The European Union’s fragmented stance on the future of trade relations with Ukraine contrasts sharply with the country’s urgent calls for continuity.
The situation has to many highlighted the grave risks to Kyiv’s export-driven war financing if pre-conflict trade norms were reinstated.
Implemented in June 2022 and renewed last May, the EU’s temporary trade measures for Ukraine are now nearing their expiration date on 5 June 2025.
Originally framed as an emergency measure, their continuation has become a point of contention. While Ukraine viewed them as an essential pillar of its wartime economy, the EU has faced mounting political pressure from several of its member states’ governments, farmers and industries, all wary of competition, making the prospect of a straightforward renewal unlikely.
For Ukraine, not renewing the trade measures would be a major economic blow. “Potential losses for revenues from foreign currency could reach around $3.5 billion,” the president of Ukrainian Agriculture industry representation told Ukrainian media recently.
Finance minister Serhiy Marchenko told the UK’s Financial Times on March 24: “The European Union is our key trade partner, and that’s why it would be really damaging for us if we [found] ourselves in a situation which we had before the war.”
In the EU, the political and economic landscape has complicated decisions.
Poland, Hungary, Slovakia and Bulgaria have remained opposed to full liberalisation of Ukraine’s farming industry, citing pressure from their domestic farming sectors.
Powerful industries, particularly in France and Poland, have also pushed back.
European sugar producers have warned that Ukrainian imports had driven prices down by over 30 per cent in the past year, forcing the EU to reinstate quotas, Reuters reported on March 20. Grain, poultry, and dairy sectors also fear increased competition, with industry groups lobbying against an extension of the trade measures.
While the European Commission has been finalising a proposal, an EU official told the FT, whether it would gain enough support remained unclear.
Despite ongoing talks, long-term negotiations “have not progressed and it is too late for that now”, the official told the FT.
With just weeks before the deadline, the EC is working on a temporary renewal as the only viable fallback.
Beyond Brussels, uncertainty over US military aid has compounded Ukraine’s economic predicament. “Without support from the United States, we’d be in a very dramatic situation … because we cannot easily substitute it,” Marchenko said.
Although long-term negotiations remained stalled, the EC said during a press briefing that it was in “constant contact” with EU members on the issue of removing autonomous trade measures and dissociated agreements before formal conclusions.
“We have to support Ukraine right now more than ever,” the EC added during that briefing.
Representatives of the member states were set to meet on March 25 at the Trade Policy Committee of the Council of the EU, where imports of Ukrainian products were expected to be a key discussion point.
If the measures expired without a new deal, Ukraine may be forced to redirect exports elsewhere. Agriculture minister Vitaliy Koval told Ukrainian media that Kyiv was already considering expanding trade routes in Africa and the Middle East.
