EU-Ukraine trade deal extended but amended

European Union negotiators have agreed how trade between the EU and Ukraine should be changed, after massive pressure from the bloc's agricultural industry.

When Russia began full-scale hostilities against Ukraine in February 2022, the EU stopped taxing the vast majority of Ukrainian agricultural imports to help support Kyiv's economy.

But that incensed the EU's agricultural industry, which claims cheap imports from Ukraine are undercutting the price they can get for their goods.

The new proposal, which will be voted on in April, puts a cap on how much poultry, eggs, sugar, oats, maize and groats can be imported into the EU from Ukraine until June 2025.

If the import volumes of those listed agricultural products is greater than the average from the past two years, tariffs will be re-imposed.

But the proposal didn't go as far as France and Poland would have liked. Both countries would have added Ukrainian wheat to that list.

Paris and Warsaw also lobbied to change the reference period for the cap back to 2021 instead of 2022. Such a change would have cost it around 1.2 billion euros ($1.3bn), as the cap would be set at much lower volumes if averages from 2021 were used instead of 2022. But that proposal from France and Poland was knocked down.

Opposition from the agricultural industry, particularly in Poland, pressured lawmakers and negotiators into amending the deal which is due to renew in June.

Polish farmers blockaded checkpoints with its war-torn neighbor, while their Belgian counterparts drove tractors into the center of Brussels.

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There is evidence Ukraine's agricultural imports are not what's driving prices down and that other factors are more important.

The European Commission's January report on agricultural imports in 2023 showed Ukrainian imports were so small that year as to be insufficient to explain the drop in price.

The Polish Institute of Public Finance came to the same conclusion, along with the Ukrainian Agribusiness Club.

Regardless, European lawmakers are keen to be seen responding to European farmer's concerns. They will have an eye on European Parliament elections in June. 

Ukrainian Prime Minister Denys Shmyhal welcomed the interim deal as "good news" on Wednesday, saying it would allow Ukraine to support its producers and maintain its export levels.

MEPs could still reject this latest proposal - or demand changes - when they have the chance to vote on it next month.

Separately to this proposal, UK media reported earlier in the week that the European Commission is considering creating a tariff for the import of cereals from Russia, although volumes from there to the EU are even less significant.

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