Stay informed with free updates
Simply sign up to the War in Ukraine myFT Digest — delivered directly to your inbox.
Ukraine is prepared to accept restrictions on its trade with the EU to defuse a bitter political dispute with Poland, but is also urging the bloc to ban Russian grain imports, the Ukrainian trade minister has said.
Taras Kachka told the Financial Times that Kyiv was in favour of new curbs on Ukrainian agricultural imports, although the EU also needed to ban Russian farm exports that are still reaching the bloc via Belarus and the Baltics.
“Maybe for a transitional period this kind of . . . managed approach to trade flows between Ukraine and the EU is something that we all need,” Kachka said. But he added: “For wheat, it is not Ukraine that is causing problems for Polish farmers, it is Russia.”
After Russia’s full-scale invasion of Ukraine in 2022 the EU lifted tariffs on Ukrainian imports, but Poland and other neighbouring countries soon experienced a glut and farmers have taken to the streets and joined border blockades to protest the unfair competition.
Under the previous government, Warsaw imposed a unilateral ban in violation of EU trade rules, and continued protests in recent weeks have pressured Prime Minister Donald Tusk to seek exemptions from Brussels and carry on with the restrictions.
“We need to find a solution that will effectively protect the Polish and European markets against unequal competition,” Tusk said on Monday during a visit to Lithuania.
He agreed with the Ukrainian minister on the need to ban agricultural imports from Russia and Belarus, a measure that would be backed by Lithuania, said the country’s Prime Minister Ingrida Šimonytė. Tusk said restrictions at the level of the entire bloc would be more efficient, after Latvia recently imposed a countrywide ban on Russian imports.
An EU-wide ban, however, would be difficult to achieve, as several member states oppose such a move due to fears it would destabilise global markets and aggravate economic and social crises in developing countries. Russian grain exports to the EU have increased by more than 50 per cent to 1.5mn tonnes between 2022 and 2023.
Kachka accused Moscow of stirring up the Polish protests, a charge also levelled by EU trade commissioner Valdis Dombrovskis. Kachka claimed Moscow was “definitely” behind an attack last month by Polish farmers on a train carrying Ukrainian grain, which they succeeded in turning over and spilling the cargo. The Russians “are involved in cases of vandalism or sabotage that can be treated as hostile towards Ukraine in general”, he said.
Kachka said Kyiv supported new measures proposed by Brussels to impose caps on imports of eggs, poultry and sugar from June and to allow individual countries to close their markets to Ukrainian grain except for onward transit to other countries.
He acknowledged Ukraine’s sugar production surged from 7,000 to 500,000 tonnes between 2022 and last year: “How fast it was done can scare everyone.”
Kyiv also recently agreed to divert corn exports to Italy and Spain via the Black Sea rather than by road through neighbouring countries to reduce tensions.
“We voluntarily stopped allowing the export of corn to all five neighbouring member states. Despite this, we exported another new record — 15mn tonnes of corn in the calendar year 2023. So we have big demand in other states. Ukraine filled gaps in EU production,” Kachka said.
Ukraine’s Prime Minister Denys Shmyhal separately called on Monday the Polish border blockade “senseless”, even if had not stopped humanitarian aid and weapons from entering Ukraine. “The absurdity of this situation is that Poland is losing more than Ukraine is losing,” he said.
Ukrainian and Polish officials are set to meet again next Monday, with a view to resolving their dispute by the end of the month.
Additional reporting by Isobel Koshiw in Kyiv
Source: Economy - ft.com
