EU countries seal hard-line deal on Ukrainian grain, raising possibility of tariffs

But the outcome that emerged from the negotiations represents a hardened position compared to the whatever-it-takes solidarity promised to the war-torn nation, whose agricultural exports bring an essential stream of revenue.

The extension of the special regime will feature a larger number of safeguards on products deemed "sensitive": poultry, eggs, sugar, oats, maize, groats and honey, which will be subject to tariffs if their flows exceed the average volumes of the past three years.

The deal will also make it easier for member states to apply "remedial measures" in case of market turmoil, a vague term that opens the door for bans on a national basis.

Altogether, it is estimated the tweaks will make Kyiv lose about €330 million per year.

The beefed-up provisions come amid farmer protests across Europe, some of whom have accused their Ukrainian counterparts of unfair competition. Although the opposition to low-cost Ukrainian imports initially came from neighbouring countries in Eastern Europe, namely Poland, Hungary and Slovakia, it gradually spread to France, which moved from an expansive to a restrictive position on the debate.

Italy and Austria also shifted their stance towards the Polish camp, further complicating the arithmetic. On the other side of the room, Germany, the Netherlands and the Baltic states, among others, resisted the tightening.

The responsibility to break the impasse fell on Belgium, the current holder of the Council's rotating presidency. Belgium submitted a new compromise text on Wednesday morning, which paved the way for the approval later on the day.

"Ambassadors agreed on a new compromise to extend trade measures (ATM) for Ukraine, securing a balanced approach between support for Ukraine and protection of EU agricultural markets," the presidency announced on social media.
It added the text would be presented to the European Parliament for a "swift" resolution.

A never-ending dispute

Ukraine has historically been one of the world's leading exporters of commodities like sunflower oil, barley, maize and wheat. Russia's all-out war and subsequent blockade of the Black Sea severely hindered the country's ability to ship out its goods, do business and access foreign currency.

In June 2022, the EU lifted all remaining tariffs and quotas on Ukrainian imports to ease the transit via land routes and ensure consistent revenue. But the special regime led to a surge in Ukrainian cereals across neighbouring countries, triggering protests from local farmers, who said the low-cost grain was bringing down prices and filling up storage.

The dispute reached a boiling point in April 2023, when Poland, Hungary and Slovakia slapped overnight bans on a range of agricultural products coming from Ukraine. Romania and Bulgaria quickly warned they would follow suit.

Caught off guard, the Commission struck back, denouncing the prohibitions as unacceptable, unlawful and contrary to the bloc's spirit of solidarity. A group of 12 countries, including Germany, France, the Netherlands, Belgium and Austria, said in a joint letter that the single market's integrity was in danger.

The standoff played out for months and saw multiple attempts to resolve the situation through diplomacy and a lawsuit before the World Trade Organization (WTO).

As of today, Poland, Hungary and Slovakia maintain their bans.

Source:Euro News