News in brief:
– The EU has reinstated tariffs and quotas on Ukrainian agricultural imports, ending a two-year wartime exemption and reverting to pre-war trade limits.
– While negotiations for a new deal are underway, the shift could cost Ukraine up to €4 billion annually and hamper its agricultural recovery amid ongoing war challenges.
The European Union has reimposed tariffs and quotas on Ukrainian agricultural products, ending a two-year suspension designed to support the war-torn nation.
The policy shift, effective from last Friday, reverts trade to the pre-war quota system while Brussels and Kyiv negotiate a new deal expected to offer smaller import allowances than those granted during the wartime exemption period.
The reintroduction of trade limits is a blow to Ukraine’s agriculture sector, which has remained a key pillar of the country’s economy amid the ongoing war with Russia.
Agricultural goods accounted for about 60% of Ukraine’s $24.5 billion in total exports last year, with the EU being the largest buyer.
Ukrainian officials, including Agriculture Minister Vitalii Koval, have warned that losing tariff-free access to the EU could cost the country nearly €4 billion annually.
Despite Russia’s ongoing efforts to block exports and destabilise Ukraine’s market share, agriculture remains one of the few stable revenue sources, generating nearly 20% of the national gross domestic product (GDP).
The EU faces a delicate balancing act. While it affirms strong solidarity with Ukraine, it also must address mounting complaints from European farmers who say cheaper Ukrainian imports, particularly sugar, poultry, and eggs, have undercut local prices.
Ukrainian sugar exports to the EU, for example, soared to over 500,000 tons in 2023/24—far above the pre-war quota of just 20,000 tons.
Negotiations for a long-term trade arrangement began on June 2, with the EU’s agriculture commissioner expressing hope for a deal by summer.
However, the return to pre-war quotas threatens to stall Ukraine’s fragile recovery, especially for frontline farmers already dealing with war-inflicted losses nearing $80 billion.
Without a swift and favourable agreement, Ukraine’s agricultural rebound—and broader economic resilience—could face another setback.
