Economy

Ukraine has a few weeks to finalize the import of agricultural products to the EU

Ukraine has a few more weeks to develop a joint decision with the European Commission on trade policy and Ukrainian agricultural exports to the EU after June 5, when the autonomous trade measures (ATMs) expire. This was announced by Taras Kachka, Deputy Minister of Economy and Trade Representative of Ukraine, Komersant ukrainskyi reports citing Interfax-Ukraine.

“The legal framework allows us to do this as quickly as possible. We still have a few weeks to talk calmly. Then, I think, we will have a common understanding of when exactly the decision will be made and in what parameters,”

– the official said.

Kachka reminded that before the introduction of the ATZ in 2022, Ukraine had already exported many goods to the EU under the free trade regime, and a significant part of these goods was not threatened with restrictions. As an example, he cited the export of Ukrainian cheese, which depends on compliance with veterinary requirements.

“The Ukrainian government is currently discussing with the European Commission what the trade regime will be like after June 5 for the 40 products subject to tariff quotas. It should also be understood that we did not export at least 25 of these products more than the tariff quotas were before 2022. There are many products that we do not say are sensitive, but which were exported in larger volumes than the tariff quotas were. We hope that the European Union will not treat them as sensitive goods that we can safely liberalize,”

– he said.

According to the European Commission, sensitive goods include honey, corn, bran, cereals, sugar, eggs, and poultry. According to Mr. Kachka, the Ukrainian government has already developed a decision on each of these products and formed a position that is now being discussed with the EU.

The trade representative characterized the EC’s warnings as constructive and useful for building the integration of Ukrainian goods into the European market.

“The problem is not numbers, the problem is politics. Where and how Ukraine is politicized with farmers or politicians who play on farmers’ feelings. We don’t have any excessive productivity in any of the commodities we are accused of producing. If we talk about corn, the European Union produces more corn than Ukraine. And wheat is even more so,”

– said the Ukrainian trade representative and added that 27 EU member states produced 135 million tons of wheat in the 2024 season, which consolidates the EU’s status as a leader in the production of this grain crop.

Kachka compared the Ukrainian negotiating team to a fisherman waiting for the right moment to start negotiations, when the situation with sensitive goods is not overly politicized.

“Everybody understands that this solution should be found by June 6, but give or take in such a way that we do not get stuck in the terms of trade of 2014. … In fact, the parameters of trade in sensitive goods will be determined between the quantitative thresholds defined in the ATM regulation and the maximum we supplied to the European Union in 2023,”

– he explained.

According to the trade representative’s forecast, there will probably be no significant restrictions for Ukrainian corn, as the EU’s needs exceed the 15 million tons per year limit set for Ukraine. The issue of wheat remains open due to different demand in the EU.

“Obviously, the most heated discussion will be on sugar, where we have jumped in production, but this does not mean that we have destroyed the EU market. We actually helped the European Union to go through some deficit periods, so the parameters of trade will change,”

– said the Ukrainian trade representative.

According to Kachka, an important issue is also the import of Ukrainian poultry meat to the EU, which, according to the European Commission, should be supplied not by large agricultural holdings, but mainly by small and medium-sized producers.

The trade representative expressed hope that the issue of sensitive goods for import to the EU will be agreed upon in the coming weeks.

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The preferential trade regime and its enemies

The decision to allow free imports of Ukrainian goods into the EU was made by the EU at the beginning of the full-scale Russian invasion as a gesture of support for the Ukrainian economy and in response to the Russian naval blockade of Ukrainian ports. During the two years of its operation, the simplified regime has gained a lot of opponents in the European Union. In particular, the governments of Bulgaria, Poland, Hungary, Romania, and Slovakia demanded to restrict imports of Ukrainian products (later France joined this position). They claim that cheap agricultural products from Ukraine are swallowing up their markets.

Six large farmers’ associations also protested against Ukrainian products six major European farmers’ associations have also protested against Ukrainian products. Polish farmers have even organized a border blockade, not only with Ukraine but also with Germany.

Nevertheless, after fierce debate, the simplified trade regime with Ukraine was extended until June 5, 2025. However, at the request of these countries, it was severely restricted.

Thus, the provisions on duty-free trade were amended to include new “safeguards” to protect European producers.

In particular, the European Commission may apply 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 practically returned import quotas for many Ukrainian goods, albeit at a rather high level.