Ukraine lodged a complaint this week at the World Trade Organization after several eastern European states imposed import bans on Ukrainian food products, exposing divisions in the European Union as its members try to support Kyiv in the wake of Russia’s 2022 invasion.
Hungary, Poland and Slovakia banned the import of Ukrainian grain and other food products last Friday, saying the shipments were undercutting their own farmers.
Kyiv confirmed on Monday that it had filed a complaint at the WTO.
“It is crucially important for us to prove that individual [EU] member states cannot ban imports of Ukrainian goods. That is why we are filing lawsuits against them to the WTO,” Ukraine’s economy minister, Yulia Svyrydenko, said in a statement.
The WTO is not likely to make a ruling anytime soon, according to David Kleimann, a trade expert with the Bruegel research group in Brussels, Belgium.
“The process starts with 60 days of consultations in which the parties basically have the time to come to a mutually agreeable solution to the dispute. That is not entirely unlikely given the fact that some of this is a result of election prologue in Slovakia and Poland. There might still be time in that consultation period to come to a resolution,” Kleimann told VOA. Slovakia is due to go to the polls on September 30, while Poland’s election is scheduled for October 15.
Solidarity
Ukraine’s president said it’s vital that European states reopen their export routes. “We need our neighbors to support Ukraine in times of war. Europe always wins when agreements work and promises are kept,” Ukrainian President Volodymyr Zelenskyy said in a televised statement Friday.
Russia’s invasion of Ukraine last year cut off many of Kyiv’s export routes. In July, Moscow withdrew from a Black Sea Grain Initiative — a mechanism that had allowed Ukrainian grain to be shipped onto world markets — causing global food prices to rise. The Kremlin warned that it could not guarantee the safety of merchant ships. Russian missiles have repeatedly targeted Ukrainian Black Sea ports, causing widespread damage.
The European Union offered Ukraine other land routes to allow its food products to reach global markets via member states bordering Ukraine — what the EU calls “solidarity lanes.”
Olia Tayeb Charif, head of research at the Farm Foundation, a French think tank focused on agriculture, explained that some of the food products entered the European market.
“Ukrainian wheat is among the most competitively priced in the world, alongside Russian wheat. Since the start of the conflict, 50% of Ukrainian wheat exports have arrived in Europe, whereas before the conflict it was a really small amount. So the European Union is faced with an unprecedented situation, seeing very competitive wheat arriving in these markets which was not initially intended for them. This eventuality had not really been foreseen by the European authorities,” Charif told VOA.
Farmer protests
Farmers in several neighboring European states have staged protests, claiming that Ukrainian food is being dumped on local markets. “Low-quality, cheaper products than ours are sold in the shops. We have very high costs to produce quality meat and milk. We are operating at a loss, and therefore we will give up,” Bulgarian farmer Vassil Dzhorgov told The Associated Press on Monday.
In May, the EU offered the farmers compensation and allowed five eastern European states — Hungary, Poland, Slovakia, Bulgaria and Romania — to impose temporary import bans on some Ukrainian products. When the deadline expired on September 15, the EU said there was no need to renew these measures as the market distortion caused by the influx of Ukrainian products had largely disappeared.
Hungary, Poland and Slovakia, however, imposed their own unilateral import bans. Croatia also said Tuesday it would only allow the transit of Ukrainian grain.
EU criticism
European allies strongly criticized the import restrictions.
“Ukraine is under aggressive attack by Russia. And so we need to understand that here we have to see the bigger picture and support all these solidarity lanes, and also support the possibility for Ukraine to export its grain,” Finland’s minister of agriculture, Sari Essayah, told reporters in Brussels Monday.
In the meantime, the European Commission has told Ukraine to impose so-called “voluntary export restraint” as it tries to persuade eastern European member states to remove the import bans.
“What the commission is doing here is kicking the can down the road by giving an obligation to Ukraine to limit, to manage or to channel its exports to the European Union — and at the same time waiting out the time until the elections, most particularly in Poland, and hoping that the Polish political sentiment will change after the election. This is really not a sustainable solution,” analyst David Kleimann told VOA.
European divisions
The EU is caught between the demands of its member states and the need to support Ukraine, said Olia Tayeb Charif of Farm Foundation.
“Europe is really having to play a balancing act between, on the one hand, preserving its internal cohesion — that is to say, putting in place market regulation measures which prevent these agricultural markets from being disturbed by cheaper wheat — and on the other hand, helping Ukraine by allowing the transit of these grains to reach international markets. It should also be emphasized that historically, Ukraine’s export destinations are largely Africa and the Middle East, and they are also very large customers of the European Union,” Charif told VOA.
The dispute is exposing divisions within the European Union as it tries to show unity following Russia’s February 2022 invasion of Ukraine, said Kleimann.
“Single market fragmentation in in these difficult times, with the security interest of the European Union and the interest of keeping pro-Russian sentiments in check — this is pretty much a worst-case scenario,” he told VOA.
…