EC reaches decision: this is how the influx of Ukrainian products into Hungary will change

As of today, the EU and Ukraine will benefit from an enhanced, stable, fair and permanent trade framework, with the entry into force of the EU-Ukraine Deep and Comprehensive Free Trade Area (DCFTA), the European Commission said in a statement on Wednesday.

The upgraded DCFTA delivers additional, mutually beneficial trade liberalisation, while taking fully into account the sensitivity of certain EU agricultural sectors,

the EU executive said.

Besides illustrating the EU's "unwavering commitment to supporting Ukraine", it also limits EU imports of sensitive agricultural products compared to the levels under the autonomous trade measures (ATMs), enshrines a robust new safeguard clause, and provides for the alignment of Ukrainian and EU production standards.

The DCFTA will support long-term economic certainty and stable trade relations for both parties, whilecontributing to the gradual integration of Ukraine into the EU Single Market.

Both sides have also agreed on exploring measures to help Ukrainian exporters reach their traditional markets in third countries, thus providing additional commercial opportunities for Ukraine and contributing to global food security.

The original DCFTA, which was signed in 2014, abolished the majority of customs duties and gradually opened up the services and public procurement markets. The current amendment aims to replace the crisis management solution with a permanent, reciprocal system of rules. This follows three years of transitional measures after the outbreak of the Russian–Ukrainian war, during which the EU temporarily abolished all customs duties on Ukrainian products.

Following Russia's full-scale invasion of Ukraine, the EU granted Ukraine trade facilitations and exceptional instruments offering a high level of unilateral liberalisation on a yearly basis in the form of ATMs. These were in force from 4 June 2022, and twice renewed until their expiration on 5 June 2025, after which transitional measures came into effect. Together with the Solidarity Lanes, the ATMs were adopted in the context of the major disruptions caused by the war and against the general trend of a decrease of Ukraine's trade overall.

The Commission consistently aimed to agree on longer term reciprocal tariff liberalisation with Ukraine, ensuring a seamless transition to a new framework in which all trade arrangements are integrated into the DCFTA regime.

What is this about?

During a background discussion attended by Portfolio, EU officials stated that the updated DCFTA is founded on three key pillars.

The first issue is the re-regulation of trade access, where the aim was to maintain a 'delicate balance'

while Ukraine's export opportunities are not shrinking drastically, the EU is trying to protect its own farmers from sudden market shocks.

Only moderate quota increases were allowed for sensitive products such as sugar, poultry, eggs, wheat, maize, and honey, i.e. levels well below the export volumes seen during the war years. In contrast, for less sensitive products such as butter, milk powder and barley products, the parties used previous years' trade volumes as a basis for the new quota system.

The full liberalisation of some minor items, such as fermented milk, grape juice and canned mushrooms, has been completed.

Experts from the European Commission emphasised that the agreement is not one-sided. Ukraine will also make its market more accessible to EU exports, including poultry, dairy products and certain processed foods.

This means that the current agreement benefits Ukrainian exporters and opens up new sales channels for the European food industry in Kyiv.

The second pillar involves the gradual harmonisation of Ukrainian production rules with EU regulations. Brussels emphasised that the new agreement does not affect EU food safety rules.

Only Ukrainian products that comply with all applicable EU regulations — including those relating to pesticide residue limits and animal health conditions — will be permitted to enter the EU market.

However, the new regulations go further than this, bringing production methods closer to EU standards. This affects areas such as animal welfare, environmental requirements and the authorisation of substances used in agricultural technologies. The Ukrainian government is committed to fully adopting these rules by 2028.

Brussels may withdraw the market concessions currently granted if Ukraine fails to comply.

According to EU sources, this regulatory convergence addresses the concerns of Central European farmers, including those in Hungary, who have claimed in recent years that Ukrainian producers can operate at lower costs due to less stringent environmental and animal welfare requirements. In this regard, the Commission emphasised that creating a 'level playing field' was one of its most important goals. The new system stipulates that if Ukraine does not make sufficient progress in regulatory convergence, the Commission may suspend the preferential quotas.

The third element is the safeguard clause, which enables either party to implement temporary measures if a sudden surge in imports causes significant market disruption. This is a significant innovation in EU practice.

This mechanism can be activated not only at EU level, but also by individual Member States if their own market is distorted.

The introduction of the system was justified by the fact that, in the early years of the war, several Eastern European member states, including Poland, Hungary and Slovakia, had complained of serious market difficulties due to the influx of Ukrainian grain.

However, according to Commission experts, the situation has changed significantly since then. While the Russian navy effectively blockaded Ukrainian Black Sea ports in 2022 and 2023, 6–7 million tonnes of grain are now leaving Ukraine by sea every month. This means that land transport routes within the EU, including those at the Polish and Slovakian borders, are no longer as congested as they were previously.

According to the European Commission, grain imports currently focus mainly on corn, sunflower seeds and rapeseed. These are already exempt from customs duties, so the new agreement will not put significant pressure on local markets.

During the background discussion, Commission experts explained that Ukrainian products of inadequate quality cannot enter the EU market, as all imports are checked by the authorities of the Member States, who only clear goods through customs if they comply with the permitted residue levels. Furthermore, Ukraine's legal harmonisation commitments explicitly cover pesticides and animal husbandry standards, with the aim of establishing a fully harmonised regulatory framework on both sides by 2028.

Regarding the proposed compensation mechanism suggested by the Slovak Minister of Agriculture to protect EU farmers, one of the Commission's experts pointed out that there is an EU crisis fund that can provide resources to producers in the event of exceptional market disturbances.

However, this source can only be used if there is a demonstrable and sustained fall in prices or commercial disruption. Experience to date has shown that Ukrainian imports do not meet these conditions.

However, the EU's proposal for the next multiannual financial framework (the EU's budget cycle) includes doubling the budget to around €6 billion.

The agreement that has now come into force ends the period of temporary wartime crisis measures, regulating EU-Ukraine trade on a permanent, reciprocal basis. This clearly strengthens the long-term integration process, as the gradual harmonisation of production standards and market opening will provide Ukrainian exporters with more secure access to the EU market, while creating a more predictable and controlled trading environment for EU consumers and farmers.

Cover image (for illustration purposes only): Getty Images