20:50 17.01.2024

European Commission wants to extend duty-free trade with Ukraine another year - Polish govt

4 min read
European Commission wants to extend duty-free trade with Ukraine another year - Polish govt

The European Commission, despite the protestations of European countries neighboring Ukraine, is preparing a draft resolution to extend the duty-free mechanism for Ukrainian exports through mid-2025, Ukrainian media reported, citing an interview with Polish Minister of Agriculture Czeslaw Siekierski in Business Insider.

He says that the negative consequences of imports from Ukraine are becoming increasingly noticeable in the countries of not only Eastern but also Western Europe and they concern an increasingly wide range of goods besides grain. France, Austria and Germany are talking about threats to grain, poultry, fruit and sugar markets. They are discussing the need to renew tariff quotas, which are currently suspended under EU rules.

"Poland supports these demands, and we approached the European Commission with a request to renew tariff quotas on some sensitive goods, but the Commission rejected it," he said.

Poland's Agriculture Minister said that the opening of the European market to Ukrainian agricultural products could "completely destabilize not only our domestic market, but also the European market in the future."

Siekierski said that in 2022-2023, "three-quarters of Ukrainian grain exports went to countries neighboring Ukraine, which caused serious market disruptions." This led to a decrease in purchase prices for agricultural products while simultaneously increasing purchase prices for means of production. All this has, and continues to influence the functioning of agriculture in Eastern European countries as a whole.

Siekierski said he intends to meet with European Commissioner for Trade Valdis Dombrovskis in the near future. The ministry will propose that the European Commission resolution include a new protective mechanism that provides for the application of regional restrictions "if a market problem affects not the entire European Union, but one country or region."

In addition, the Polish Minister, as part of the Green Week fair starting in Berlin on January 18, will hold negotiations with ministers of other countries on the import of Ukrainian goods to Poland and the EU.

He added that the first results of Polish-Ukrainian negotiations are already visible.

"We want to develop a way to protect against the negative consequences of importing agricultural products from Ukraine that is acceptable to all EU participants. We are analyzing and conducting internal consultations, in particular, regarding the mechanism for licensing the export of agricultural products to Poland, which was proposed by the Ukrainian side," he said.

He said a solution such as this, "with appropriate support from the European Commission," could be acceptable.

Siekierski stressed that Poland has the political will to develop transit infrastructure for the export of Ukrainian products.

"We will work on the development of port infrastructure. Previously, unfortunately, there were few significant measures in this area. Therefore, in order to streamline and improve the possibilities of transit of agricultural raw materials from Ukraine, it will be necessary to cooperate with other ministries on the development of port, railway, and warehousing infrastructure," the minister said.

He added that Poland is counting on more active support from the European Commission and support for the development of Polish port and railway infrastructure using European Union funds.

"It is very important for Poland to ensure the proper functioning of its "solidarity corridors" so that exported Ukrainian agricultural raw materials are sent to those regions of the world that need Ukrainian grain and food," Siekierski said, recalling that Polish corridor accounts for approximately 15-20% of the Ukrainian grain transported along these corridors in general.

As previously reported, the duty-free trade mechanism between Ukraine and the EU introduced in 2022 (and valid through June 2024), insofar as it led to the reorientation of a significant part of Ukrainian agricultural exports to Europe, led to cheap food from Ukraine ending up in the neighboring countries of Hungary, Slovakia, Poland, Bulgaria and Romania. This sparked protests from local farmers.

Under pressure from these countries, the European Commission was forced to take special measures in May 2023, banning the import of Ukrainian food into these states (specifically, wheat, rapeseed, sunflower and corn). After the ban expired in mid-September, Hungary, Slovakia and Poland, contrary to the will of the European Commission, introduced prohibitive measures at the national level. Moreover, Poland has expanded its list of products prohibited for import to include rapeseed cake and meal, as well as corn bran, wheat flour and derivative products. Hungary brought this list to 24 product items. Kyiv responded by filing a complaint with the World Trade Organization (WTO). Currently, WTO proceedings are suspended for negotiations with the participation of the European Commission.

Negotiations are currently underway on the introduction by Ukraine of a mechanism for licensing the export of its agricultural products with mandatory verification in each of the five countries.