EU to set stricter rules on Ukraine tariff-free trade extension

The European Union moved closer to extending its tariff-free trade with Ukraine, while tightening rules on food imports to placate protesting farmers’ concerns about oversupply.

The European Parliament’s committee on international trade voted Tuesday to support the hard-fought provisional agreement reached by the bloc’s 27 member states the previous day. The proposed one-year extension suspending duties and quotas will reinstate tariffs if supply of certain products exceeds a set threshold — but the safeguards don’t include potential restrictions on wheat despite demands from France, Poland and Hungary.

Extending the so-called autonomous trade measures — which still need to be approved by a European Parliament vote at the end of April — would allow Kyiv to keep almost unfettered access to the EU market until June 2025. The trade accord, along with concerns over rising production and administrative costs, has been the focus of farmer protests across Europe, most recently in Poland and Belgium.

The tightened provision will cover a wider range of products including poultry, eggs, sugar, oats, corn and honey, with tariffs re-imposed if imports surpass the average volumes of a reference period that’s been extended to the second half of 2021 — before Russia’s invasion — through to the end of 2023. This deal potentially cuts the tariff-free benefit for Ukraine by €330 million ($359 million) to €1.8 billion.

The European Commission may also impose measures it deems necessary in case of a significant disruption to one or more of its member states due to Ukrainian imports. The EU executive will step up monitoring grain imports, especially wheat.

Ukraine’s Agriculture Minister Mykola Solskyi said last month in Brussels that the grain debate is more political and less of a trade issue.