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There’s a persistent belief in the EU that the bloc does its best work when countries are trying to join or trade with it, not necessarily after they’re in. During the long process of accession, the theory goes, applicant governments reduce their public debt, expose the dusty corners of their economies to the cleansing blast of single market competition and import the labour and environmental standards and rule of law for which Europe considers itself famous. More distant countries ineligible for membership can get a dose of market access and European values by signing a preferential trade agreement.
Events this week suggest that confidence is a little overdone. Poland, Hungary and Slovakia have blatantly violated EU and global trade rules by declaring they will block grain imports from Ukraine, the EU’s most politically significant accession candidate since the first wave of former Soviet bloc countries (including those three) joined in 2004. The rogue nations aren’t exactly showcasing the rule-of-law training module they passed to gain membership themselves.
Ukraine, not prepared to sit down and shut up for the sake of European solidarity, has promptly threatened direct retaliation and a case against the three countries at the World Trade Organization. Given the strategic imperative of hugging Kyiv close and the self-congratulatory fuss EU politicians made last year when they opened their markets to imports from Ukraine following the Russian invasion, this is a really bad look.
It’s worth emphasising that the deliberate breaches of law might partly be theatre for the benefit of worried farmers, especially since Poland and Slovakia are both holding elections within the month. If so, the conflict could still be defused without an irregular trade war or even WTO litigation. The governments’ problems are not imaginary, given the potential impact of competition from Ukraine’s world-class grain producers.
But there’s already been one attempt to solve the problem, and it produced a deal that fell apart. Four eastern European EU member states — the three current miscreants plus Bulgaria — blocked imports of Ukrainian grain earlier this year. In May, the EU negotiated a messy and expedient temporary agreement involving country-specific import restrictions (extending to Romania) that themselves violated the principle of single market unity. These were lifted last week in return for Ukraine agreeing voluntary export restraints, but Warsaw, Budapest and Bratislava have reneged on the EU side of the bargain.
The Polish and Hungarian governments have, of course, long worried the European Commission and other EU member states by their attitude towards the domestic rule of law, including fair elections and an independent judiciary. Their antics have shaken the traditional belief that EU membership puts countries on an irrevocable journey towards liberal democracy.
Ironically, the implications of this for Ukraine’s own accession are obvious, given the country’s weak state capacity and endemic corruption. But even for Poland’s Law and Justice government and Hungary’s Viktor Orbán, disregarding EU single market and external trade commitments so blatantly despite Brussels leniently bending the rules around them is a new departure.
To be sure, the EU is hardly the only power that has difficulty getting trade and geopolitical strategy to line up. The US finds itself constrained by Congress and public opinion from signing any substantive preferential trade agreements, even in the Asia-Pacific, where they might help check Chinese influence. But the US does at least have serious hard power: Kyiv remains heavily dependent on its military support. For the EU, despite a rapid expansion of its geopolitical ambitions since the Russian invasion, trade remains one of its main tools to project influence abroad. With another ladle-full of irony, it was a crisis over Ukraine’s trade deal with the EU that ultimately provoked Vladimir Putin’s annexation of Crimea in 2014.
Although it has gone further and faster in imposing trade and financial sanctions on Moscow than at any time in its history, there too the EU has shown internal weaknesses. A minority of member states have constrained the EU from tightening its grip — especially Greece, which has opposed new restrictions on trade with Russia to help its shipowners.
To be clear: blocking Ukrainian grain exports is not going to cripple Kyiv’s war effort, and nor will it exactly cause President Volodymyr Zelenskyy to give up on EU membership in disgust and turn towards the embrace of Putin. But it is disturbing that the biggest challenge to the EU’s credibility in decades has not produced a more coherent and rule-bound response than this.
Ukraine’s particular features — a large and poor country with weak governance but super-competitive farmers — were always going to make it difficult to absorb into the EU. It’s very possible that the duties and privileges attendant on joining the union will have to be revisited as part of its accession, and possibly new categories of membership created. That will require a lot of ingenuity and goodwill. For three of Ukraine’s neighbouring countries to break a deal and openly trash EU and international law for their own short-term gain is not the way to do it.
alan.beattie@ft.com
Source: Economy - ft.com
