Parliament backs temporary trade benefits for Ukraine paving the way to talks for long-term agreement

7 months ago 41

On Tuesday 23 April, the plenary gave its final approval to extend the liberalisation of imports from Kyiv until June 2025, including measures to protect EU-sensitive agricultural sectors and the pledge of the Commission to start talks soon with Kyiv for a permanent solution.

The text passed by 428 votes in favour, 131 against, and with 44 abstentions.

“This vote will simultaneously strengthen the economic resilience of Ukraine and protect the interests of European farmers,” said the European Parliament’s rapporteur Sandra Kalniete (EPP, Latvia) in a press release.

After months of painstaking negotiations and political drama which risked the EU’s commitment to help the Ukrainian economy, the final text contains special safeguards for EU farmers.

It includes a statement from the Commission confirming that consultations with Kyiv for a new permanent agreement on reciprocal tariff liberalisation, will start as soon as the new temporary framework is adopted.

The last step of the adoption procedure is the formal approval from the Council, which is expected in the next weeks. The regulation will enter into force immediately after 5 June, when the current temporary measures expire.

A permanent solution, namely on the impact of agricultural products, was requested by the EU leaders in the conclusions of the summit, 21-22 March.

Also the Ukrainian trade minister Taras Kachka, in an interview with Euractiv, underlined the need to move on from temporary trade benefits and discuss a new trade agreement.

The current one stems from the EU-Ukraine Association Agreement entered into force in 2017. Article 29 provides for the progressive elimination of duties and the “possibility of accelerating and broadening the scope of such elimination.”

The end of the temporary measures approach would allow Brussels and Kyiv the opportunity to plan in the long term, giving signals to adapt for the EU and Ukrainian agriculture.

Kyiv agriculture, as confirmed by the outlook of the International Grain Council, is already changing with a reduction in wheat production and an increase in oilseed production.

The tug-of-war

The prolongation of the temporary suspension of duties and tariffs for Ukrainian products is the outcome of a negotiation that lasted months.

This was mainly because of concerns expressed by the European farmers for the impact on the internal market of the ‘flood’ of low cost food imports from Kyiv.

The protests mainly came from EU countries bordering Ukraine, with unilateral import restrictions still in place in Poland, Hungary, and Slovakia.

EU lawmakers reached a final compromise on 8 April, after member states managed to reopen negotiations on a former agreement signed on 20 March.

To win over resistant MEPs on the agriculture committee and member states, in particular France and Poland, the deal provides for reinstating duties and tariffs automatically when the import levels of ‘sensitive products’, — poultry, eggs, sugar, oats, maize, groats and honey — rise above the average of a reference period starting from the second half of 2021 up to 2023.

On top of that, in a statement attached to the agreement’s text, the Commission pledges to “pay particular attention to the monitoring of imports of grain, in particular wheat, and notably to the concentration of such imports in Member States neighbouring Ukraine.”