European Commission split on Ukraine trade as decision on import duty looms

Tue 9 Jan 2024
Posted by: Phillip Adnett
Trade News

Russia/Ukraine flags over trade graphic

The European Commission (EC) is facing dissent in its ranks ahead of a decision on whether to extend duty free trade with Ukraine.

The EU suspended import duties, quotas and defence measures for trade with Ukraine under the Autonomous Trade Measures Regulation (ATM) on 4 June 2022, with a one-year extension coming into effect in June 2023.

The decision to extend the ATM was taken by the EC in late February last year, but there are reports that this year’s extension proposal could come as early as this week, making the timing of the EC split especially inconvenient.

Difficulties

Politico reports that the wider EC wants to keep the measures in place but agriculture commissioner Janusz Wojciechowski is said to be sceptical.

Wojciechowski is said to be deeply concerned about the impact of Ukrainian shipments on his native Poland’s economy, particularly the agricultural industry.

Last year, a row broke out between EU member states, with several Eastern European countries unilaterally imposing their own restrictions, including Hungry and Poland.

In a letter seen by Politico, Wojciechowski said that the trade liberalisation measures would help Russia by moving Ukrainian food exports towards Europe and away from Africa and Asia, distorting the market and aiding Russia’s propaganda effort.

On Saturday (7 January), Polish farmers suspended their blockade of the Poland-Ukrainian borders after new Polish prime minister Donald Tusk reached an agreement on financial support for the agricultural sector.

Presidential games

Meanwhile, another decision has caused consternation among European officials, as European Council president Charles Michel has announced his decision to resign early.

Michel made the decision in order to run in the European Parliamentary elections in June, running for the Belgian Reformist Movement, of which he is a former leader.

"I've decided to stand as a candidate for the European elections in June 2024," he told Belgian media.

Successor

If no successor is found, Hungarian PM Viktor Orban would temporarily take charge of the presidency, giving him wider power over the EU’s decision.

Hungary will take over the rotating presidency of the Council of Europe in July, meaning that if Michel’s successor is not found before then, Orban would chair meetings of the European Council and oversee those deciding how the EU responds to Russia’s invasion of Ukraine.

Given Orban’s support for Russia – he was the only EU leader to meet face-to-face with Russian president Vladmir Putin last year many European politicians are said to be deeply concerned.

Some of the names floated for president include former Italian PM Mario Draghi, current Spanish PM Pedro Sánchez and Danish leader Mette Frederiksen, according to the FT.