EU and Ukraine Explore Legal Options to Avoid Return of Pre-War Food Tariffs
Negotiations ongoing to implement measures preventing reintroduction of tariffs on Ukrainian agricultural imports amidst a looming deadline.
EU officials and representatives from Ukraine convened in Brussels last week to discuss potential legal strategies aimed at avoiding the reimposition of pre-war tariffs on most agricultural imports from Ukraine.
This meeting occurs just weeks before the expiration of existing wartime trade benefits on June 5.
Since 2022, Ukrainian agricultural exports have benefitted from duty-free access to the European Union under Autonomous Trade Measures (ATMs).
However, sources indicate that extending the current trade regime would require negotiations with the European Parliament and Council, a prospect that is reportedly "not on the table." Olof Gill, the European Commission's spokesperson for trade, stated that "transitional measures" are being prepared to ensure readiness in case they are needed, emphasizing that this is a responsible approach for the EU executive.
The European Commission has expressed intentions to arrive at a permanent solution based on renegotiated tariff quotas detailed under Article 29 of the Deep and Comprehensive Free Trade Area (DCFTA) with Ukraine, which has been operational since 2017. However, formal proposals have yet to be published, and full-scale negotiations have not commenced, causing delays in reaching a resolution.
The agricultural sector in Ukraine, which represented 10% of the country's GDP in 2021, is voicing serious concerns regarding the situation.
Nazar Bobitski, director of the Ukrainian Agribusiness Club's Brussels office, highlighted that the four-week timeframe before the expiration of the ATMs is insufficient for the EU to enact any legal measure ensuring continuity for economic operators.
Bobitski pointed out that the possible return to pre-war tariff levels could cost Ukraine between €3 billion and €3.5 billion annually.
Furthermore, he stressed that EU food processors are affected by the uncertainty, particularly those dependent on Ukrainian sugar and grain for animal feed.
In 2022, agricultural exports comprised 59% of Ukraine's total export earnings, with half of these exports directed towards the EU market.
The situation is complicated by rising political tensions within the EU regarding Ukrainian imports.
As elections approach in several EU countries, Polish authorities are particularly cautious, given that Ukrainian imports have previously incited unrest among local farmers.
A recent campaign in Hungary against Ukrainian accession has specifically criticized agricultural product imports from Ukraine.
In Brussels, representatives from EU agricultural sectors including sugar, poultry, and maize, along with the farm organization Copa and Cogeca, are actively lobbying to reinstate the tariffs.
They argue that trade liberalization with Ukraine has adversely impacted key EU agricultural and manufacturing sectors.
Their recent press release advocated for the establishment of tariff-rate quotas akin to those in place prior to the war.
Despite the lobbying, the Commission has not disclosed specific plans regarding the future trade regime with Ukraine.
Gill confirmed that the Commission is in the final stages of preparing the proposal to facilitate a seamless transition to the new trade framework following the expiration of the ATMs. The Commission intends to present this proposal to Ukraine imminently.
This meeting occurs just weeks before the expiration of existing wartime trade benefits on June 5.
Since 2022, Ukrainian agricultural exports have benefitted from duty-free access to the European Union under Autonomous Trade Measures (ATMs).
However, sources indicate that extending the current trade regime would require negotiations with the European Parliament and Council, a prospect that is reportedly "not on the table." Olof Gill, the European Commission's spokesperson for trade, stated that "transitional measures" are being prepared to ensure readiness in case they are needed, emphasizing that this is a responsible approach for the EU executive.
The European Commission has expressed intentions to arrive at a permanent solution based on renegotiated tariff quotas detailed under Article 29 of the Deep and Comprehensive Free Trade Area (DCFTA) with Ukraine, which has been operational since 2017. However, formal proposals have yet to be published, and full-scale negotiations have not commenced, causing delays in reaching a resolution.
The agricultural sector in Ukraine, which represented 10% of the country's GDP in 2021, is voicing serious concerns regarding the situation.
Nazar Bobitski, director of the Ukrainian Agribusiness Club's Brussels office, highlighted that the four-week timeframe before the expiration of the ATMs is insufficient for the EU to enact any legal measure ensuring continuity for economic operators.
Bobitski pointed out that the possible return to pre-war tariff levels could cost Ukraine between €3 billion and €3.5 billion annually.
Furthermore, he stressed that EU food processors are affected by the uncertainty, particularly those dependent on Ukrainian sugar and grain for animal feed.
In 2022, agricultural exports comprised 59% of Ukraine's total export earnings, with half of these exports directed towards the EU market.
The situation is complicated by rising political tensions within the EU regarding Ukrainian imports.
As elections approach in several EU countries, Polish authorities are particularly cautious, given that Ukrainian imports have previously incited unrest among local farmers.
A recent campaign in Hungary against Ukrainian accession has specifically criticized agricultural product imports from Ukraine.
In Brussels, representatives from EU agricultural sectors including sugar, poultry, and maize, along with the farm organization Copa and Cogeca, are actively lobbying to reinstate the tariffs.
They argue that trade liberalization with Ukraine has adversely impacted key EU agricultural and manufacturing sectors.
Their recent press release advocated for the establishment of tariff-rate quotas akin to those in place prior to the war.
Despite the lobbying, the Commission has not disclosed specific plans regarding the future trade regime with Ukraine.
Gill confirmed that the Commission is in the final stages of preparing the proposal to facilitate a seamless transition to the new trade framework following the expiration of the ATMs. The Commission intends to present this proposal to Ukraine imminently.
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