EU proposes tariffs, quotas cut on Ukraine goods to aid economy

The European Union has proposed to temporarily remove all remaining tariffs and quota requirements on Ukrainian exports in an effort to bolster the war-torn nation’s economy.

The proposal also includes the temporary removal of existing tariffs and quotas on steel, industrial goods and agricultural products that are currently not covered by the EU’s trade agreement with Ukraine.

“The EU has never before delivered such trade liberalization measures, which are unprecedented in their scale: granting Ukraine zero tariff, zero quota access to the EU market,” EU trade chief Valdis Dombrovskis said in a Wednesday statement. “Since the start of Russia’s aggression, the EU has prioritized the importance of keeping Ukraine’s economy going.”

Ukraine and the EU have had a free trade deal in place since 2016, which eliminated most trade barriers between the two. Under those arrangements, some tariffs and quotas on several categories of goods are due to be phased out over time or are excluded from the agreement. The EU is now proposing to temporarily lift those restrictions. 

The proposal will need to be agreed by all 27 member states and the European Parliament before it comes into force. Earlier this week, the U.K. announced that it would cut tariffs on all goods from Ukraine to zero. 

The EU is Ukraine’s largest trading partner, accounting for more than 40% of its trade in 2019. Total trade between the EU and Ukraine reached 43.3 billion euros ($46 billion) in 2019, with exports to the EU amounting to 19.1 billion euros in 2019, according to data published by the commission on its website. 

Iron, steel and agricultural products are among the country’s main exports. Ukraine’s economy will shrink more than 40% because of the war, according to the World Bank, with trade flows particularly damaged due to Russia blocking the country’s ports.