What challenges does the new trade deal with EU pose for Ukraine?
On 13 October, EU member states approved a package of agreements marking the next stage of liberalising access to the EU market for a wide range of Ukrainian agri-food products.
The approved arrangements though represent only a modest step forward compared to pre-war trade conditions under the EU-Ukraine Association Agreement.
Read more about why Ukrainian exporters and officials should approach them with caution in the column by Nazar Bobytskyi of the Brussels office of the Ukrainian Agribusiness Club (UCAB): The new trade agreement with the EU: what additional risks it brings for Ukrainian farmers.
According to UCAB estimates, compared to the previous preferential regime, Ukrainian agricultural exporters will lose around €900 million in annual export revenues.
For goods classified as "highly sensitive," such as poultry, sugar, eggs, honey, wheat and corn, tariff quotas will grow only slightly compared to pre-war levels under the Association Agreement: from 90,000 to 120,000 tons for poultry, from 6,000 to 18,000 tons for eggs and albumins, from 20,000 to 100,000 tons for sugar, from 1 to 1.3 million tons for wheat.
For the next category of products deemed less "sensitive" in Brussels, such as starch, food additives, grains and powdered milk, quotas will be significantly expanded, up to the level of the 2024 autonomous trade preferences. Notably, this category includes products in high demand by the European food industry as essential raw materials or ingredients.
The remaining goods (mushrooms and processed dairy products), which traditionally did not exhaust import quotas under the Association Agreement, will receive a fully liberalised import regime without quota limits.
According to Bobytskyi, a clearly positive aspect for Ukrainian exporters is the division of quotas among related product categories, for example, separate quotas for specific fruit juices (such as grape juice) and for flour separately from cereals.
The agreements will enter into force after approval by both parties and will remain valid until the end of 2028, after which they may be revised.
Yet, the EU trade policy expert warns that exporters and Ukrainian officials should treat these arrangements with caution.
Primarily because the deal differs fundamentally from traditional free trade agreements and includes so-called safeguard clauses regarding imports of Ukrainian agricultural products.
"The agreements establish extremely vague grounds for introducing safeguard measures, including 'economic,' 'social' and 'environmental' difficulties that a party might allegedly face due to increased imports," Bobytskyi writes.
Moreover, the agreements allow individual member states to initiate the application of safeguard measures, effectively making the trade deal a hostage to political turbulence within national governments.
In an era of eroding international trade norms, the EU trade policy expert argues that Ukraine’s only effective strategy remains proactive engagement, along with patient, long-term work with European consumers of Ukrainian goods, as well as suppliers of equipment, technologies, and capital.
The goal should be to cultivate a strong pro-Ukrainian lobby capable of preventing or softening political frictions in Kyiv-Brussels relations.
At the same time, Ukraine must continue to "chip away at the rock" of EU accession negotiations.
Another crucial aspect of the agreement, according to the expert, is Ukraine’s commitment to rapidly implement a broad range of EU agri-production standards into national legislation within four years of the deal’s entry into force. Notably, this adaptation process is separate from formal EU accession talks.