18 Sep 2023 14:05

Ukraine to bring WTO action against Poland, Hungary, Slovakia over food trade restrictions - trade rep

MOSCOW. Sept 18 (Interfax) - Ukraine will bring action with the World Trade Organization against Poland, Hungary and Slovakia over their refusal to drop a ban on Ukrainian agricultural products, Ukrainian media quoted Deputy Minister of Economy, Trade Representative of Ukraine Taras Kachka as saying in an interview with Politico.

"It is important to prove that these actions are legally wrong. And that's why we will start legal proceedings tomorrow [September 18]," Kachka said on Sunday, adding that Kiev was preparing to retaliate against Polish fruit and vegetable exports.

Commenting on the unilateral bans by Poland, Hungary and Slovakia on Ukrainian grain following the European Commission's decision to lift the restrictions, Kachka said that "in our eyes these measures of Hungary and Poland is a statement of total distrust to the European Commission."

Kachka said the open defiance against Brussels by Poland, Hungary and Slovakia was not just an internal matter for the EU, but raised what he called "the biggest systemic concern" - whether international trade partners can trust that Brussels speaks for the EU.

"For many years, it's been the European Commission who is the trade negotiator and trade policy institution for the whole EU. And we used to work on this basis," Kachka said. "The systemic approach of Budapest and Warsaw of ignoring the position of the EU institutions in trade policy, I think that will be a problem for the EU in general, because there is no unity there," he said.

Kiev plans to bring action against the countries at the WTO rather than via its own trade agreement with the EU. "I think that all the world should see how member states in the EU behave towards trade partners and their own Union, because it can influence other states as well," he said.

While Slovakia simply extended the EU's previous ban on four types of grain, Poland imposed additional bans on Ukrainian flour and feed over the weekend. Hungary, Kachka said, is going even further and banning an additional 25 products that had not been discussed before, including meat.

"I think that Hungary here is making a political statement that it wants to block trade with Ukraine and as well disregard Brussels completely. And that's why I think that this is a very bold movement against both of us from Budapest," Kachka said.

While Hungary's additional bans are mostly symbolic, given that Ukraine does not export much beef or pork to the country, Poland's measures will affect a significant part of Ukraine's exports, Kachka said. Unless Warsaw drops these additional bans, "we would be forced to retaliate on the additional products, and would prohibit the import of fruit and vegetables from Poland," he said.

The governments in Budapest and Warsaw have said they are acting to protect their farmers from a surge in Ukrainian products that has depressed prices but Kachka said that this reasoning was flawed. "Poland's ban will not help farmers, it will not affect prices, because prices are global - what they are doing is based on public opinion," he said.

An EU official said Brussels hoped to solve the problem by getting Kyiv to impose its own restrictions in the event of sudden surges in exports.

Asked about that potential deal, Kachka said Kiev was ready to "take on the responsibility to ensure that export from Ukraine is not creating any tsunami in neighboring countries," and would impose a system of "real time" export licenses for grains to both "slow down" the exports to neighboring countries and allow Ukraine to "react rapidly" if a surge is detected.

The European Commission banned exports of Ukrainian wheat, corn, rapeseed and sunflower seeds to Bulgaria, Hungary, Poland, Romania and Slovakia on May 2. It was decided on June 5 to extend the ban until September 15.

The EU on September 15 allowed the ban to be lifted after Ukraine promised to take steps to strengthen export controls to neighboring countries. On the same day, Poland, Hungary and Slovakia introduced unilateral bans on imports of Ukrainian agricultural products. In addition to wheat, rapeseed, sunflower and corn, Poland banned imports of rapeseed meal, as well as corn bran, wheat flour and derivatives, and Hungary expanded the list to 25 items.