Long-term agreement or the current trade regime: farmers speak out on the format of trade with the EU
4 April 09:42
The Ukrainian agrarian community does not object to the European Commission’s proposal to replace the annual extension of autonomous trade measures for Ukraine with bilateral trade agreements for further trade liberalization under the Association Agreement, provided that there is sufficient time to agree on the future trade format. This is stated in a joint statement by the Ukrainian Agribusiness Club and the All-Ukrainian Agrarian Forum, a public union created to coordinate specialized agrarian associations, reports
Among the main advantages of this new agreement are the long-term nature of the agreement, which guarantees stability for agribusiness, a bilateral format with mutual access to markets, and a flexible mechanism for gradual liberalization, taking into account sensitive product categories and safeguards.
At the same time, Ukrainian agrarians call for accelerating the negotiation process on the future trade agreement, as the current regime of autonomous trade measures is due to expire on June 5, 2025.
“In case a trade agreement based on Article 29 of the Association Agreement is not reached within the established timeframe, the European Commission should immediately initiate an extension of the current regime of autonomous trade measures for the period necessary to complete the negotiations. This will avoid a sharp deterioration in the conditions of access of Ukrainian goods to the EU market and will not create a shock to the country’s macro-financial stability,” the document says.
What are the risks of returning to duties and tariff quotas in 2022?
According to preliminary estimates by representatives of the Ukrainian agricultural community, the reintroduction of duties and quotas could cause very serious economic problems for Ukraine.
In particular, we are talking about a loss of foreign exchange earnings of up to €3.3 billion and a 2.52% decline in GDP in 2025, as well as a 7.74% drop in agricultural production and a 4.15% reduction in tax revenues to local and state budgets.
At the same time, the agricultural sector is the backbone of Ukraine’s economic stability, accounting for about 15% of GDP, 59.3% of foreign exchange earnings ($24.7 billion) and significant tax revenues.
And the European Union remains the main market for agrarians, accounting for 51.8% of agricultural exports.
A few days ago, European Commissioner for Agriculture Christof Hansen said that imports of agricultural products from Ukraine to the EU would be reduced after the trade agreement between Kyiv and Brussels expires on June 5, according to which Ukrainian goods were allowed to enter the European market duty-free.
There is no final decision, nor is there a common position in the EU on the format of trade relations with Ukraine. On the one hand, Poland, Hungary, Slovakia, and Bulgaria remain opposed to full liberalization for Ukraine’s agricultural sector, citing pressure from their domestic agricultural sectors. On the other hand, the European Commission understands that Ukraine needs support.
