Business

Free movement of goods: Ukraine and the EU prepare to harmonize sensitive issues

The Ministry of Agrarian Policy and Food took part in the negotiations between Ukraine and the European Commission on the Free Movement of Goods as part of the official screening of the compliance of Ukrainian legislation with EU law. This was reported by the Ministry of Agrarian Policy, Komersant ukrainskyi reports.

It is noted that all such meetings are held within the framework of the Agreement on Ukraine’s accession to the EU.

Harmonization of trade relations with the EU is a key area

This particular issue in relations with the EU is important given that the current trade rules will remain in place only until June 5.

“We expect to extend autonomous trade preferences after June 6, 2025. At the same time, we are working very actively with our partners to liberalize trade in accordance with the Association Agreement. The good news is that the list of goods that are sensitive to the European Union is short – just a few items. And we hope that we will find a solution for these goods,” Taras Kachka, Deputy Minister of Economy and Trade Representative of Ukraine, outlined the state of negotiations with the EU during the recent Committee hearings on “Strategic Guidelines for Deepening Trade and Economic Relations between Ukraine and the European Union in the context of Ukraine’s official status as a candidate for EU membership.”

According to him, Ukraine has a few weeks to work with the European Commission to develop a joint decision on trade policy and imports of Ukrainian agricultural products to the EU after the end of autonomous trade measures. In particular, it concerns the trade regime for 40 products subject to tariff quotas.

The official said that the European Commission’s definition of sensitive goods includes honey, corn, bran, cereals, sugar, eggs, and poultry. According to Taras Kachka, the Ukrainian government has already developed a solution for each of these products and formed a position that is now being discussed with the EU.

In his opinion, the problem is not in the numbers, the problem is politics: where and how the situation with farmers or politicians who play on farmers’ feelings is politicized.

Politicians are already reminding the European Commission about tariff quotas

The agriculture ministers of Hungary, Bulgaria, Romania, and Slovakia have recently called on the official Brussels to take measures that would limit the supply of Ukrainian agricultural products.

Hungarian Agriculture Minister István Nagy said that the agriculture ministers of Bulgaria, Romania, Slovakia and Hungary in a joint letter called on the European Commission to restore pre-war quotas, introduce measures to protect agricultural products and introduce automatic protection and individual quotas for EU border states.

The European Commission has no decision yet

European officials are conducting technical negotiations with Ukraine and reportedly are not talking about a literal return to pre-war trade rules at the moment. The possibility of agreements within the framework of the Deep and Comprehensive Free Trade Area, which would mean mutual trade liberalization, is being discussed.

Earlier, European Commissioner for Agriculture Christof Hansen announced the possibility of concluding an agreement within the framework of the Deep and Comprehensive Free Trade Area, which is part of the EU-Ukraine Association Agreement of 2016.

According to him, most agriculture ministers are in favor of a more stable agreement rather than extending the previous interim arrangement.

Ukrainian agribusiness is ready to compete for the European market

The We Build Ukraine think tank, together with the Ukrainian Agribusiness Club (UCAB), recently organized a conference titled “Agricultural Sector 2025: Challenges and Opportunities in the New Realities.” It was the venue for an exchange of views on cooperation with the EU.

Commenting on the strategy of advocacy by Ukrainian farmers for favorable conditions for agricultural trade with the EU, Nazar Bobytskyi, Head of UCAB’s European Office, noted that special emphasis will be placed on interaction with those European business associations that represent consumers of Ukrainian agricultural imports. According to him, these include industrial consumers of sugar among such European multinationals as Unilever, Nestlé, etc., as well as German sweets producers and the meat processing industry.

“The purpose of this interaction is to strengthen the voice and messages of European business in Brussels about the importance of maintaining open trade with Ukraine. This will help to guarantee uninterrupted and affordable food prices in Europe, as well as increase the competitiveness of European agricultural exports in the world,” Nazar Bobytskyi emphasized.

Yana Kavushevska, Head of the National Association of Sugar Producers of Ukraine, Ukrtsukor, noted that in 2023 the EU’s share in Ukraine’s sugar exports was about 98%, and in 2024 it was only 40%. However, according to her, this does not mean that there is no need to “fight” for the European market.

“We definitely need to, and logistics is just one of the reasons. At the same time, the EU market is close to us both logistically and politically and economically. And Ukraine’s sugar industry is a natural extension of the European sugar beet belt. Ukraine uses European sugar beet seeds, plant protection products, European sugar beet harvesting machinery, European equipment at sugar factories and in this sense is already part of the European sugar industry,” said Yana Kavushevska.

Kateryna Spivakova, Director of Government Relations at KERNEL, agrees with this. She reminded that access to the EU market is extremely important for Ukraine due to high margins and limited access to the global market.

According to Oleksandr Gaidu, Chairman of the Parliamentary Committee on Agrarian and Land Policy, there are several options for extending the EU agreement. In particular, to leave the quotas at the level of 2021, but this will mean costs for Ukrainian exporters, or, as the MP noted, it may be an extension of the resolution for a certain period – when all trade measures regarding the Association Agreement with the EU will be discussed.