Position of the Ukrainian Agrarian Community on Trade Arrangements with the EU

KYIV, Ukraine, April 4, 2025 /PRNewswire/ -- The Ukrainian Agribusiness Club (UCAB), together with leading agricultural associations within the Public Union "Ukrainian National Agrarian Forum" (UNAF), which was established to coordinate specialized agricultural associations and form and present a unified position of the agri-food sector of Ukraine on behalf of its members - leading agricultural associations: Agrarian Union of Ukraine, All-Ukrainian Agrarian Council, Poultry Union of Ukraine, Ukrainian Agrarian Confederation, Ukrainian Agribusiness Club, Association of Milk Producers, Association of Pig Breeders of Ukraine and National Association of Sugar Producers of Ukraine, emphasizes the urgent need to resolve the issue of the future trade regime between Ukraine and the EU following the expiration of the current Autonomous Trade Measures (ATM) regime. The Ukrainian agrarian community does not oppose the European Commission's proposal to replace the annual extension of the ATM with bilateral trade agreements for further trade liberalization under Article 29 of the Association Agreement, provided there is sufficient time to negotiate the future trade framework. The relevant position of the Ukrainian agrarian community is available at the provided link.

According to representatives of the Ukrainian agricultural sector, such a decision would contribute to the stability of market access to the EU for Ukrainian producers and ensure predictability for European farmers and processors. The key advantages of this approach include the long-term nature of the agreement, guaranteeing stability for agribusiness; a bilateral format with mutual market access; and a flexible mechanism for gradual liberalization, taking into account sensitive product categories and safeguard measures.

At the same time, Ukraine calls for an accelerated negotiation process regarding the future trade agreement, as the expiration of the current ATM regime on June 5, 2025. Without reaching a new agreement before the ATM's expiry date, the trade regime between Ukraine and the EU would automatically return to the tariffs and tariff quotas that were in place before 2022. Preliminary estimates suggest that such changes could result in an economic shock for Ukraine, including a loss of foreign exchange earnings of up to €3.3 billion, a 2.52% GDP reduction in 2025, and declines in production in agriculture (-7.74%) and drop in tax revenues for local and state budgets (-4,15%).

"If a trade agreement based on Article 29 of the Association Agreement is not reached within the established timeframe, the European Commission must urgently initiate the extension of the current ATM regime for the period necessary to finalize negotiations. This will help avoid a sharp deterioration in the conditions for Ukrainian goods entering the EU market and prevent a macro-financial shock to the country's stability," the document states.

It is worth recalling that the agricultural sector is a cornerstone of Ukraine's economic stability, contributing approximately 15% of GDP, 59.3% of foreign exchange earnings ($24.7 billion), and significant tax revenues. The war has caused over $80 billion in direct and indirect losses to the sector, while ongoing high-intensity military actions make the prospects for sustainable recovery uncertain, necessitating continued support from Ukraine's allies, at least in the medium term.

The EU remains the primary market for Ukrainian agricultural exports (51.8%) and a key supplier of essential agricultural resources. While Ukraine has regained access to maritime export routes via the ports of Big Odesa, these routes are currently viable only for bulk cargo shipments due to ongoing hostilities. In contrast, packed and ready-to-eat products requiring container transportation are still exported via the "Solidarity Lanes" to the nearest EU ports, increasing logistics costs and reducing the competitiveness of Ukrainian goods in traditional markets.

Therefore, Ukraine's agricultural sector is critically dependent on the European market not only as a consumer but also as a partner ensuring stable supply chains, logistics, and access to financial instruments for industry development.

"Reverting to the tariff quotas and import duties of 2021 would have devastating consequences for Ukraine's economy. A trade agreement based on Article 29 of the Association Agreement or the extension of the ATM is essential for the stability of Ukraine's agricultural sector and the economy as a whole," the authors of the position conclude.

Given the above, Ukraine urges the European Commission and EU member states to accelerate negotiations on a future ambitious trade regime with Ukraine, taking into account current trade volumes. This will ensure the stability of the Ukrainian agricultural sector and support the country's economy during an exceptionally challenging period.

Association "Ukrainian Agribusiness Club" (UCAB) was founded in 2007 to protect the economic and professional interests of Ukrainian agricultural business players. UCAB is a unique platform for creating business contacts between agribusiness leaders, increasing the efficiency of their work and establishing dialogue with government authorities. UCAB actively promotes Ukrainian manufacturers in establishing and supporting international business relations. The association includes the largest producers and processors of agricultural products in Ukraine.

More about UCAB: https://www.ucab.ua/en