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14 April 2024

News

19.03.2024

Trade liberalisation with the EU is critical for Ukraine's survival and deterring the enemy, - UСAB

This week in Brussels is significant for Ukraine: there will be a new round of discussions regarding EU Regulation on autonomous trade measures (ATM) for Ukraine. Proposed amendments to the Regulation can worsen the economic, financial and social spheres of Ukraine and significantly affect the deterrence of russian aggression.

Since the russian large-scale invasion, the Ukrainian economy has shrunk significantly. The agricultural sector, once a "locomotive", has turned into a "tugboat" of the Ukrainian economy, whose power drops: over the past 3 years, the export of agro-food products from Ukraine has significantly decreased (from 27.7 bln USD in 2021 to 21.9 bln USD in 2023) with a significant increase in its share among the total exports of products (from 40.7% in 2021 to 61% in 2023). These numbers mean only one thing: Ukraine's ability to defend itself and maintain a relatively stable macro-financial situation depends on the agricultural industry.

In June 2022, when the Ukrainian economy was being destroyed by the occupying forces of the russian federation in the east and south of Ukraine, and the Black Sea ports, the usual export channels, were blocked, the European Commission, as a sign of support, liberalised trade with Ukraine through the ATM. In March 2024, in the conditions of significant dependence of the Ukrainian economy on access to the EU market, the European institutions propose to return partial restrictions on the access of Ukrainian agro-food products.

In the end of 2023, European agricultural associations issued appeals and proposals to significantly limit agricultural product import from Ukraine. According to preliminary calculations of UCAB, the level of losses from such proposals would amount to about 5 bln USD. However, besides statements, European agricultural associations have not shared any materials in support of their position that Ukrainian agro-food products have negatively affected the internal EU market.

Against the background of farmers’ protests in EU member states, In January 2024, to protect domestic producers, the European Commission proposed to impose certain restrictions in new ATMs: for sugar, poultry and eggs, which import limit will be set at the level of average arithmetic indicators of imports from Ukraine in 2022/2023. At the same time, prices in the EU for these products remain stably high, and the share of imported Ukrainian products is too small to have a tangible impact on European producers:

  • the share of imported Ukrainian eggs in the EU consumption is less than 1% (example calculation: 1 EU citizen (out of 500 mln people) will consume only 2 imported Ukrainian eggs during the year);
  • the share of imported Ukrainian poultry in the EU consumption is less than 2% (example: 1 EU citizen will consume 4 packs of 6-piece nuggets produced from Ukrainian poultry meat during the year);
  • the share of imported Ukrainian sugar in the EU consumption is less than 3% (example: 1 EU citizen will drink only 44 cups of coffee with 1 spoon of Ukrainian sugar in it during the year).

 

The introduction of restrictions on these three products would be relatively painful and would lead to the loss of foreign exchange earnings by Ukraine for 242 mln Euros.

However, last week, the European parliamentarians returned the document to the European institutions to process additional amendments: a significant expansion of the list of items for grains and their processing products and honey when the reference terms are changed to 2021-2023. According to the preliminary calculations of the UCAB, the adoption of these amendments may lead to the Ukrainian economy's loss of foreign exchange earnings in the amount of almost 1.7 bln Euros.

It is important to emphasize that supporting such proposals can significantly impact deterring russian aggression: from every hard-earned but not received Euro, approximately 25 cents will not reach Ukrainian defenders on the frontline via purchased ammunition or through the provision of financial and other support.

This week, European institutions should adopt an agreed position on new ATMs for Ukraine. Therefore, today, we once again appeal to our European partners to remember that the Ukrainian agricultural sector is a significant support in the struggle of Ukraine and the entire civilised world against russian aggression. The Ukrainian agrisector is doing everything possible to work and restore the country and prevent russian troops from advancing deep into European territory. Considering the above, UCAB calls on European partners to keep preferential access of Ukrainian agro-food products to the EU market as much open as possible, which is vital for our country.




  • Baker TILLY
  • Agroresurs
  • AMAKO
  • Limagrain
  • Zeppelin
  • Amazone
  • LNZ Group
  •  Agricom Group
  • horsch
  • uahk
  • Сygnet
  • Syngenta
  • Agco
  • Agroregion
  • Eridon
  • MHP
  • Maschionet
  • Maisadour
  • DuPont Pioneer
  • Agroscop
  • Agrimatco
  • NCH Advisors
  • Continental farmers Group
  • credit agricole
  • claas
  • john deer
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