The European Parliament has increased import quotas
In September 2016, the European Commissioner for Trade, Cecilia Malmström, went to Kiev to meet with the Ukrainian government to discuss putting into practice the Association Agreement signed in 2014 between the EU and Ukraine, in particular the Deep and Comprehensive Free Trade Area agreement. Her meetings with various ministers, parliamentarians and Ukrainian businesspeople provided the opportunity for the European Commissioner to announce the extension of European market opportunities for agricultural and industrial products from Ukraine. Mrs. Malmström suggested increasing the quantities of duty-free imports from Ukraine for a number of specific agricultural products such as honey, cereals and processed tomatoes.
This one-way measure was aimed at significantly improving the conditions for Ukrainian exports in order to "give a positive boost to the Ukrainian economy and […] unleash the full potential of our free trade area."
In the early months after the implementation of the Association Agreement, Ukrainian exports to countries of the EU increased by 5%.
Last 28 June, a compromise was reached between the Council of Europe and the European Parliament regarding the temporary autonomous trade measures granted to Ukraine. The proposal aims at further improving access to the European market for Ukrainian export operators, in consideration of their difficult circumstances and the efforts already undertaken by Ukraine in the area of economic reforms. These commercial provisions, which were introduced during the signing of the Association Agreement, have been applied as temporary measures since 1 January 2016. The compromise, which is applicable for a period of three years, includes an extra annual duty-free quota of 3 000 tonnes of tomato products (tariff heading HS2002) from the Ukraine (previously suspended by decision of the Parliament). The Commission had first suggested increasing the quota by 5 000 tonnes. These quantities are additional to the 10 000 tonnes already quoted in the Association Agreement from 2014.
The text should be definitely adopted at the end of July 2017 and implemented at the end of September.
Despite the difficulties linked to tense relations with Russia, and the current trade context where demand is weak and prices are low, annual exports of tomato paste from Ukraine to countries of the EU28 grew from 15 100 tonnes in 2015 to close on 33 000 tonnes in 2016. These consignments were mainly shipped to the markets of Poland (from 8 500 tonnes in 2015 to 23 500 tonnes last year), Germany and Belorussia, after the Russian borders were shut to Ukrainian products. In total, foreign sales of Ukrainian paste amounted to more than 42 000 tonnes last year.
It seems that the policy applied by European authorities has produced the expected results: according to the specialized press, the upward trend was confirmed in the first months of 2017, with an increase of almost 13% in the volumes shipped compared to the first part of 2016.
(See also our article in the March 2017 issue.)
