The EU plans to ban the export of grain from Ukraine: who is lobbying for this decision and how will it affect the accession to the European Union
Ukraine faced the first serious challenge on the way to joining the EU during the full-scale war. Even friendly countries such as Poland are not ready to lose the market for our interests. Therefore, the Poles, and together with them, the Hungarians, banned the export and even the transit of Ukrainian agricultural products. And although the statements, in particular, talked about possible violations of regulations regarding pesticides, the real reason may be ordinary protectionism, UkrAgroConsult reports with reference to OBOZREVATEL.
The European Commission has already estimated that farmers in Poland, Hungary, Romania, Bulgaria and Slovakia lost about 417 million euros due to the influx of cheap Ukrainian grain. And now, one by one, these countries are depriving Ukraine of the opportunity to sell its products on their territories. This violates EU policy, and also demonstrates the future problems that Ukrainian diplomacy will have to solve on the way to European integration. Not every country will be happy to welcome a large producer of agricultural products to the Union.
Individual countries of the European Union do not have the right to make decisions on trade restrictions – this is the authority of the European Commission, which develops proposals and approves them in the EU. Poland and Hungary violated these rules, they banned both export and transit by their own decisions.
“If their market was badly affected by our products, then there should have been an investigation at the EU level, they could have taken temporary decisions to protect the market, in particular quotas. But this cannot be done by the government of any EU country, it should be a decision at the level of the entire European Union. This 27 countries, not five or one,” Veronika Movchan, head of the Center for Economic Research, tells OBOZREVATEL.
Yurii Gaidai, the senior economist of the Central Economic Commission for Economic Cooperation and Development, is also convinced that such decisions by Poland and Hungary violate the Treaty on the Functioning of the EU, the EU’s Free Trade Agreement with Ukraine, and the Association Agreement. At first, the European Commission agreed that there should be a single position, but then they still succumbed to the influence of five of their members.
“We will apply preventive measures in accordance with the current trade rules for certain categories of grain. This applies, in particular, to wheat, corn, sunflower and rape… We are launching an investigation into other sensitive products,” the director of political communications said at a briefing in Brussels Dana Spinant of the European Commission.
That is, in fact, first Poland and Hungary violated the rules and introduced restrictions, and only then the European Commission began to legalize such restrictions. They will also be allocated an additional 100 million euros in order to compensate for the losses of farmers.
The director of economic programs of the Razumkov Center, Vasyl Yurchyshyn, in his comments to OBOZREVATEL, also pointed out another problem that the mentioned countries talk about – the apparently poor quality of Ukrainian grain. “To a large extent, the issue lies in the production capacities. We need to get closer to the standards faster, introduce control in order to use the EU standards,” he said.
However, Veronika Movchan is sure: if Ukrainian grain did not meet the quality requirements, Ukraine would not be able to export it for years. Violations are indeed possible, but in individual parties. It is almost impossible to systematically violate the requirements of the EU, to sell grain under false documents (certifying quality). Otherwise, there would simply be no export of grain from Ukraine to the European Union.
“A lot depends on what will happen with the grain agreement. Now most of the grain is exported by sea. If you look at January-March figures, 75% is exported by sea. These five countries exported $130 million worth of grain, which means we can lose such amount. However, a partial reorientation will take place,” says Movchan.
Yurchyshyn is sure that although such decisions have a negative impact on the economy, especially in a situation where our foreign exchange earnings depend on grain exports, it will be possible to reach agreements on the opening of transit through Poland and Hungary.
“We have strong and good relations with Poland, although it has introduced restrictions. I believe that in the near future there will be negotiations that will make it possible to resolve the situation. It may be about the opening of transit,” explained Yurchyshyn.
In the future, the situation should be studied not by economists, but by lawyers. Within the framework of agreements on the Free Trade Area (FTA), Association with the EU, Ukraine has not only obligations, but also rights. Therefore, there is an opportunity to defend the right to sell products on the European Union market. EU countries can indeed unilaterally decide to quickly ban exports, but only if there is a threat to their national security. Whether Ukrainian grain can really threaten Poland’s national security is an open question.
And simply stating that there are pesticides in grain is not a sufficient argument. The grain is inspected, and during the year there were negotiations on how to speed up the inspection. If an individual party does not meet the standards, it should not have entered the territory of Poland or Hungary at all. But if it did, it is not a sufficient reason to block all exports.
“Poland can be reminded of how farmers in Germany, Denmark, and other Western European countries were dissatisfied during their accession to the EU,” says Movchan. It is far from economically beneficial for all countries for Ukraine to become a full member of the European Union. The decision regarding the export of Ukrainian grain should prompt Ukrainian diplomats to seek compromises and convince European politicians to take, in particular, unfavorable steps for their own economy.
Meanwhile, Ukrainian farmers will need to look for other sales markets. But the further the product has to be delivered, the higher its price will be and the more difficult it will be to compete with local farmers.
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