Bloc to apply ‘emergency brake’ on imports from Kyiv signalling difficult membership talks ahead
Andy Bounds in Brussels JUNE 27 2024
The EU is set to reimpose tariffs on Ukrainian sugar and egg imports from Friday, using an “emergency brake” designed to appease farmers who protested across the bloc earlier this year.
The move comes just two days after the bloc opened membership talks with Kyiv, whose armed forces are fighting against Russia’s war of aggression.
Tariffs of €89 per tonne of Ukrainian oats were reintroduced last week and will last until June 2025, with a similar decision on eggs and sugar due on Friday, according to two people familiar with the matter.
The reimposition of tariffs underlines how difficult Kyiv’s accession negotiations will be.
Ukraine is an agricultural powerhouse which can produce food more cheaply than EU member states and would still become the main beneficiary of farm subsidies — a position at present held by France.
Brussels agreed to drop all tariffs and quotas on Ukrainian food imports in June 2022, four months after Russia’s full-scale invasion, to boost Kyiv’s revenues and help supplies reach customers in the developing world.
But within months, farmers in Poland, Hungary, Slovakia and other neighbouring countries complained that a glut of Ukrainian imports was pricing them out of the market. Those countries unilaterally imposed an embargo on many products, allowing them to enter only for onward transit, in breach of EU law.
EU member states earlier this year extended the free-trade regime until 2025, but introduced caveats in response to farmers’ protests. The bloc is set to reintroduce tariffs on Ukrainian poultry, eggs, sugar, oats, maize, honey and groats (grain kernels) if quantities exceed the mean average imported in 2022 and 2023.
Oats have hit that level, with more than 6,440 tonnes imported since January 1.
Eggs and sugar have also done so, according to the people familiar with the situation. Tariffs will be announced on Friday, they said, amounting to €419 per tonne of white sugar and €339 per tonne of raw sugar. Eggs will cost an additional 30 cents per kg.
Taras Kachka, Ukraine’s trade representative, told the Financial Times the tariffs were in line with the current agreement but that his government was in talks with Brussels to improve them. “The aim is to remove all bilateral obstacles that are not in line with the agreement,” he said.
An EU diplomat said: “Governments all say they are in favour of Ukraine joining but we will see. The agriculture talks will be very difficult.”
Dmitry Grozoubinski, author and director of the consultancy ExplainTrade, said the tariff move was bad news for Ukraine’s prospects of joining the EU. “It’s a formidable agricultural player. It’s still competitive while fighting a war. It has got no subsidies, chronic under-investment, chronic corruption, it’s not mechanised and has complicated land ownership. Imagine when it wins the war and gets investment.”
Grozoubinski added: “If the only way the politics works for accession is to give with one hand and take back with the other, it’s not good news.”
He said countries ignoring EU trade rules the way Poland and others have done by unilaterally banning Ukrainian agricultural products was rare. “It’s like California shutting its ports because they don’t like what the US Trade Representative has done.”
The European Commission has issued warnings to the member states that have blocked Ukrainian goods but has yet to take legal action, which could lead to fines.
A commission spokesperson declined to comment on the upcoming tariffs decision.
www.ft.com
Andy Bounds in Brussels JUNE 27 2024
The EU is set to reimpose tariffs on Ukrainian sugar and egg imports from Friday, using an “emergency brake” designed to appease farmers who protested across the bloc earlier this year.
The move comes just two days after the bloc opened membership talks with Kyiv, whose armed forces are fighting against Russia’s war of aggression.
Tariffs of €89 per tonne of Ukrainian oats were reintroduced last week and will last until June 2025, with a similar decision on eggs and sugar due on Friday, according to two people familiar with the matter.
The reimposition of tariffs underlines how difficult Kyiv’s accession negotiations will be.
Ukraine is an agricultural powerhouse which can produce food more cheaply than EU member states and would still become the main beneficiary of farm subsidies — a position at present held by France.
Brussels agreed to drop all tariffs and quotas on Ukrainian food imports in June 2022, four months after Russia’s full-scale invasion, to boost Kyiv’s revenues and help supplies reach customers in the developing world.
But within months, farmers in Poland, Hungary, Slovakia and other neighbouring countries complained that a glut of Ukrainian imports was pricing them out of the market. Those countries unilaterally imposed an embargo on many products, allowing them to enter only for onward transit, in breach of EU law.
EU member states earlier this year extended the free-trade regime until 2025, but introduced caveats in response to farmers’ protests. The bloc is set to reintroduce tariffs on Ukrainian poultry, eggs, sugar, oats, maize, honey and groats (grain kernels) if quantities exceed the mean average imported in 2022 and 2023.
Oats have hit that level, with more than 6,440 tonnes imported since January 1.
Eggs and sugar have also done so, according to the people familiar with the situation. Tariffs will be announced on Friday, they said, amounting to €419 per tonne of white sugar and €339 per tonne of raw sugar. Eggs will cost an additional 30 cents per kg.
Taras Kachka, Ukraine’s trade representative, told the Financial Times the tariffs were in line with the current agreement but that his government was in talks with Brussels to improve them. “The aim is to remove all bilateral obstacles that are not in line with the agreement,” he said.
An EU diplomat said: “Governments all say they are in favour of Ukraine joining but we will see. The agriculture talks will be very difficult.”
Dmitry Grozoubinski, author and director of the consultancy ExplainTrade, said the tariff move was bad news for Ukraine’s prospects of joining the EU. “It’s a formidable agricultural player. It’s still competitive while fighting a war. It has got no subsidies, chronic under-investment, chronic corruption, it’s not mechanised and has complicated land ownership. Imagine when it wins the war and gets investment.”
Grozoubinski added: “If the only way the politics works for accession is to give with one hand and take back with the other, it’s not good news.”
He said countries ignoring EU trade rules the way Poland and others have done by unilaterally banning Ukrainian agricultural products was rare. “It’s like California shutting its ports because they don’t like what the US Trade Representative has done.”
The European Commission has issued warnings to the member states that have blocked Ukrainian goods but has yet to take legal action, which could lead to fines.
A commission spokesperson declined to comment on the upcoming tariffs decision.
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