Ukraine will lose about 1 billion euros due to EU quotas – Kozachenko
23 December 14:33
EXCLUSIVE
Trade quotas with the European Union will cost Ukraine about 1 billion euros this year. Leonid Kozachenko, president of the Ukrainian Agrarian Confederation, told Komersant ukrainskyi
in an exclusive commentary.
Losses of 1 billion euros
“Compared to 2021, the lifting of restrictions at the beginning of the war gave us the opportunity to receive an additional 2 billion euros in foreign exchange earnings. Now, due to the new quota, we will lose half of it,”
– the expert noted.
He reminded that immediately after the full-scale Russian invasion, the EU opened its borders to Ukrainian goods.
“When the war broke out and Putin blocked sea logistics routes for us, through which 90% of our exports went, Europe said: we are lifting all restrictions, bring to us and transit to other countries, including selling to us,”
– Kozachenko recalls.
However, the situation changed due to protests by European farmers. The most active were Polish farmers, who were later joined by farmers from Romania, Bulgaria, Hungary, and France. The protests were accompanied by border blockades and destruction of Ukrainian products.
“We saw horrific images of cars and trains being stopped in Poland, grain being thrown on the ground. This grain was not supposed to be sold in Poland, but was heading to Gdansk, where it was to be reloaded through the terminal and shipped to Africa by sea,”
– emphasizes the UAC President.
It was after these protests that the European Union introduced strict quotas on Ukrainian goods, still calling this regime the “Deep and Comprehensive Free Trade Area.”
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What “free trade” with the EU looks like
Today, a number of “safeguards” have been introduced into the EU-Ukraine free trade agreement to protect European producers.
In particular, the European Commission may take any measures it deems necessary if imports from Ukraine cause “significant disturbances” on the EU market or the markets of one or more EU Member States. In such a case, the European Commission may launch an “emergency brake” for particularly sensitive agricultural products. This list includes the following products:
- poultry
- eggs
- sugar
- oats
- cereals
- corn;
- honey.
However, the European Commission has not only options but also responsibilities. If imports of these goods exceed the average import volumes recorded in the second half of 2021 and for the entirety of 2022 and 2023, customs tariffs must be restored within 14 days.
Thus, the EU has effectively reintroduced import quotas for many Ukrainian goods, albeit at a rather high level.
Eggs and sugar are under attack, but there is a positive side
Today, according to Leonid Kozachenko, eggs and sugar remain the most problematic export items. The reduction of the sugar quota to 262 thousand tons was particularly noticeable, while Ukraine used to export more than half a million tons of this product.
The expert also noted France’s position on Ukrainian sugar.
“The French are the biggest opponents of Ukrainian sugar. Not openly, but behind the scenes, they said that the bulk of sugar is obtained from Brazil, because Brazil has increased sugar production mainly due to French investments that need to be returned,”
– he says.
Nevertheless, there are positive aspects of the new quota mechanism. In particular, more favorable conditions have been set for corn – the quota has been increased to 11 million tons, which is 4 times higher than the previous supply volumes, emphasizes Leonid Kozachenko.
