European Commission reaches trade pact with Ukraine

The future of trade with Ukraine is being paved by updating the Deep and Comprehensive Free Trade Area (DCFTA) agreement, which includes Moldova and Georgia in addition to Ukraine, Euronews reports.

During the first half of the year, Ukraine kept asking the EU for concrete terms, but as Ukrainian grain imports have become a sensitive issue for Polish farmers, it was decided not to negotiate on a theoretical level until the end of the negotiations in May.

A month and a half and an intensive weekend of negotiations later, Commission President Ursula von der Leyen has now announced the trade pact with Ukraine, perhaps the most important element of which is

Ukraine's commitment to reach EU standards for agricultural products, animal welfare and pesticides by 2028.

Ukraine has been under a temporary framework since the Russian invasion in 2022, which gave them duty-free access to all agricultural products in order to alleviate economic pressure on the country. The resulting influx of cheap products, not necessarily of the quality required by the EU, has made the market difficult for farmers in several member states, including France, Poland and Hungary. A recurrent theme of the Hungarian government's political campaign is that Ukrainian grain imports will destroy Hungarian agriculture.

To mitigate this, the EU has already introduced quotas, but these would now be adjusted to ensure that they are sustainable and beneficial to both sides in the long term. The adoption of the draft will of course also require approval by the European Council of Heads of Government.

The full details of the new proposal are not yet known, but it will of course put Ukraine on a much more restrictive trade framework than the tariff-free regime that expires at the beginning of June. Agriculture commissioner Christophe Hansen said

the aim was to strike the right balance between supporting Ukraine's trade with the EU and the sensitivity of the EU's agricultural sectors.

In addition to the 2028 commitments, the agreement would include a number of safeguard mechanisms to protect the EU's internal market against the volume and pricing of imports. For sensitive products such as eggs, sugar and wheat, quotas would be increased but kept below historic trade volumes, while quotas for less sensitive items could be lowered towards these.

In addition, certain dairy products, mushrooms and grape juice, for example, would not be subject to any quantitative restrictions. In return, Ukraine would significantly increase import quotas on pork, poultry and sugar from the EU, while reducing or eliminating tariffs on some other products not yet notified.

Beyond the technical implementation and details of the agreement, the next step will be for the Commission to present the draft to nation states and the European Parliament, which is expected to face little opposition.

Trade Commissioner Maroš Šefčovič said he was confident of the support of member states and that the agreement could be an excellent basis for Ukraine's future accession. He said its implementation would bring “much needed stability and predictability” to trade relations between the two sides.

Cover photo (for illustration purposes only): EU