MEPs back one-year trade liberalisation with Ukraine

The EU is Ukraine’s largest trading partner, accounting for 40% of Ukrainian trade. [SHUTTERSTOCK/GREBENYUK]

The European Parliament has endorsed a one-year suspension for all tariffs and quotas on Ukrainian exports, including agricultural products, processed agricultural products, and fruit and vegetables.

On Thursday (19 May), MEPs voted in favour of the temporary trade liberalisation with Ukraine proposed by the Commission in the aftermath of the ongoing Russian invasion.

The Parliament’s swift approval came less than one month after the EU executive’s unprecedented proposal of suspending import duty to both boost Ukraine’s economy and contribute to the country’s gradual integration into the EU internal market.

On his Twitter account, the EU’s trade Commissioner Valdis Dombrovskis thanked European lawmakers “for fast-tracking this important measure of support for Ukraine.”

“We must support Ukraine at all levels with every tool at our disposal: not only with weapons and sanctions but with our trading power, too,” said Parliament’s standing rapporteur for Ukraine, the Latvian Christian-democrat Sandra Kalniete.

She added that Europe has to show “absolute, unshakeable” support for its trade partner currently in distress.

The EU is Ukraine’s largest trading partner, accounting for 40% of Ukrainian trade. Ukraine is also the EU’s 15th largest trading partner, representing around 1.2% of overall EU trade.

In 2021, Ukraine exported goods worth €24.1 billion to the EU, mainly raw materials like iron and steel, but also agricultural products.

Since 2017, the ‘Deep and Comprehensive Free Trade Area’ between the EU and Ukraine has been in force, ensuring preferential access to the EU’s single market for Ukrainian businesses and allowing for increasing trade between the two partners.

According to calculations by the Ukrainian Business and Trade Association, an abolition of all quotas and tariffs by the EU could – in normal times – lead to the increase of Ukrainian exports to the EU by more than half a billion euros.

The measures will also remove import duties on industrial products such as anti-dumping duties and safeguard measures on steel imports for a period of one year.

The temporary liberalisation will be applied on the day following its publication in the official journal of the EU.

EU Commission wants to scrap import tariffs for Ukraine

The European Commission proposed on Wednesday (27 April) scrapping for one year all EU tariffs and quotas on products imported from Ukraine, in a bid to support the Ukrainian economy that is suffering heavy losses due to the ongoing Russian invasion.

Agri-products at the heart of the liberalisation

In 2021, agricultural products accounted for approximately one-third of the EU’s imports from Ukraine. In terms of products, 54% of the agri-food imports from Ukraine in 2021 were made of sunflower oil (30%) and maize (24%), according to figures from the European Commission.

However, Russia’s war had led Ukraine to halt exports of key foodstuffs such as wheat and sunflower oil in order to safeguard domestic supply, but also because of the blockade of Ukrainian ports after the invasion.

According to socialist MEP Paolo De Castro, Ukrainian farmers, producers and people must be supported to safeguard their economic potential and productivity.

“It’s with this objective in mind, that today we approved a one-year suspension of EU import duties on all Ukrainian exports,” he told EURACTIV, adding that it is a fundamental, first step in view of the ‘Marshall Plan’ the EU wants to put in place for the future recovery of Ukrainian partners.

Despite the recently unveiled plan to improve EU-Ukraine connectivity for grain export mostly through railways, doubts remain over the effective implementation of urgent and medium-term measures to help Ukraine export goods.

According to a Ukrainian lawmaker, the Commission’s ‘solidarity lanes’ will not help in significantly increasing exports without deblocking southern Ukrainian ports or rerouting through Baltic ports.

EU’s ‘solidarity lanes’ will not ‘significantly’ help Ukraine export, says Ukrainian MP

The recently announced EU measures to help Ukraine export grain despite the Russian blockade of its seaports are not enough as they will be mostly based on the country’s obsolete railways, a Ukrainian lawmaker has told the European Parliament.

[Edited by Nathalie Weatherald]

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