Free trade is mostly respected in Macedonia. Same as in all small, open economies, free trade fosters production specialization and rise in productivity, thus enhancing economic development. Since 2003, Macedonia has been a member of the World Trade Organization (WTO), which liberalized foreign trade. Trade tariffs are not high, with the average applied tariff rate of 6.9%, with the exception of agriculture products, where tariffs could be significant. Regulatory trade barriers still remain, incurring cost on imported goods, due to the complicated product-standardization procedures. Customs` bureaucracy procedures hinder free movement of goods, especially in the border compliance section. There are also challenges posed by poor state of the transportation infrastructure, most notably by
the quality of roads and railways, which increases freight costs. Capital controls on short-term capital inflow in order to limit the impact on the national currency exchange rate are still maintained. Vast majority of the trade is facilitated through Stability and Accession Agreement (SAA) with the European Union, signed in 2001, and Central European Free Trade Area (CEFTA) agreement as of 2006. These two free trade agreements connect Macedonian economy to its main trade partners: Germany, Italy, Greece, Bulgaria, Serbia and Kosovo. During October 2015, Macedonia ratified the WTO Trade Facilitation Agreement (TFA) which is expected to further liberalize trade flows, and is an observer to the Government Procurement Agreement (GPA). There are some obstacles in issuance of work and residence permits for foreign nationals, since the process could be very slow.