In 2024, Ukrainian exports to the EU reached almost 60 percent of total exports, compared to 39.1 percent in 2021. However, the ATMs, which are renewed on an annual basis by a majority vote of EU member states, are set to expire on June 5. They were always intended as temporary measures and could only be extended twice.
Since June 2022, the European Union has granted Ukraine full trade liberalization to help the country’s war-torn economy. These measures – the suspension of import tariffs and quotas – are known as Autonomous Trade Measures (ATMs), and they appear to have brought benefits to Kiev. In 2024, Ukrainian exports to the EU reached almost 60 percent of total exports, compared to 39.1 percent in 2021. However, the ATMs, which are renewed annually by a majority vote of EU member states, are set to expire on June 5. They were always intended to be temporary measures and could only be extended twice.
Negotiations are currently underway between Brussels and Kiev to determine what will replace these measures. The fallback option is to return to the EU-Ukraine Association Agreement, which entered into force in 2017 (and has been provisionally applied since 2016), and includes a free trade component. Current talks are focused on Article 29 of this agreement, which provides a framework for the possibility of mutual liberalization of customs tariffs.
OPPOSITION FROM NEIGHBORHOOD COUNTRIES
But the process is far from over, as time is running out and the effects of the trade measures have not been welcomed across the bloc. Farmers in the EU’s so-called frontline border states, such as Poland, Slovakia, Hungary, Romania and Bulgaria, have long been pressuring their governments to lift the measures. They argue that agricultural goods from Ukraine have overwhelmed local storage capacities and driven down prices for domestic food producers.
On several occasions in 2023 and 2024, these farmers blocked the borders with Ukraine to prevent goods from entering the EU. In response, the European Commission – which oversees EU trade policies – tried several solutions, including redirecting agricultural shipments from Ukraine, diverting them from bordering countries, sending them to other destinations in the EU or to export ports beyond the bloc.
In the end, the EC agreed to restrict the entry of agricultural goods, imposing emergency bans. These bans can be imposed if certain imports exceed the average of imports recorded between 1 July 2021 and 31 December 2024. And over the past year, these bans, also called “emergency brakes”, have been used frequently on Ukrainian exports of oats, eggs, sugar and honey. The EC’s official position is that “we are finalising work on a proposal that will ensure a smooth transition to a new trade regime with Ukraine after the expiry of the ATMs” and that this proposal will be presented to Kiev soon.
HOT POLITICAL ISSUE
The question is: when? Many EU officials in Brussels are concerned that any new proposal could become a hot political issue during the campaign for Poland’s presidential election, which will be held on May 18 and a runoff is likely to be held on June 1. But it is not just the political influence of Polish farmers that must be considered. A joint letter from the agriculture ministers of Bulgaria, Hungary, Romania and Slovakia to the EC, seen by Radio Free Europe, has further increased the pressure.
The letter states that the ministers “strongly believe that the expiry of the trade measures regime should serve as an opportunity to review and recalibrate our trade relations with Ukraine. It is essential to ensure that future trade agreements reflect a balanced approach that accommodates the interests of all parties, without disproportionately harming the economies of neighbouring Member States.” The letter also presents several new proposals, all of which would be to Kiev’s disadvantage.
A TEMPORARY SOLUTION?
While such reforms are necessary for eventual EU membership, it is notable that one of the letter’s signatories, Hungary, is currently blocking Ukraine’s accession process. The ministers also proposed a minimum import price threshold for certain products, which “could play a deterrent role in the import of agricultural goods into EU member states at prices below the cost of domestic agricultural production” – essentially, another trade barrier and a clear move to protect local farmers.
SO, WHAT DOES UKRAINE WANT?
Simply put, more or less the same thing. In a letter to the EC, seen by Radio Free Europe/Radio Liberty, Ukrainian Prime Minister Denys Shmyhal wrote that “without guaranteed, continuous and comprehensive trade liberalization in several industries, Ukraine simply will not be able to rebuild its industries, create jobs and revive its economy. Simply put, Ukraine needs your trade. First to survive, then to thrive.” Shmyhal also warned that failure to reach a trade deal with Brussels would cost Ukraine 3 billion euros a year, leading to a 1 percent drop in Ukraine’s gross domestic product.
While acknowledging that any new agreement would likely be based on the EU-Ukraine Association Agreement, Shmyhal said it should “contain a minimum number of exceptions” and stressed that “we are certainly aware of the concerns of European farmers, but we emphasize that the share of Ukrainian products on the European market remains relatively small. For many product groups, even those considered sensitive, it is less than 1 percent of total EU consumption.”
He also suggested that the safeguard measures imposed in 2024 on some products “should become a starting point for the gradual liberalization of tariffs” on agricultural goods. Given that the June 5 deadline is approaching, Shmyhal also suggested a temporary solution, something that REL has learned could happen. “If it is not possible to reach a solution before June 5, we should find a short-term solution, so that current Ukrainian exports can continue until the Association Agreement is updated,” he said.
“Otherwise, there is a risk that we will have higher tariffs and smaller quantities under the tariff quotas of the pre-war period, and this would cause considerable damage to the Ukrainian economy.”
ZELENSKY HAS THREE “CONDITIONS” FOR THE WEST AGAINST PUTIN
Ukrainian President Volodymyr Zelensky has said that tougher sanctions on Russia, continued support for Ukraine and increased defense cooperation across Europe are very important issues that need to be considered. He wrote on the social network X on Monday that Russian President Vladimir Putin is looking forward to showing off tanks at the May 9 military parade, which marks the anniversary of the victory over Nazism, but according to Zelensky, Putin “needs to think about how to end his war.” The Ukrainian president noted that Monday marked 54 days since Putin ignored the United States’ proposal for a complete ceasefire. According to him, a ceasefire is possible at any moment, “even today.”
“Without increased pressure, Russia will not take real steps toward ending the war. Today is the 54th day that Russia has ignored even the US proposal for a full ceasefire. We believe that a ceasefire is possible at any moment, even as early as today, and should last at least 30 days to give diplomacy a real chance. Putin can’t wait to show off his tanks in the parade, but what he needs to think about is how to end his war. Three things are necessary: tougher sanctions on Russia, continued support for Ukraine, and a significant increase in defense cooperation across Europe. Russia needs to know that Europeans are capable of defending themselves,” he wrote.(RFE)
