EU Parliament and Council seal last-minute deal to extend Ukraine’s trade benefits

EU lawmakers reached an agreement on the renewal of trade liberalisation measures with Ukraine on Monday (8 April), after member states managed to reopen negotiations and agreed to reinforce some safeguards against market distortions.

Monday’s meeting between negotiators from the European Parliament and the Council of the EU was the last chance to close a hard-fought deal extending Ukraine’s trade benefits until June 2025 before the EU enters the ‘lame-duck’ period ahead of the European Parliament elections. 

The so-called Autonomous Trade Measures (ATMs), originally introduced in 2022 after the Russian invasion and due to expire in June, aim to facilitate Ukrainian agricultural exports to the EU by removing all remaining tariffs and trade barriers. 

This latest agreement comes after EU lawmakers reached a compromise on 20 March during interinstitutional negotiations. The initial deal included an emergency brake for “sensitive products,” — including poultry, eggs, sugar, oats, maize, groats and honey — which would be triggered if imports rose above the 2022-2023 average. 

However, a coalition of EU countries led by France and Poland opposed the deal and pushed for additional provisions, such as extending the reference period for the emergency brake to 2021, and including wheat and barley as sensitive commodities. 

These demands are in line with the position adopted by the Parliament in mid-March.

The blocking minority has only succeeded in extending the reference period to the second half of 2021, before the Russian invasion, when EU imports from Ukraine were significantly lower. 

EU co-legislators also agreed on Monday to start discussing a permanent tariff liberalisation with Ukraine in the coming weeks.

The agreement has been long awaited as the surge in Ukrainian food imports to the EU has been one of the main drivers of the recent farmer protests in Eastern Europe, particularly in Poland.

Polish farmers — and their counterparts in neighbouring countries such as Bulgaria, Hungary, Romania, and Slovakia — have raised concerns about cheaper agricultural products “flooding” the EU market. 

France’s push

While Warsaw has been the most vocal in the debate on ATMs, with tensions with Kyiv over Polish farmers’ border blockades, France played a key role in negotiations after it changed its initial position to join the blocking minority. 

Back in February, Paris supported the Commission’s original proposal on trade liberalisation, with only “frontline” member states pushing for reinforced safeguards, an EU diplomat told Euractiv. 

However, the French government, which also faced pressure from protesting farmers, later joined neighbouring countries in their efforts to reopen the agreement.  

Speaking after the EU summit on 21-22 March, French President Emmanuel Macron called for a more “balanced” approach and warned against the European public opinion turning against “the acceptability of Ukrainian producers” because of different production standards to those in the EU. 

Cereals rift

Although the blocking minority succeeded in pushing for a lower import threshold to trigger the safeguard measures, it failed to secure the necessary support among member states to include wheat and barley in the list of sensitive products. 

“We have a destabilisation of [cereal] prices” French Agriculture Minister Marc Fesneau told journalists on the sidelines of the Agriculture and Fisheries Council (AGRIFISH) on 26 March, adding that the wheat market was “particularly” deregulated.

Fesneau blamed Moscow for using cereals as a strategy to shake the EU market. “Russia is trying to prevent Ukraine from going to its natural export markets, which were (…) outside Europe,” he added.

On the same day, his Hungarian counterpart Istvan Nagy said an agreement without the inclusion of wheat to the list of sensitive products would be “unacceptable”. 

Against the clock

With June’s EU elections looming, the ATM renewal faces a tight deadline to be approved before the end of the legislative term.  

EU ambassadors endorsed the new deal on Monday evening, immediately after the interinstitutional negotiations.

The ball is now in the court of the European Parliament’s international trade committee, which is expected to rubber-stamp the deal at a meeting on Tuesday (9 April). 

If the committee’s MEPs agree to the revised measures, the plenary will still have to give the final go-ahead at a session on 22-25 April, the last of the current mandate. The EU Council will then also have to give the green light. 

However, if the new ATMs are not approved, the EU could return to the pre-war trade framework with Ukraine, the so-called Deep and Comprehensive Free Trade Area (DCFTA), reinstating import quotas and duties.

[Edited by Zoran Radosavljevic]

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