How trade rules with EU have changed and what they mean for Ukrainian exports

On 29 October, a new trade agreement between Ukraine and the EU came into effect, replacing the annex to the Association Agreement that outlined the schedule for liberalising import duties.

This marks the first systematic review of mutual market access conditions between Ukraine and the EU since the launch of the Deep and Comprehensive Free Trade Area nearly a decade ago.

The new arrangement reaffirms that import duties on industrial goods (with the exception of food, beverages and tobacco) have been fully eliminated in bilateral trade.

Only tariffs on agricultural and food products remain, but even this list has been narrowed compared to the terms initially agreed upon in 2012.

Read more about the new trade terms and their implications in the article by Veronika Movchan of the Institute for Economic Research and Policy Consulting: EU’s carrot and stick: how trade with Ukraine will work from now on. 

The new deal involves a detailed review of tariff quotas applied to Ukrainian exports. Of the 36 tariff quotas defined in the original agreement, 31 remain in place today.

Four quotas, including those for mushrooms and processed milk products, have been completely removed.

Only four quotas remain unchanged: for beef, pork, lamb (which Ukraine still cannot export due to food safety restrictions) and for cigarettes and cigars.

For all other products, duty-free volumes have been increased, and many quotas have been substantially revised. For example, several items (including yogurt, kefir, grape juice and protein concentrates) were fully exempted from tariffs.

Four quotas (for starch and processed sugar products) were merged into two larger ones, while one new quota was introduced for flour separated from the quotas for wheat, barley and corn. This change, long requested by producers, now makes competition for duty-free volumes more realistic.

Some quotas were expanded dramatically: for sugar, the new quota is five times larger than before; for honey – almost six times; and for cereals – more than four times.

Overall, these changes increase Ukraine’s potential duty-free exports under tariff quotas by about 35% compared to the 2014 Association Agreement.

However, this expansion is not enough to offset the end of the autonomous trade measures (ATM) that granted Ukraine full duty-free access to the EU market after Russia’s full-scale invasion – a temporary regime that lasted until June 2025.

According to estimates by the Institute for Economic Research and Policy Consulting (IER) and the German Economic Team (GET), Ukraine’s exports to the EU will decline by around $1.1 billion compared to 2024, despite the new tariff quotas.

The sharpest drop is expected in wheat exports, followed by barley, poultry, eggs, honey and apple juice – products for which new quotas are smaller than the volumes exported to the EU in 2024.

Ukraine has also revised access conditions for EU producers to its own market.

Another crucial aspect of the new deal is the list of production standards Ukraine has committed to implement by the end of 2028, aligning its legislation with EU acquis on animal welfare, feed, veterinary medicines, pesticide use, water pollution, industrial emissions and GMOs.

If Ukraine fails to meet these obligations, both sides may partially or fully revert to the original free trade terms. If it succeeds, further liberalization will be possible.