276 FOREIGN TRADE ZONES

these two zones and their functions may be clearly understood the
steps which have led up to their establishment and the present attitude
 of the Greek and Yugoslav Governments on the subject are
described in the following paragraphs. Apart from purely economic
motives, political considerations between Greece and Yugoslavia have
had much to do with the establishment and the subsequent delay in
the operation of the Yugoslav free zone, and the establishment of the
Greek free zone.
The Yugoslav free zone was originally the subject of a convention
between Greece and Serbia signed on May 19, 1914. On account of
the outbreak of the European War nothing was done toward its
establishment until the latter part of 1922. The zone area was formally
 ceded to Yugoslavia on March 6, 1925.
The Greek free zone, which surrounds the Yugoslav zone, was
inaugurated on October 18, 1925.
YUGOSLAV FREE ZONE
DRIGIN OF, AND NEGOTIATIONS LEADING UP TO ITS ORGANIZATION
Before the World War Saloniki was the natural maritime port for
Serbia which at that time had no outlet on the Adriatic Sea. In the
spring of 1914 an agreement was signed between Greece and Serbia
assigning a free zone to Serbian commerce at Saloniki, but owing to
the outbreak of the war it was not ratified. In spite of the expansion
of Serbia into the State of Yugoslavia with a seaboard on the Adriatic,
 the need for an outlet on the Aegean remained, and the question
of a free zone at Saloniki was reopened in November, 1922. The
same month Greece ratified the 1914 agreement but Yugoslavia
refused to do so on the grounds that its terms were not adequate to
her requirements. Negotiations on the subject were resumed and
on May 10, 1923, a new agreement was signed in Belgrade. By the
terms of this agreement Greece ceded to Yugoslavia for a period of 50
years an ares in the port of Saloniki to be placed under the Yugoslav
customs administration. The zone was to remain an integral part of
Greek territory and under Greek sovereignty, but was to be administered
 by Yugoslav customs authorities. State and municipal
land in the area was to be ceded without charge, but land under
private ownership was to be expropriated by the Greek Government
and paid for by Yugoslavia. Officials in the zone were to be Yugoslavs,
 and the chief executive authority was to be vested in a Yugoslav
official under the control of the Greek captain of the port of Saloniki.
Goods in transit between the zone and Yugoslavia, and goods imported
for use or consumption in the zone were to be free from all Greek
State or municipal taxation. Yugoslavia was to enjoy most-favorednation
 treatment in the port of Saloniki as well as any advantages
arising from the establishment of a Greek free zone. The contracting