EU intends to raise tariffs on imports from Ukraine - FT
Photo: EU to raise tariffs on agricultural imports from Ukraine (kovel media)
The EU is preparing to impose much higher tariffs on Ukrainian imports within weeks. This will hit Kyiv's economy at a crucial time in its fight against Russian aggression, Financial Times reports.
According to the agency's sources, the decision to abruptly terminate special trade agreements that allowed most Ukrainian goods to enter the EU duty-free was made after Poland led a movement to protect the bloc's farmers.
The EU has an existing free trade agreement with Ukraine, and the EU went further after Russia's full-scale invasion of Ukraine and temporarily suspended the remaining customs tariffs.
These agreements expire on June 6, and the EU plans to replace them with transitional measures while the two sides update their joint trade agreement.
But diplomats said that this transitional proposal, which was recently sent to EU member states, would drastically reduce duty-free quotas on agricultural products - a lifeline for Ukrainian farmers and the budget.
Political tariffs
The tariff-free regime established in 2022 applied to cheap poultry, wheat, and sugar from Ukraine, most of which passed through EU countries on their way to Africa and Asia. But farmers and politicians in Poland, France, and elsewhere soon blamed Ukrainian exports for lowering domestic prices.
The issue dominated Polish politics as successive governments imposed unilateral bans on Ukrainian grain imports in violation of EU rules. Ahead of the May 18 presidential election, Warsaw asked the European Commission to postpone highly unpopular trade talks with Kyiv to minimize the chances of nationalist opposition candidate Karol Nawrocki, diplomats said.
New agreement
A European Commission spokesperson confirmed that the military arrangements will not be renewed because they are currently working on the revision of the EU-Ukraine free trade agreement.
The representative added that the Commission is also studying possible transitional measures in case the negotiations are not finalized and applied by June 6.
Bernd Lange, chairman of the European Parliament's trade committee, said this is a really bad signal for Ukraine, and it will take at least until October to find a solution.
His committee will question European Commission officials on Wednesday about why the promised trade talks have stalled, given that the June deadline was known for a long time, and the situation is unacceptable.
Blow to Ukraine's economy
The Ukrainian government estimates that a return to pre-war trade terms would cut its revenues by about €3.5 billion a year.
Mykhailo Bno-Airiian, trade representative of the Federation of Employers of Ukraine, said that it was a huge step backward and that what they were seeing at that moment was a lack of understanding.
Two EU diplomats told the FT that the European Commission's transitional measure involves dividing the annual tariff-free quota into 12 monthly quotas to reduce imports while negotiations continue.
The biggest impact will be on corn, sugar, honey, and poultry. The corn quota will be reduced from 4.7 million tons to 650,000 tons year-on-year. The poultry quota will drop from 57,000 tons to 40,000, and the sugar quota will drop from 109 thousand to 40.7 thousand.
The European Commission's plans to cancel preferential trade for Ukraine were announced at the beginning of the year. It was expected that trade measures to support Ukraine would be fewer and that imports to the EU would decrease.
On May 13, Polish farmers blocked the Dorohusk-Yahodyn border crossing on the border.
