Even Balkans watchers were surprised by the recent escalation of a trade dispute between Serbia and Kosovo.

The trade dispute has strengthened Serbia's hand in negotiations with Kosovo, says Kosovo expert Johanna Deimel of the Munich-based Southeastern Europe Society, and this could have the government in the Kosovar capital, Pristina, very worried.

Serbia, meanwhile, recently took an important step on its path to eventually joining the European Union with the delivery of two alleged war criminals - Ratko Mladic and Goran Hadzic - to the International Criminal Tribunal for the former Yugoslavia in the Hague.

'Extremists' were blamed for the border attack

Deimel believes the episode, which led to Kosovo seizing Serbian-controlled border points, was an attempt by Kosovar Prime Minister Hashim Thaci to strengthen his own political position, both within Kosovo and abroad.

"The criticism of the Pristina-Belgrade dialog came mainly from the Kosovar side. 'What have we got in return? It is only the Serbs who won here. We have gained nothing because our EU status and our recognition within the EU are still not settled,' they have been asking," says Deimel.

"And now Thaci is probably thinking he should show strength, perhaps to show the very strong nationalistic forces in the Kosovar parliament."

Dusan Reljic, a researcher from the German Institute for International and Security Affairs, says the dispute could be an attempt by Thaci to present Belgrade, as well as his international partners in Washington and Brussels, with a fait accompli by giving his government an excuse to seize control of two key northern border checkpoints from Serbian troops.

"Thaci's goal is ultimately to assert Pristina's claim over the majority of Serbs living in northern Kosovo," Reljic says. "Just as Belgrade's goal is to maintain the current factional division of Kosovo in the long-term, and to use this division as the basis of a future balance between Pristina and Belgrade."

Accession on the line

Thaci wants to maintain control of northern Kosovo

The status quo benefits few, but is particularly detrimental for Belgrade. The escalation with Pristina has weakened Serbia's hand in negotiations with Brussels over its EU candidacy. Over the last few days, voices coming from several European capitals have reiterated that a normalization of relations between Pristina and Belgrade is a precondition to Serbia's EU accession moving to firmer ground.

Gernot Erler, deputy foreign policy chairman for Germany's Social Democrats' parliamentary group, believes Belgrade will be the likely loser of the recent trade dispute.

"We just saw the arrest of alleged war criminal Goran Hadzic, but the whole thing has been overshadowed by the recent hostilities in northern Kosovo. This means world attention has returned to the Kosovo problem, and this cannot be in Serbia's interests given the country's EU ambitions," Erler said. "In Pristina, there are currently no such clear objectives."

Most Balkans experts agree that the current tensions have not been forced by external players: neither the United States, which still plays an important role in Kosovo, nor the EU have any interest in an escalation or destabilization in Kosovo, says Johanna Deimel. This is why Pristina's decision to install an import ban on Serbian goods and then have the police enforce it was strongly criticized, she says.

"Both the American ambassador in Kosovo and the EU have clearly shown that they were shocked that the Kosovo government took this unilateral step without consulting the international community," says Deimel.

Kosovo is majority ethnic Albanian

Restart necessary

Peacekeepers from NATO's Kosovo Force (KFOR) have since taken control of the disputed border crossings, somewhat calming the situation. But tensions remain. Deimel says EU-brokered negotiations between Serbia and Kosovo have been temporarily interrupted, but that their continuation is inevitable.

"It will be difficult, very tricky [to get talks restarted]. New fronts have been opened, new borders drawn. The new beginning will be difficult," she says.

"However, pressure on the Serb and Kosovar leaders to de-escalate will be substantial. Under the current circumstances, neither of the countries' prospects of EU integration looks good."

Author: Zoran Arbutina / dfm

Editor: David Levitz