Abolition of ATM in trade with EU affects 17 tariff quotas, Ukraine hopes to resolve problem in coming days – Svyrydenko
The Ministry of Economy confirmed the National Bank’s assessment of a possible decrease in exports of Ukrainian products to the EU due to the abolition of autonomous trade measures (ATM) from June 6 and the return to pre-war quotas of $800 million, but hopes to avoid this worst-case scenario and reach an agreement on increasing and eliminating quotas.
"The lack of concessions from the EU on the revision of quotas affects trade worth $3.5 billion and could reduce revenue by $800 million. But this is the worst and darkest scenario. Active negotiations are ongoing right now and there is a desire to complete this work in the coming days," First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko wrote on Facebook.
She noted that the return to the 2021 trade regime with the EU means that all trade continues to remain free within the framework of the Deep and Comprehensive Free Trade Area (DCFTA), with the exception of 40 categories of agricultural products for which tariff quotas apply.
The deputy prime minister clarified that the experience of trade without restrictions has shown that in 17 out of 40 tariff quotas, trade volumes are greater than the tariff quota at the 2021 level. Therefore, for 23 goods, the restoration of quotas will not become a restriction - for example, garlic, of which Ukraine exported 235 tonnes last year under a quota of 500 tonnes.
Svyrydenko emphasized that even for these goods, the restoration of quotas will only partially affect trade volumes. In particular, corn exports to the EU reached a record 14 million tonnes by 2022 under a formal quota of 650,000 tonnes, because the EU does not apply duties on corn imports at all (except for Russian corn).
"A product such as honey is also exported with payment of duties - this phenomenon has been known since the first year of application of the free trade agreement. Wheat has global demand," the minister added.
At the same time, she acknowledged that there are goods for which the restoration of tariff quotas will reduce exports, and the most indicative is the export of sugar, the quota for which is 20,000 tonnes with exports of 311,000 tonnes last year.
According to Svyrydenko, the actual changes in trade in the first weeks after the abolition of the ATM will not be noticeable even for exporters of sensitive products, because the EU has "reset" the calculation of volumes for quota goods and started the countdown anew.
"Of course, in just 2 months for such goods as powdered milk or tomato paste, problems with market access may arise. That is why it is so important to complete negotiations on increasing and eliminating quotas in the coming days," the official emphasized.