The rift over tariff-free imports of Ukrainian grain has acquired a new dimension after the European Commission decried as unacceptable the bans imposed by Poland and Hungary over the weekend.
The two countries have repeatedly complained about the influx of Ukrainian grain, arguing the massive arrival of produce is distorting the market and depressing prices for local producers.
“We are aware of Poland and Hungary’s announcements regarding the ban on imports of grain and other agricultural products from Ukraine. We are requesting further information from the relevant authorities to be able to assess the measures,” a spokesperson of the European Commission said.
In this context, it is important to underline that trade policy is of EU exclusive competence and, therefore, unilateral actions are not acceptable. In such challenging times, it is crucial to coordinate and align all decisions within the EU.”
Ukraine is a global leader in the export of maize, wheat, sunflower, barley and other foodstuffs, which provide a lifeline to many developing countries across the world.
But these flows have been severely imperiled by Russia’s invasion, forcing the United Nations and Turkey to act as mediators and broker the so-called Black Sea Grain Initiative.
The initiative provides the guarantee that Russia will not attack ships that carry exports of commercial food and fertilisers from three Ukrainian ports – Odesa, Chornomorsk and Yuzhny/Pivdennyi.
Although fragile, the deal has been renewed several times and has so far resulted in exports of over 23 million tonnes of grain and other foodstuffs, according to EU estimates.
Almost half of the cargo was maize, which needed to be moved out of Ukraine in order to make space for the summer harvest.
In parallel, the EU decided to suspend duties and quotas on all Ukrainian exports destined to the bloc, including agricultural goods, in a bid to help the war-torn cope with the economic fallout from Russia’s war and facilitate trade for Ukrainian farmers.
The suspension is meant to last until June this year but the Commission has proposed a one-year extension until June 2024.
Both programmes – the Black Sea deal and the EU’s solidarity lanes – have worked to lower international commodity prices: World Bank figures show maize at $394.8 per metric tonne in February, compared to its May 2022 peak of $522.29.
This trend, however, has been met with fierce criticism in Poland, Hungary, Slovakia, Romania and Bulgaria. They complain that “unprecedented levels” of tariff-free grain are being stockpiled inside their countries and lowering prices for local producers.
“If market distortions causing damage to farmers in our countries cannot be eliminated by other means, we ask the Commission to put in place appropriate procedures to reintroduce tariffs and quotas on imports from Ukraine,” the leaders of the five member states said in a joint letter addressed to European Commission President Ursula von der Leyen.
The Polish government, one of Ukraine’s staunchest supporters, has led calls against the surplus of cheap grain, urging Brussels to take action, step up assistance through EU funds and ensure Ukrainian imports end up in African and Middle Eastern countries rather than inside the bloc.
In the face of growing anger from farmers, who fear financial and job losses, Polish Agriculture Minister Henryk Kowalczyk resigned from his post earlier this month, a decision that coincided with a state visit from Ukrainian President Volodymyr Zelenskyy.
Speaking of a “moment of crisis,” the leader of Poland’s governing party, Jarosław Kaczyński, announced on Saturday a decision to temporarily prohibit the import of grain and other foodstuffs, such as sugar, eggs, meat and milk, that come from Ukraine.
Kaczyński added the government was prepared to discuss the issue with the Kyiv authorities, who deplored the move as “drastic and unilateral.”
Hungary followed suit and joined the ban later on Saturday, although without specifying the blacklisted products.
Both Warsaw and Budapest said their bans will remain in force until 30 June, when the suspension of tariffs is set to expire.
In its legislative proposal to extend the tariff-free programme for Ukrainian imports, the European Commission added an “expedited safeguard” that can reintroduce duties on products that “adversely affect” the European market.
( Source Euronews)
