Agriculture, Latest news, Safeguards, Ukraine

Ukraine: Central European countries force EU into adopting import safeguard

European Commission president Ursula von der Leyen told the countries that had imposed import bans on Ukrainian agricultural products over recent days that an emergency import brake is on offer to ensure that only goods from Ukraine destined for other EU countries or outside Europe can enter the bloc.

In a letter addressed to the governments of Poland, Hungary and Slovakia, von der Leyen said that her institution would also consider launching a longer investigation into whether to take preventive measures covering imports of other sensitive products.

But in return the countries in question would have to withdraw their import bans.

On Monday (17 April) a commission spokeswoman had said that trade policy “is an EU exclusive competence and, therefore, unilateral actions are not acceptable”.

On Tuesday Warsaw reached an agreement with Kyiv to allow Ukrainian products to flow through Poland and onward towards export destinations, most of which lie outside Europe. But the ban on products destined to remain in the country is still in place.

“We have managed to set up mechanisms that will mean that not even a tonne of grain remains in Poland. The goods will transit through Poland,” Poland’s agriculture minister Robert Telus said.

At the time of writing Hungary and Slovakia still have bans in place, whilst Bulgaria and Romania are said to be considering similar measures.

CEE countries deplore oversupply due to import duty suspensions for Ukraine

The commission formally proposed in February to extend the current one-year suspension of all the EU’s import duties from Ukraine by one year in the wake of Russia’s war on the country.

The suspension covers a narrow set of products, mostly agricultural commodities, currently subject to tariffs or tariff rate quotas under the EU-Ukraine Deep and Comprehensive Free Trade Area which has been in force since 1 September 2017.

But according to the governments affected, this has resulted in a glut on their domestic markets that drives down prices and threatens farmers’ livelihoods.

The issue is further complicated by the fact that the current Polish government is facing elections at the end of 2023 and that farmers are the ruling party’s traditional allies.

Safeguard clause

A senior EU official said today that the EU executive is considering taking action based on a dedicated safeguard clause included in the EU’s 2022 regulation that offers temporary trade-liberalisation measures supplementing trade concessions applicable to Ukrainian products under the EU-Ukraine Association Agreement.

Article 4 of the regulation states that “(w)here exceptional circumstances requiring immediate action make an investigation impossible, the Commission may, after informing the customs code committee…, take any preventive measure which is necessary”.

The same official said that this measure would not result in additional customs duties on Ukrainian imports.

Rather, such a measure would ensure that only imports which are destined for other EU countries or countries outside the bloc are able to enter the EU.

Such an emergency measure would cover wheat, maize, rapeseed, and sunflower seeds and would likely last until June, the official said.

In line with this emergency safeguard procedure, the commission would not require approval from the council of EU member states.

Once the emergency safeguard measures are in place, the countries in question would need to withdraw their import bans, the commission insists.

In addition, the commission is looking at introducing safeguard measures under its standard trade remedies legislation.

In contrast to the emergency safeguard under the EU’s duty suspension scheme, the standard safeguard can often take around six months to introduce and requires the EU executive to carry out a full ex-ante investigation.

The EU commissioner for trade Valdis Dombrovskis is meeting the trade ministers of Bulgaria, Hungary, Poland, Romania, and Slovakia, as well as Ukraine, this afternoon to “discuss these lines of actions and proposals”, according to the commission.

Ukraine feels abandoned, CEE countries face criticisms

The President of the Kyiv School of Economic and former Ukrainian economy ministry Tymofiy Mylovanov was critical of the commission’s slow response to the countries’ bans.

“The EU has taken a back seat,” he wrote in a tweet last night (18 April). “(T)he [Ukrainian] govt had to go and negotiate.”

“It’s very unfair to Ukrainians because we already suffer the war. But no one ever promised fairness.”

Inma Rodríguez-Piñero, an MEP from the centre left S&D and a prominent member of the European Parliament’s international trade committee, criticised the Polish import ban.

“The inflows of Ukrainian agricultural products have caused some market disturbances in some member states,” she said.

“But instead of tackling them in coordination and with the help of EU institutions and other member states, the PiS government has decided once again to breach EU rules and has illegally stopped trade flows to which it agreed almost a year earlier,” said Rodriguez-Piñero.

The European dairy trading community Eucolait also condemned the bans and called on the commission to intervene.

“Unilaterally taken decisions by individual member states only serve to fragment the single market and are particularly disappointing in this special context,” said the association.

It said that when it comes to dairy imports, there is “no disruption to speak of and any measure to restrict trade would lack economic justification”.

“We call on the European Commission to intervene to ensure that the integrity of the EU single market is maintained and to continue supporting Ukraine through the granted preferential treatment,” said Eucolait.

“Disjointed national action creates uncertainty and a climate of mistrust for all operators across the supply chain.”

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