Background

Russia’s military action against Ukraine has had a profound impact on Ukraine’s ability to trade with the rest of the world. Under such exceptional circumstances and to mitigate the negative economic impact of Russia’s aggression on Ukraine, the EU decided in May 2023 to grant sweeping concessions to Ukraine in the form of trade-liberalisation measures for all products. One year on, those concessions have had a significant impact on EU farmers themselves, who have been asking for better protection from Ukrainian imports.  The EU just agreed to continue the existing trade liberalisation, but with the inclusion of new safeguard mechanisms, and in parallel to increase tariffs on imports of grain from Belarus and Russia, to release the pressure on EU farmers at expense of both countries, and not the Ukraine.

1. The existing measures and their consequences on EU farmers

On 31 May 2023 the EU adopted Regulation (EU) 2023/1077, which suspended for one year:

• The application of the entry price system to fruit and vegetables;
• Tariff quotas and import duties;
• Existing anti-dumping duties; and
• The creation of certain safeguard measures.

As a result, EU farmers have been facing growing competition from imports of grains from Ukraine.  EU farmers also face significant competition from Russian and Belarusian grain.

The EU has been working for months on measures that take into account to interest of EU farmers, while maintaining its support for Ukraine’s farmers. 

In February and March 2024, the European Commission proposed two new measures: a regulation extending the above-mentioned suspensions for another year and a regulation increasing tariffs on imports into the EU of grain products (cereals, oilseeds, and derived products) from Russia and Belarus. Both measures have been endorsed by the Council of the European Union and will enter into force on 6 June 2024 and 1 July 2024, respectively.

2. Extension of trade-liberalisation measures for Ukrainian imports

On 14 May 2024, the Council of the EU and the European Parliament adopted Regulation 2024/1392 extending the temporary trade-liberalisation measures (the ‘renewal Regulation’).  It will enter into force on 6 June 2024

To counter the potential negative effect of the measures on EU farmers, the renewal Regulation incorporates several changes compared to Regulation (EU) 2023/1077, including the following safeguard mechanisms:

• If a product originating from Ukraine that is covered by the trade-liberalisation measures is imported under conditions which adversely affect the Union market or the market of one or several member states for like or directly competing products, the Commission may now impose any necessary measures by means of an implementing act. Such measures may only be imposed upon a duly substantiated request from a member state.
• Automatic safeguard mechanism which obliges the Commission to reintroduce tariff-rate quotas if the cumulative import volume of either eggs, poultry, sugar, oats, maize, groats, or honey exceeds the arithmetic mean of import volumes recorded in the second half of 2021, all of 2022 and all of 2023.
  • The automatic safeguard measure under Regulation (EU) 2023/1077 only covered eggs, sugar, and poultry. The renewal Regulation extends this measure to oats, maize, groats, and honey, offering better coverage for EU farmers. The renewal Regulation also shortens the delay for the Commission to act from 21 days to 14 days.
  • In addition – and this has been the object of much debate – the renewal Regulation extends the reference period to determine if imports have exceeded the arithmetic threshold to include the second half of 2021. Under Regulation (EU) 2023/1077, the threshold was assessed only for all of 2022 and 2023.

The renewal Regulation excludes from its scope the exemption for anti-dumping duties. As a result, all anti-dumping dumping duties will apply again on 6 June 2024.

3. Increased tariffs on Russian and Belarusian grain products

In parallel, on 22 March 2024, the Commission proposed to increase the tariffs on imports into the EU of grain products (cereals, oilseeds, and derived products), as well as beet-pulp pellets and dried peas, from Russia and Belarus. The products concerned are classified under Chapters 7, 10, 12, 14, 15 and 23 of the Combined Nomenclature (CN) and are not currently subject to sanctions. This proposal was endorsed by the Council on 30 May 2024 and will enter into force on 1 July 2024.

This Regulation aims to:

• Prevent EU market destabilisation by mitigating the growing risk to EU farmers.
• Tackle Russian exports of illegally appropriated grain produced in the territories of Ukraine.
• Prevent Russia from using revenues from exports to the EU – of both Russian and illegally appropriated Ukrainian grain products – to fund its war against Ukraine.

Depending on the product concerned, the tariffs will increase either to a fixed duty of €95 per tonne or to an ad valorem duty of 50%. Lastly, the EU’s WTO quotas on grain, which offer better tariff treatment for some products, will no longer be applicable to Russia and Belarus.

Looking ahead

1. Next steps for the Regulation concerning Ukrainian grain imports

The renewal Regulation will enter into force on 6 June 2024 and will remain applicable until 5 June 2025.

2. Next steps for the Regulation concerning Russian and Belarusian grain imports

The Regulation has been published in the EU’s Official Journal and will enter into force on 1 July 2024, meaning the increased tariffs will be imposed from that date.