Recent Daily Dynamics
EU Let's Suspend Trade Aid Measures for Ukraine Expire - EU to Discontinue Trade Simplification Measures for Ukraine
The EU's Temporary Trade Measures (TTMs), granting Ukrainian agricultural goods tariff-free access to the EU, have come to an end. These measures were enacted in 2022 to help Ukraine's ailing economy during Russia's aggression. The expiry signals a move towards a temporary trade agreement that will govern commerce until the end of 2025, with seven-twelfths of the annual limits from the prior trade accord available[1][3].
Consequences
- Impact on Ukraine's Economy: The loss of tariff-free access imposes major hurdles for Ukraine, particularly its agriculture sector. Ukrainian exporters now grapple with tariff quotas, which could undermine their competitiveness in the EU market[1][2].
- Domestic Pressure on EU: The EU Commission has been under pressure from domestic agricultural sectors, notably France and Poland, whose farmers have protested the influx of Ukrainian imports. Internal strife has made securing a long-term trade pact more challenging[1][3].
- Negotiations for a New Pact: The EU Commission is conducting a revision of the Deep and Comprehensive Free Trade Area (DCFTA) to offer longer-term stability and predictability for trade between the EU and Ukraine. Negotiations for DCFTA modifications are ongoing[5].
Influence of Russia and EU Commission
- Influence of Russia: Despite Russia's role in initiating the TTMs, current events are primarily driven by EU internal politics and the need to renegotiate trade terms.
- Role of EU Commission: The EU Commission is key to the negotiations, aiming to reconcile the interests of EU member states with the need to support Ukraine's economy. The Commission faces criticism for not finalizing a long-term agreement before the TTMs expired[2][3].
Looking Forward
The future of EU-Ukraine trade depends on the results of these negotiations. A revised DCFTA could create a more stable and favorable trade environment for Ukraine, supporting its integration dreams with the EU[5]. However, Ukraine's exporters face challenges during the transition period, and the EU must balance its internal agricultural interests while backing Ukraine amid its conflict with Russia.
The temporary trade agreement, set to govern commerce between the EU and Ukraine until the end of 2025, will significantly impact Ukraine's employment policy, particularly in the agriculture sector, as Ukrainian exporters now face tariff quotas that could impact their competitiveness in the EU market. The EU Commission, in its role as a mediator in these negotiations, must balance the employment policies of EU member states, notably those in agriculture, with its commitment to support Ukraine's economy amidst its ongoing conflict with Russia.
Industry sectors within the EU, such as finance, will also closely monitor the negotiations between the EU Commission and Ukraine, as the revised DCFTA could influence the long-term employment policies and economic stability of various industries across Europe.
