FT: EU wants to introduce higher tariffs on Ukrainian imports

The Financial Times, citing informed sources, has reported that the European Union may impose significantly higher tariffs on Ukrainian imports in a matter of weeks.

Source: Financial Times

Details: The sources indicated that the decision to impose higher tariffs on Ukrainian imports was linked to plans to end the special duty-free regime introduced in 2022 after Russia's full-scale invasion of Ukraine.

According to the sources, this decision was made after Poland initiated the protection of EU farmers.

The EU has a free trade agreement with Ukraine, but after Russia launched its invasion in 2022, it temporarily suspended the remaining duties. These agreements expire on 6 June 2025, and the EU plans to replace them with what are known as transitional measures while the parties update their overall trade agreement.

However, informed diplomats said that the transitional measures proposal recently presented to EU member states would be significantly reduced, including quotas for duty-free imports of agricultural products that are critical for Ukrainian farmers and the budget.

When duty-free trade was introduced in 2022, it applied to Ukrainian products – poultry, wheat and sugar, most of which were transported via EU countries to Africa and Asia.

However, farmers and politicians in Poland, France and other EU countries soon blamed Ukrainian exports for driving down domestic prices, and the issue has become dominant in Polish politics.

The diplomats said that on the eve of the presidential elections, Warsaw asked the European Commission to postpone trade negotiations with Kyiv in order to reduce the chances of victory for the nationalist opposition candidate Karol Nawrocki.

A European Commission representative confirmed to the Financial Times that the agreements would not be resumed, as they were currently working on a review of the free trade agreement between the EU and Ukraine.

"The Commission is also looking into possible transitional measures in case the negotiations are not finalised and applied by 6 June," the representative added. 

Two EU diplomats reported that the European Commission's transitional measures include the division of the annual duty-free quota into 12 monthly parts in order to reduce imports during the negotiation period.

They said maize, sugar, honey and poultry would be the most affected. The annual maize quota will be cut from 4.7 million tonnes to 650,000 tonnes. The poultry quota will be reduced from 57,100 tonnes to 40,000 tonnes, and sugar from 109,000 tonnes to 40,700 tonnes.

Bernd Lange, chair of the European Parliament's Trade Committee, believes that this is "a really bad signal for Ukraine".

Background:

• Back in late April, European Pravda reported that the European Commission did not plan to extend the autonomous trade measures for Ukraine (trade visa-free regime), which are in effect until 5 June.
• However, it is planned to ensure a smooth transition to the new scheme, where all trade liberalisation conditions will be enshrined in a free trade agreement between Ukraine and the EU.
• On 8 May, the European Parliament voted in favour of introducing a preferential export regime for steel and iron from Ukraine after the general autonomous trade preferences for Ukrainian exports to the EU expire on 6 June 2025.

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