If the legal framework between the countries is well drawn out and they do not experience the same issues at in the CEFTA, the mini-Schengen project could provide new opportunities for manufacturing companies from Kosovo, such as the barrier-free expansion of their products and services beyond Kosovo to other countries.

The deal could benefit local producers in Kosovo in the long run. Economic integration should be a priority for political integration, and in this regard, the elimination of barriers in the Western Balkans is a top priority. However, first of all, all states should have equal status.

*Analyst on Balkans