Iron and steel: EU wants to keep preferential trade regime where it benefits
5 May 2025 12:43
on May 8, the European Parliament will vote on the introduction of a special preferential regime for steel and iron exports from Ukraine, "Komersant Ukrainian" reports, citing Evropeiska Pravda.
This vote will be crucial, as the general autonomous trade preferences for Ukrainian exports to the European Union, known as “trade visa-free regime” or “preferential trade regime”, expire on June 6, 2025.
According to the draft legislative resolution of the European Parliament, it is proposed to suspend certain provisions of Regulation (EU) 2015/478 on the import of Ukrainian products into the EU.
The European Commission’s explanatory note to the document emphasizes that Ukraine, despite the destruction and occupation of a significant part of its production facilities as a result of the war, remains a major exporter of iron and steel. That is why, according to the European Commission, it is necessary to maintain the suspension of Regulation (EU) 2015/478 on common rules for imports. This suspension will remain the legal basis for the suspension of existing EU safeguard measures on imports of steel products from Ukraine as part of the EU’s support.
It is worth noting that Ukraine, despite the war, remains a major exporter of a number of other goods, but the EU has decided not to support Ukraine in these areas.
The European Commission nevertheless emphasizes the importance of making the necessary decision in a timely manner: in order to ensure the continuity of trade liberalization measures after the expiration of the current autonomous trade preferences on June 5, 2025, it is necessary that the proposed Regulation enter into force on June 6, 2025.
The preferential treatment for Ukrainian iron and steel is proposed to be introduced for a three-year period.
In case of a successful vote in the European Parliament on May 8, the next step will be the approval of the legislative resolution by the EU Council, after which the document will enter into force after its official publication.
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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 and 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 effectively reintroduced quotas on imports of many Ukrainian goods, albeit at a rather high level.
on June 5, however, this regime will end. The European Commission plans to return to the previous free trade zone with Ukraine, which imposes much more restrictions on this trade. However, the EU promises that the new trade parameters will be better than those that were in effect until 2022.
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