EU Grants Ukrainian Food Tariff-Free Access Extension Amidst Russian Invasion

EU Grants Ukrainian Food Tariff-Free Access Extension Amidst Russian Invasion

The European Union (EU) has taken a significant step in supporting Ukraine amidst the ongoing Russian invasion by granting Ukrainian food producers tariff-free access to EU markets for another year. The legislation, proposed by the European Commission, will extend the temporary suspension of import duties and quotas on Ukrainian agricultural imports until June 2025. This move aims to mitigate the negative economic consequences of the invasion, including the destruction of Ukrainian production capacity and the Russian blockade of Black Sea transportation routes.

The EU’s decision comes after the International Trade Committee of the European Parliament approved the extension of trade liberalization, rejecting amendments that could have increased restrictions. The bill also includes provisions that specify the re-imposition of tariffs on sensitive agricultural products such as poultry, eggs, and sugar if their imports exceed the average volumes of 2022 and 2023.

However, the legislation also empowers the European Commission to impose any necessary measures should Ukrainian imports cause significant disruptions to the EU market or the markets of EU member countries. The commission estimates that imports from Ukraine exceeding the annual duty-free quota in 2021 would cost the EU a loss of 33.4 million euros ($36.6 million) of customs revenue annually.

The approval of the bill by the committee is a crucial step, but it still needs to be passed by the parliament and approved by the Council of the EU before entering into force. The EU parliament is expected to vote on it next week.

While this decision is seen as a positive development for Ukraine, it has raised some concerns among farmers within the EU. Polish farmers and truckers have been protesting near the Ukrainian border since February, claiming unfair competition from cheaper Ukrainian imports. They argue that they are facing price pressures, taxes, and green regulations that Ukrainian producers do not have to comply with.

The EU Farmers’ interest group COPA-COGECA expressed disappointment in the lawmakers’ decision, stating that EU farmers and food producers have been failed by dismissing improvements to Ukraine’s trade liberalization law. They are particularly concerned about the impact on cereal, sugar, poultry, eggs, and honey producers, who feel they are being burdened by this policy without their concerns being adequately addressed.

The group has called on the EU parliament to include final amendments in the legislation during the next plenary session, emphasizing the need for support and understanding from the EU that goes beyond mere words.

In response to the EU’s decision, Ukraine’s Deputy Minister of Economy, Taras Kachka, expressed conditional acceptance of the restrictions on Ukrainian agri-food exports. He highlighted the need for a managed approach to trade flows between Ukraine and the EU during this transition period. Additionally, he called on the EU to impose a ban on Russian grain imports, emphasizing that it is Russia, not Ukraine, that poses a problem for Polish farmers.

Polish Prime Minister Donald Tusk has also shown support for imposing full sanctions on agricultural and food products from Russia and Belarus. Latvia has already introduced a ban on agricultural and feed products from Russia and Belarus, effective from March 8.

The situation remains complex, with various interests and concerns at play. The EU’s decision to grant Ukrainian food producers tariff-free access reflects its commitment to supporting Ukraine amidst the ongoing Russian invasion. However, it is essential to address the concerns raised by EU farmers and ensure a fair and balanced approach that benefits all stakeholders involved.