Border States Demand Changes to Ukraine Trade Deal

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A temporary trade liberalization arrangement between the European Union and Ukraine is nearing its end, prompting discussions for a new trade framework under the EU-Ukraine Association Agreement. Some EU border nations are advocating for stricter regulations on Ukrainian agricultural imports to address market disruptions and unfair competition for local farmers. Ukraine aims to uphold favorable trade conditions with the EU to prevent significant economic losses if current trade patterns are disrupted.

Since June 2022, the European Union has granted Ukraine comprehensive trade liberalization support to assist the country’s post-war economic recovery. These measures, known as Autonomous Trade Measures (ATMs), which include the suspension of import duties and quotas, have shown positive effects for Kyiv. In 2024, Ukrainian exports to the EU surged to nearly 60% of total exports, up from 39.1% in 2021. However, these temporary measures are scheduled to expire on June 5, leading to ongoing negotiations between Brussels and Kyiv on the future trade arrangement.

Discussions are centered on Article 29 of the EU-Ukraine Association Agreement, focusing on potential reciprocal tariff liberalization. Despite efforts to manage the effects of the ATMs, such as limiting certain agricultural imports, concerns remain among farmers in EU border states. These farmers have expressed worries about an oversupply of Ukrainian agricultural goods affecting local prices and storage capacity.

The European Commission is working on a proposal to establish a new trade regime with Ukraine after the expiration of the ATMs. However, challenges lie ahead as various EU member states, particularly frontline border countries, push for adjustments that could impact Ukrainian exports. Ukrainian Prime Minister Denys Shmyhal emphasizes the importance of continued trade liberalization to support Ukraine’s economic recovery and warns of potential losses if a preferential trade deal with the EU is not reached.