After the end of the preferential regime, the EU plans to return to the old free trade agreement with Ukraine
1 May 2025 17:23
The European Commission plans to terminate Ukraine’s autonomous trade measures (ATMs or “preferential trade regime”) after June 5, but will ensure a smooth transition to the new system. All the terms of trade liberalization will be included in the free trade agreement between Ukraine and the EU.
This information was provided by European Commission spokesperson Olof Gill during a briefing in Brussels on April 30, "Komersant Ukrainian" reports citing Evropeiska Pravda.
Gill explained that the current trade measures, which eliminate most of the obstacles to Ukrainian exports, will not be completely canceled. Instead, all the details of trade liberalization will be recorded in a deep and comprehensive free trade agreement (DCFTA).
“We intend to ensure a smooth transition to the new regime, where all trade arrangements will be enshrined in the deep and comprehensive free trade agreement we have with Ukraine. Thus, we intend to make a transition that will allow the ATZ to expire, after which all the details of liberalization will be programmed into the DCFTA,” Olof Gill said.
Although the exact date of the start of this process has not been determined, the spokesman assured that the transition will take place in the near future:
“But it will happen soon and it will happen in a structured way so that there is no room for doubt.”
“We are going to ensure that there is no need to roll back. We will put in place a process to ensure that after the expiry of the ATZ, the way we trade with Ukraine on a bilateral basis is fully integrated into our DCFTA,”
– Olof Gill summarized.
Presumably, the official was referring to the new content of the old Deep and Comprehensive Free Trade Agreement between Ukraine and the EU, which has been in force since 2016. It is worth noting that its current provisions are worse than the “preferential trade regime” that is in effect for Ukraine until June 5.
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The preferential trade regime and its enemies
The decision to allow the free import of Ukrainian goods into the EU was made by the EU at the beginning of the full-scale Russian invasion as a gesture of support for the Ukrainian economy, as well as in response to the Russian naval blockade of Ukrainian ports. During the two years of its operation, the simplified regime has gained a lot of opponents in the European Union. In particular, the governments of Bulgaria, Poland, Hungary, Romania, and Slovakia demanded to restrict imports of Ukrainian products (later France joined this position). They claim that cheap agricultural products from Ukraine are swallowing up their markets.
Six major European farmers’ associations also protested strongly against Ukrainian products. Polish farmers have even organized a border blockade, not only with Ukraine but also with Germany.
Nevertheless, after fierce debate, the simplified trade regime with Ukraine was extended until June 5, 2025. However, at the request of these countries, it was severely restricted.
Thus, the provisions on duty-free trade were amended to include new “safeguards” to protect European producers.
In particular, the European Commission may apply any measures it deems necessary if imports from Ukraine cause “significant disturbances” on the EU market or the markets of one or more EU Member States. In such a case, the European Commission may launch an “emergency brake” for particularly sensitive agricultural products. This list includes the following products:
- poultry
- eggs
- sugar
- oats
- cereals
- corn;
- honey.
However, the European Commission has not only options but also responsibilities. If imports of these goods exceed the average import volumes recorded in the second half of 2021 and for the entirety of 2022 and 2023, customs tariffs must be restored within 14 days.
Thus, the EU has practically returned import quotas for many Ukrainian goods, albeit at a rather high level.
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