EU may change terms of preferential trade with Ukraine

The European Commission is considering changing the terms of the preferential trade regime with Ukraine, which expires in June 2025.

According to the Polish publication RMF24, the European Commission does not plan to extend the current regime in its current form and has already started technical negotiations with Kyiv on new terms.

As a reminder, the current preferential regime was introduced in 2022 to support the Ukrainian economy, which has significantly increased exports from Ukraine to the EU.

At the same time, the publication notes that the European Commission is not considering a return to the trade conditions that were in place before the outbreak of a full-scale war in order to avoid economic losses for Ukraine.

Alternatively, the possibility of integrating trade within the framework of the Deep and Comprehensive Free Trade Area (DCFTA) is being discussed. This format envisages the introduction of quotas for certain types of agricultural products and additional safeguard mechanisms. It will also facilitate Ukraine's gradual integration into the EU single market and prepare for future membership.

«Most agriculture ministers are in favour of a more stable DCFTA agreement than the continuation of the current regime. The preference is to move towards a DCFTA that will define new export and import volumes», said European Commissioner for Agriculture Christof Hansen.

He notes that negotiations with Ukraine have so far begun at the technical level, and the main discussions should begin in the near future.

Sources in the European Commission predict that further trade measures to support Ukraine will be less ambitious. This is attributed to the change in the European Commission's leadership, in particular the arrival of the new European Commissioner for Trade Maroš Šefčovič, whose position is closer to that of Poland and other countries that have reservations about agricultural imports from Ukraine.

«I think that this time the measures to support Ukraine will be reduced. Quotas for Ukrainian agricultural products will be lower than they are now», the source in the European Commission is sure.

At the same time, the publication notes that the issue is very sensitive. On the one hand, European institutions are keen to support Ukraine in times of war, but on the other hand, they are wary of protests from European farmers who fear competition from Ukrainian products.

As a reminder, Ukraine has received the first tranche of three billion euros as part of a loan from the «G7», which will be covered by frozen Russian assets.

Earlier it was reported that the European Commission decided not to extend the restrictions on imports of Ukrainian agricultural products after 15 September 2023.