The European Fee is about to unveil on Wednesday (30 January) a proposal to increase its duty-free commerce coverage with beleaguered Ukraine — however some argue that quotas on sure imports would have a ”catastrophic” influence on Ukraine’s financial system.
The renewal of the so-called Autonomous Commerce Measures (ATMs) is predicted to introduce varied modifications to the primary iteration, which was activated in June 2022, a couple of months after the Russian invasion of Ukraine.
New safeguard mechanisms, designed to handle considerations from neighbouring international locations, would come with an emergency mechanism to guard the markets of member states, when crucial, and particular limits for imports of delicate merchandise similar to eggs, poultry and sugar, in keeping with EU diplomats.
And emergency measures might be activated when issues are recognized simply in a single EU nation, not within the EU as an entire.
”The temper has modified,” an EU senior diplomat stated, referring to the pondering of the EU fee — which initially dominated out any quotas.
Nevertheless, in keeping with the pinnacle of the Federation of Employers of Ukraine, Dmytro Oliinyk, the introduction of restrictions on agricultural merchandise may have a ”catastrophic” influence on Ukraine’s financial system.
”Any commerce limitations to Ukraine’s exports may undermine its macroeconomic stability and necessitate extra direct financial assist from the EU,” he stated in a letter to EU fee president Ursula von der Leyen.
Oliinyk additionally warned that any vital export restrictions could have penalties for the soundness of Ukraine’s rural areas, decreasing the chance of retaining folks within the nation.
An finish to bans?
The brand new proposal — which might enter into drive in June — is predicted to increase the duty-free commerce settlement with Ukraine till mid-2025.
And it may additionally assist Poland, Slovakia, and Hungary to drop their present bans on Ukraine grain imports, which led Kyiv to file a criticism with the World Commerce Group in September final yr.
Frontline neighbouring states have argued that their native markets and producers have skilled disruptions attributable to a surge in cheaper Ukrainian imports.
However introducing sure restrictions within the EU laws would in impact ”legalise” such bans, in keeping with Oliinyk.
”Implementing additional commerce limitations to Ukraine’s agricultural exports will undoubtedly undermine the nation’s capacity to battle off Russian aggression. Our European neighbours ought to actually think about whether or not shopping for a few of our grain is admittedly worse than going through the onslaught of Russian weapons,” Oliinyk informed EUobserver.
Whereas the fee deems the bans illegitimate, no sanctions have been imposed to encourage diplomatic efforts and dialogue.
”Thus far, the monitoring has not proven opposed results on the union market,” a fee spokesperson informed EUobserver.
For the reason that change of the federal government in Poland following the October elections, Warsaw has been holding intense talks with Ukraine and the EU Fee. And their ban may seemingly be dropped earlier than June.
Alternate options for maize or rape seeds
Slovakia, Bulgaria, Hungary, Romania and Poland beforehand raised considerations concerning the influence of the suspension of import duties, quotas, and commerce defence measures on Ukrainian exports to the EU.
Slovakia, for instance, has seen exports of wheat and maize to Germany lower from 313,000 tons in 2021 to 91,000 tons in 2023.
Moreover, they’ve additionally known as for the introduction of tariff quotas for essentially the most delicate agricultural merchandise in a letter to the fee.
Echoing the identical considerations, centre-right MEPs additionally stated farmers and producers within the poultry, sugar and eggs sectors are those going through vital challenges attributable to vital surges in imports from Ukraine.
An EU diplomat informed EUobserver that for maize or rape seeds, which have already got zero import obligation as per the EU customs tariff, reintroducing tariff fee quotas is not an choice — and that as an alternative, options must be discovered.
The proposal comes simply earlier than EU leaders assembly in Brussels to attempt to attain an settlement on offering some €50bn in urgently wanted assist for Ukraine.
It’s estimated that Ukraine’s meals exports accounted for 61 p.c of all its exports in 2023.