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BRUSSELS – Ukrainian grain will continue to enter the European Union tariff-free for another year despite protests from neighbors such as Poland, which sees its own farmers hurt by the influx of cheaper food.
A meeting of EU ambassadors in Brussels on Friday agreed to extend the tariff-free access implemented last year, but with some concessions for EU neighbors Ukraine affected by the grain glut. Agreement announced by Sweden, who is currently chairing the meeting. The European Parliament will give formal approval next month.
The EU tariff hike was initially seen as an emergency measure to create a cheap and safe land route for vital grain supplies out of Ukraine and ease the global food crisis triggered by Russia’s blockade of Ukraine’s Black Sea ports. With Ukraine being one of the world’s largest exporters of grains, the inability to produce large volumes at sea threatens to overwhelm the global food supply and cut Kyiv’s main source of income during a Russian invasion.
The United Nations and Turkey struck a deal with Ukraine and Russia that allows ships to transport grain from Odesa and other Ukrainian ports under close supervision, but the mechanism must be renewed every three months, and Russia said this week it was considering pulling out. from that.
Lifting EU tariffs on Ukrainian wheat enabled shipments to neighboring countries such as Poland and Hungary by road. But the policy, however well-intentioned, backfired for the EU’s closest neighbor, Ukraine. Tons of Ukrainian grain, which is cheaper than the EU equivalent, flooded neighboring markets and, instead of traveling, was stored in warehouses, causing prices in the country to collapse.
The pain was immediately felt in Poland and other countries, where the pro-Ukraine government faced protests from farmers, an important political constituency. In recent weeks, Bulgaria, Hungary, Poland and Slovakia have imposed unilateral bans on Ukrainian food imports in an attempt to address the problem, much to the dismay of officials in Kyiv and Brussels.
The move by Poland – whose government is the EU’s strongest ally in Ukraine but also faces elections later this year – to back a ban on one of the bloc’s most important pro-Ukraine policies represents an unintended consequence of lifting tariffs, which threatens will disrupt the bloc’s unity front in Ukraine.
On Friday, the four countries that banned Ukrainian wheat, and Romania, won some concessions from the European Union to agree to an extension of the tariff-free policy, EU diplomats familiar with the talks said on Friday after a meeting. ambassador in Brussels.
Under the agreement, diplomats said, some types of Ukrainian grains – among them wheat and sunflower seeds – would only be allowed to transit through the country on their way to other destinations, not be sold there. Officials hope that this will reduce the effect on farmers in neighboring Ukraine.
The countries will also receive 100 million euros ($110 million) from the EU’s emergency fund that is normally provided to compensate farmers in the event of natural disasters.
The details of the exemption are being finalized and are likely to be adopted in the coming days, diplomats and EU officials said.
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