Ukrainian Agribusiness Club calls on EU to extend trade preferences for Ukrainian agricultural products

MOSCOW. March 20 (Interfax) - The Ukrainian Agribusiness Club (UCAB) has called on Ukraine's European partners to extend tariff-free access to the EU market for Ukrainian agricultural products during their next meeting on the EU Regulation on autonomous trade measures (ATM) for Ukraine, Ukrainian media said, citing the UCAB press service.

This week in Brussels is critical to Ukraine, as there will be a new round of discussions on the text of the EU's possible Regulation on ATM for Ukraine, the association said. Support for the new proposals to the regulation may worsen the economic, financial and social situation in Ukraine.

"Since the start of the crisis, the agricultural sector, once a 'locomotive', has turned into a 'tugboat' of the Ukrainian economy. However, its strength is falling gradually: over the past three years, the export of agro-food products from Ukraine has significantly decreased (from $27.7 billion in 2021 to $21.9 billion in 2023), but there was a considerable increase in their share among Ukraine's overall exports (from 40.7% in 2021 to 61% in 2023)," UCAB said.

These figures prove that Ukraine is able to maintain a relatively stable macrofinancial situation only due to its agricultural sector, it said.

In June 2022, The European Commission liberalized trade with Ukraine as much as it could, UCAB said. However, in March 2024 European institutions propose reinstating partial restrictions on access to the EU market for Ukrainian farm produce, even though the Ukrainian economy is now heavily dependent on access to the EU market.

European agricultural associations have been insisting since late 2023 on the need to significantly limit agricultural imports from Ukraine. According to UCAB's tentative estimates, Ukraine could lose around $5 billion as a result of such proposals. Apart from making statements, European agricultural associations have not yet shared any materials in support of their position that Ukrainian agricultural imports negatively affect the EU's internal market.

In January 2024, the European Commission proposed amending the new EU Regulation on ATMs for Ukraine by envisaging certain safeguards to protect EU producers. Specifically, there will be an "emergency brake" for sugar, poultry and egg from Ukraine if the limit set at the average of 2022 and 2023 imports is exceeded, UCAB said.

Prices for "sensitive products" in the EU remain stably high, while the amount of Ukrainian imports has no real impact on European producers, it said.

UCAB also offered data on the import of Ukrainian "sensitive products" to the EU. It shows that imported Ukrainian eggs account for less than 1% of the EU market. Thus, one EU citizen may consume two imported Ukrainian eggs over a year.

Meanwhile, Ukrainian sugar accounts for less than 3% of the EU market, i.e. one EU citizen may consume 44 cups of coffee with one spoon of Ukrainian sugar over a year.

"Imposing limits on these three products would be relatively painful and would cause Ukraine to lose 242 million euros in export revenues," UCAB said.

Ukraine may lose around 1.7 billion euros in export revenues if the proposed amendments to the EU Regulation are supported, it said.