Ukrainian Agribusiness Club Advocates for New Trade Agreement with the EU

In a recent statement, the Ukrainian Agribusiness Club (UCAB) and several prominent agricultural associations have voiced their concerns regarding the future of trade arrangements between Ukraine and the European Union. This collaborative effort aims to secure a sustainable trading environment for Ukraine’s agrarian sector, framed against the backdrop of the current autonomous trade measures (ATM) that are set to expire on June 5, 2025.

Urgent Call for Negotiations

The Ukrainian agrarian community strongly supports the European Commission's proposed switch from the current ATM structure to bilateral trade agreements. This approach not only aims to liberalize trade further but also allows for sufficient time to negotiate a comprehensive future trading framework. UCAB, along with other significant bodies like the Ukrainian National Agrarian Forum (UNAF), outlines that reaching a new agreement is critical to stabilizing market access for Ukrainian producers and ensuring predictability for European farmers and processors alike.

According to representatives in the sector, the advantages of establishing such agreements would contribute significantly to the long-term stability needed for Ukraine’s agricultural industry. A bilateral trade format accompanied by a flexible mechanism for gradual liberalization would consider sensitive product categories and allow for proper safeguard measures.

The Economic Stakes

A looming economic crisis is evident if new agreements are not finalized before the current ATM regulations expire. Without a new framework in place, trade conditions would revert to tariffs and quotas established prior to 2022, translating into an expected loss of foreign currency earnings potentially reaching up to €3.3 billion. Econometric forecasts suggest a drop in GDP by 2.52% in 2025, alongside a substantial decline in agricultural production and tax revenues that serve both local and state budgets.

The UCAB expressed a strong necessity for an expedited negotiation process. Statements from the organization indicate that should an agreement based on Article 29 of the Association Agreement not be achieved within the stipulated timeframe, the European Commission must consider extending occupancy of the current ATM regulations. This measure would aim to mitigate adverse effects on Ukrainian goods within the EU market and avoid macroeconomic instability in Ukraine.

The Backbone of Ukraine's Economy

Agriculture constitutes a crucial pillar of Ukraine’s economy, contributing approximately 15% to the GDP and providing over half of the foreign currency earnings, amounting to USD 24.7 billion. The ongoing conflict has inflicted over USD 80 billion in direct and indirect damages to this sector. With the prospect of sustained recovery dimmed by ongoing military pressures, continued international support remains vital.

The EU is by far Ukraine’s largest export market, accounting for 51.8% of its agricultural exports. Ukraine has regained limited access to maritime export routes through the Black Sea, but current routes primarily accommodate bulk shipments, complicating logistics for processed food items. As a result, shipping costs have risen and competitiveness of Ukrainian goods on established markets has diminished.

Looking Forward

Facing such critical circumstances, the Ukrainian agrarian sector hinges on international support not only as a consumer but as a partner to ensure steady supply chains and logistical efficiency. The reestablishment of pre-2022 tariff conditions would be catastrophic for the economy, highlighting the necessity for immediate EU attention towards a trade agreement or an extension of the ATM.

With these complex factors in mind, Ukrainian agribusinesses appeal to the European Commission and EU member states to accelerate negotiations for an ambitious future trade framework that aligns with the current trade volume. Doing so will ensure ongoing stability for Ukraine’s agrarian sector and support the economy during this extraordinary challenging period.

The UCAB, established in 2007, represents the economic and professional interests of Ukraine's agribusiness and functions as a key platform for fostering connections between leading figures in the agricultural sector. More information on UCAB can be found at UCAB's official website.