Ukrainian Agribusiness Community's Stance on EU Trade Agreements

Position of the Ukrainian Agribusiness Community on Trade Agreements with the EU

The Ukrainian Agribusiness Club (UCAB), in coalition with several prominent agricultural associations under the banner of the Ukrainian National Agrarian Forum (UNAF), is making a unified call regarding the future trade regime between Ukraine and the European Union (EU). This plea comes as the current Autonomous Trade Measures (ATM) regime is set to expire soon.

Members of the Ukrainian agricultural community are voicing urgent concerns about the impending expiration on June 5, 2025, of the ATM regime, which has allowed for beneficial trade arrangements. They support the European Commission's proposal to replace the yearly ATM extensions with bilateral trade agreements aimed at further liberalizing trade, as stipulated in Article 29 of the Association Agreement, provided there is adequate time for negotiating the future trade framework.

This shift toward bilateral agreements is viewed favorably by the agricultural sector as it promises to enhance market stability and ensure predictability for both Ukrainian farmers and European processors. Key benefits include the long-term nature of such agreements, mutual market access, and a flexible mechanism for gradual liberalization that takes into account sensitive product categories and safeguard measures.

However, the urgency in negotiations cannot be overstated. Should the current ATM regime lapse without a new agreement in place, trade conditions would revert to the tariffs and quotas that were effective prior to 2022. Preliminary estimates suggest that this reversion could lead to significant economic repercussions for Ukraine—potential currency revenue losses of up to €3.3 billion, a 2.52% reduction in GDP in 2025, and drops in agricultural output of approximately 7.74%, along with declines in both local and state tax revenues by about 4.15%.

In their statement, representatives from the agricultural sector have stated, "If a trade agreement based on Article 29 of the Association Agreement is not established within the designated timeframe, the European Commission must urgently extend the current ATM regime to allow for continued negotiations. This step is crucial to prevent a drastic deterioration of conditions affecting the entry of Ukrainian goods into the EU market and to mitigate macro-financial impacts on the stability of Ukraine."

The agricultural sector forms a vital cornerstone of Ukraine's economic stability, contributing nearly 15% of the GDP and generating 59.3% of foreign exchange income—approximately $24.7 billion. The war has inflicted significant losses on the sector, totaling more than $80 billion, while ongoing military actions cast uncertainty over sustainable recovery, underscoring the need for continued support from Ukraine's allies in the medium term.

The EU remains Ukraine's primary export market for agricultural goods, accounting for 51.8% of exports, and serves as a critical supplier of essential agricultural resources. Although Ukraine has regained access to maritime export routes via the Odesa ports, these routes currently cater primarily to bulk shipments due to ongoing conflicts. Conversely, packaged goods requiring container transport are still being exported through the “Solidarity Lanes” to the nearest EU ports, resulting in increased logistics costs and diminished competitiveness in traditional markets.

As a result, the Ukrainian agricultural sector's reliance on the European market is acute, not only for consumer access but also for partnership assurances that stabilize supply chains, logistics, and financial instruments crucial for industry development.

Reverting to the tariffs and quotas of 2021 would have devastating consequences for the Ukrainian economy. Therefore, negotiating a trade agreement anchored in Article 29 of the Association Agreement or extending the existing Association Agreement is deemed essential for the stability of Ukraine's agricultural sector and the economy as a whole.

In light of this, Ukraine urges the European Commission and the EU member states to expedite negotiations on an ambitious future trade regime with Ukraine, aligning it with current trade volumes. This approach is vital for ensuring the stability of Ukraine's agricultural sector and supporting the national economy amid extraordinarily challenging circumstances.

The Ukrainian Agribusiness Club (UCAB) was established in 2007 to safeguard the economic and professional interests of Ukrainian agricultural entrepreneurs. It serves as a unique platform for business networking among agro-industry leaders, enhancing operational efficiency and fostering dialogue with governmental authorities—actively promoting Ukrainian manufacturers while supporting international trade relations.

For more information about UCAB, visit UCAB Website.