The EU is set to reduce the size of Ukrainian tariff-free trade and impose additional safeguards in response to members’ concerns, after an important committee vote yesterday (9 April).
In 2022 the EU temporarily suspended tariffs and quotas on Ukrainian products entering its territory, and has since granted one-year extensions to the agreement annually.
However, following pushback from European members, the EU Parliament and Council reached a provisional agreement on extending temporary trade measures for Ukraine, one considering criticism from members over the arrangement’s impact on domestic industries.
Deal approval
MEPs approved the deal, which was described by some as ‘hard-won’, passing with a 26-8 vote late on Tuesday (9 April). Wider approval from the EU parliament is still required and a full vote is expected in April.
The reworked agreement would cut Ukraine’s tariff-free benefit by €330m, down to €1.8bn.
There is also a reported ‘emergency break’ for agricultural products, such as poultry, sugar and maize, that are considered particularly sensitive. If this break is applied, tariffs will be re-introduced on those products.
Negotiators reportedly agreed to extend the reference period used to trigger this automatic safeguard, meaning that if imports of these products surpass average import volumes recorded in the second half of 2021, and all of 2022 and 2023, tariffs would be re-imposed.
In addition, the Commission said it would “step up” its monitoring of grain, particularly wheat.
War’s effects on farmers
Rapporteur Sandra Kalniete, a member of the centre-right Unity party in Latvia, said: "The ripple effects of Russia's relentless targeting of Ukraine and its economy are being felt by EU farmers.
“Under this new agreement with the Council, we have fortified safeguards to protect EU farmers in case of market turbulence sparked by Ukrainian imports.”
Kalniete, also a member of the right-wing European People’s Party and former EU farming commissioner, said that the agreement was a “testament to the EU's continued solidarity and unwavering support” for Ukraine in its struggle against Russia.
EU manoeuvring
If approved, the suspension of import duties and quotas will last until 5 June 2025.
Several European nations had raised concerns about the trade, including Poland, France and Belgium, citing the impact on their own domestic markets.
The European Commission said in January that it would be offering additional safeguards to members, after Poland and Hungary had unilaterally banned Ukrainian imports.
UK efforts
The UK has already extended tariff free trade with Ukraine until 2029, with most goods covered by an agreement signed in February between UK trade minister Greg Hands and Ukraine’s deputy prime minister Yuliia Svyrydenko.
London initially made the offer in 2022 on a nonreciprocal basis. However, according to the Department for Business and Trade (DBT), Kyiv “insisted” that it also remove tariffs on UK goods entering Ukraine.