EU nations bordering Ukraine oppose new trade deal, demand tighter safeguards

Five European countries bordering Ukraine expressed concerns over the proposed revised trade agreement with Ukraine during a European Agriculture Council meeting, citing potential destabilization of EU agricultural markets, local media reported July 15.

Despite the agreement with Ukraine, the neighboring countries continue to push for changes to the proposed amendments to the trade deal and demand stronger safeguards to protect their farmers.

Poland, Slovakia, Hungary, Bulgaria, and Romania raised concerns about the new trade conditions with Ukraine, a diplomatic source told the European Pravda. "They believe the revised agreement under the Deep and Comprehensive Free Trade Area could destabilize European markets," the source said.

EU agriculture commissioner Christophe Hansen confirmed that the revised trade deal was discussed at the EU council meeting, according to the same report.

Hansen also noted that the review of the 2016 agreement had been due in 2021 but was postponed due to Russia's full-scale invasion of Ukraine.

The EU is Ukraine's largest trading partner, while Ukraine ranks among the top suppliers of food and agricultural products, including wheat and corn, to the EU, according to European Commission data. The proposed trade agreement would replace the visa-free regime with Ukraine that expired in early June.

EU, Ukraine agree on revised trade deal

On June 30, the EC concluded negotiations with Ukraine on the main principles of a revised trade deal following the expiration of the autonomous trade measures.

Under the updated agreement, the EU will fully open its market to less sensitive Ukrainian products such as fermented milk and grape juice. For moderately sensitive items like butter, skimmed milk powder, gluten, oats, and barley groats, import quotas will be increased to match the highest levels seen in recent years.

However, for highly sensitive products — including sugar, poultry, eggs, wheat, maize, and honey — quota increases will be limited. No additional volumes will be allowed for other meats.

As part of the deal, Ukraine will also open its market to EU poultry, pork, and sugar. Additionally, it has committed to align with EU agricultural production standards — covering areas such as animal welfare and pesticide use — by 2028.

The agreement includes safeguard clauses, allowing either side to respond if imports significantly disrupt their domestic markets. It also provides for regular reviews to assess its impact. Final approval from EU member states is still required.

"The EU is trying to find a very fragile balance between all interested parties - farmers from neighboring countries, traders, Ukrainian collaborators as well," a trade source said.

"Safeguards are useful, but unless the EU has a common strategy, consistent rules, and serious trade negotiations, it risks turning into just a pass-through region for goods rather than a strong, unified trade partner," a EU grain market expert said.

EU ends duty-free access for Ukrainian goods

During the Russia-Ukraine war, the EU extended trade support to Ukraine by introducing ATMs in June 2022, allowing the country to trade freely within the bloc.

However, these measures adversely impacted farmers within the EU, particularly those in countries neighboring Ukraine. Since its implementation, farmers in the bloc have been expressing their concerns over imports of Ukrainian goods, which are threatening their business.

Despite this, the EU extended its free trade measures for Ukraine twice, in June 2023 and June 2024, but introduced safeguard measures on sensitive products.

The deal ended on June 5 this year, and since then, the EU has reinstated tariffs and quotas on Ukrainian agricultural exports.

Platts, part of S&P Global Commodity Insights, assessed Romanian wheat 11.5% CVB FOB at $230.75/mt July 15, up $1.50/mt day over day.