Why Ukraine will struggle to respond to Polish trade restrictions

Wednesday, 28 February 2024

Polish farmers demand to ban uncontrolled Ukrainian agro imports. They stage protests within the country and block the border with Ukraine to achieve their goal.

The Polish government cannot influence the farmers because the majority of Poles support their demands. The government is even less likely to comply with the European Commission's directives amidst the crisis.

Brussels itself demonstrates a toothless policy towards countries that unilaterally restrict imports of certain goods from Ukraine, contrary to the European Commission's decision.

The unwillingness of Polish farmers to seek compromise makes it impossible to implement the "mutual plan of understanding" proposed by the Ukrainian government.

Read more in the article by Yuriy Panchenko, European Pravda's editor – New reality and new challenges: how to protect Ukrainian exporters.

Kyiv prefers to continue negotiations, hoping for a compromise.

President Zelenskyy stated that if the Prime Ministers of Ukraine and Poland cannot reach a compromise, then "we will defend our business."

Most likely he meant the introduction of a mirror ban on Polish agro imports, mentioning the protection of Ukrainian business, primarily dairy products, which have a significant share on the Ukrainian market.

This step could be a powerful response to Poland: unlike Ukrainian farmers, Polish dairy producers will find it much more difficult to find alternative markets to replace the Ukrainian one.

This step has several drawbacks though.

"Ukrainian legislation does not provide legal mechanisms that would allow the government to introduce a trade ban or restrictions on Polish products specifically as a response to Poland's actions until the WTO Dispute Settlement Body makes a decision," points out Olena Omelchenko, Head of International Trade Practice at Ilyashev and Partners.

Last year, Kyiv announced a complaint at the World Trade Organization (WTO) against all countries that introduce restrictions on Ukrainian agricultural products.

Filing a complaint has caused considerable concern among Ukraine's neighbours despite all the difficulties with the WTO arbitration functioning.

As Olena Omelchenko notes, Kyiv has other instruments, which could be used with political will: anti-dumping, sanitary, or phytosanitary measures or the introduction of temporary restrictions.

Moreover, achieving success will not be easy even in such a scenario.

The thing is that the Polish food industry does not have such electoral influence in Poland as farmers do. So, it is not certain that such a step will force the Polish government to change its policy.

And finally, Warsaw has promised to further expand the ban on new positions of Ukrainian imports in response.

Moreover, claims to Ukrainian products are made not only by farmers from other EU countries.

Therefore, winning this trade war will be very tough.

Kyiv needs to prepare a detailed analysis of the protection tools to increase Ukraine's success chances. They come to the point which of those tools could be effective or, on the contrary, could bring more risks.

That is why European Pravda together with the law firm Ilyashev and Partners is reviving the special project Trade Wars, launched before the full-scale Russian invasion.

If you notice an error, select the required text and press Ctrl + Enter to report it to the editors.