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The EU has agreed to reduce imports of many Ukrainian foodstuffs to appease protesting farmers who claim a glut has reduced their income.
Under a provisional deal struck on Wednesday morning, negotiators from member states and the European parliament added strict conditions to the tariff-free imports of a host of key products from the war-torn country.
Brussels will levy tariffs on poultry, eggs, sugar, oats, maize, honey and groats (grain kernels) if quantities exceed the mean average imported in 2022 and 2023 under an “emergency brake”.
The move, which is part of the overall extension of trade liberalisation with Ukraine for another year, could cost Kyiv tens of millions of euros in tariffs if it cannot find alternative markets.
France joined Poland and other neighbours of Ukraine to widen restrictions, supported by members of the European parliament. But a rearguard action by other member states killed a parliament proposal to cut the tariff-free quotas even further.
The European Commission has also pledged to buy surplus produce using public money if prices drop too far. EU cereal prices are at a four-year low. It would also be able to act if a single country’s market is disrupted, rather than just the entire 27-member EU.
In addition, the commission is preparing to put tariffs on Russian and Belarus grain to cut imports.
Some countries accused fellow member states of deserting Kyiv in its hour of need. Agriculture accounts for almost half of Ukraine’s exports.
“France and Poland and the European parliament, who are the most vocal about what we need to do to help Ukraine, have crumbled at the first sight of a tractor,” said one diplomat.
The curbs start on June 6, when tariff-free access for Ukrainian imports, which began in 2022, is renewed for another year.
The large increase in imports exacerbated farmers’ protests over soaring costs and regulation. Poland, Hungary and Slovakia maintain unilateral bans introduced last year in violation of EU trade rules. They only allow the import of many products if they are heading to other countries. New Polish Prime Minister Donald Tusk has said he would only lift the ban if he secured wider safeguards from Brussels.
However, the food industry on Monday warned of a shortage of sugar in Europe and said Ukrainian imports were needed.
“We see no justification for drastically reducing imports from Ukraine,” said Yuriy Sharanov, president of CIUS, which represents sugar users from the food and drinks sector. “The EU has a chronic sugar deficit and needs to import between 2mn and 3mn tonnes annually to meet demand.”
EU prices are above the global average and the new measures would increase the cost of Ukrainian sugar by 50 per cent, he added in a letter to EU institutions.
Manfred Weber, president of the centre-right EPP party that includes Tusk, denied on Tuesday that the EU was letting down Ukraine. “We want to support Ukraine in a comprehensive way but it wouldn’t be fair if we said to the farmers that they are the only ones who have to pay for this and their prices collapse,” he told reporters.
Opponents of the curbs argue the economic sacrifices made for Ukraine have not just been in agriculture. Germany, for example, is on the verge of recession partly because it banned Russian pipeline gas, replacing it from expensive sources with big cost increases for business and householders.
The deal requires final approval by the European parliament and member states.
Additional reporting by Guy Chazan in Berlin
Source: Economy - ft.com
