Debate: Ukrainian cereals on the European market
Date: WEDNESDAY, 10 MAY 2023
Speaker: Janusz Wojciechowski
Language: EN

This is why we are helping Ukraine, including economically. In doing so, we have opened up the European Union fully to free trade with Ukraine. This process started already in 2014, following the first Russian aggression against Ukraine when the Deep and Comprehensive Free Trade Agreement between the European Union and Ukraine was signed and trade liberalisation took place, including the removal of tariffs on most cereals.  Honourable Members, it is very important to remember that free trade for the majority of agricultural products, free import from the majority of agricultural products started not in 2022, but in 2014. This is the consequence of decisions adopted in 2014. For example for maize, for rapeseed, that rate was free from tariffs before the war, from after the decision adopted in 2014.  In 2022, under the Autonomous Trade Measures Regulation, this substantial liberalisation was further extended to the remaining agricultural and industrial barriers. Ukrainian cereal imports were substantial before the war. In 2021, the European Union bought around 7 million tonnes of maize and around 300 000 tonnes of wheat.  However, in 2022 these imports increased further to 12 million tonnes of maize and over 2.8 million tonnes of wheat. This significant increase affected the market of five frontline countries: Poland, Romania, Hungary, Bulgaria and Slovakia at the same time as Ukrainian traditional logistics chains were disrupted by the war. Millions of tons that were usually shipped via Ukraine and Black Sea ports must now transit instead through its neighbouring EU Member States. Not all of these exports reached their traditional markets in the EU such as Spain, Portugal and Italy or third countries. In fact, their significant volumes in the street have been sold in the neighbouring Member States, saturating domestic logistical chains and destabilising local markets.  Since April 2022, after the start of the war, Ukrainian Ukraine exported 48 million tonnes of grains, half of which to the European Union. The imports of grain into the five frontline Member States for four sensitive products – maize, wheat, rapeseed and sunflower seed – increased to 10.3 million tonnes from just 141 000 tonnes imported in 2021, out of which 3.4 million tonnes remained in Poland, 2.5 million tonnes in Romania, 2.3 million tonnes in Hungary, 1.1 million tonnes in Bulgaria and about 800 000 tonnes in Slovakia.  This important quantity caused market disturbances and presented difficulties for farmers in these countries to sell their own cereals. It is also worth highlighting the important role played by the frontline Member States in terms of transit and solidarity lanes, with Romania marking some 6.5 million tonnes of grain transiting from Ukraine in the course of the year.  The Commission is fully aware of this situation and I am pleased that we have recently agreed on a common European approach to address this problem. The support package that the Commission has put forward under the condition that all unilateral measures are lifted has been designed to help the frontline Member States and their farmers to mitigate the difficulties they are facing with issues related to logistical bottlenecks resulting from the imports of certain agri—food products from Ukraine.  Let me outline the key elements of the package. First of all, on 2 May 2023, the Commission took temporary preventive measures pursuant to the safeguard clause included in the Autonomous Trade Measures Regulation to address the exceptional challenges caused by logistical bottlenecks in the five Member States. These preventive measures cover the four most sensitive products – wheat, maize, rapeseed and sunflower seeds. The transit of these products within the European Union and to third countries will continue to be ensured. These products will reach and circulate freely in the all European Union Member States except Bulgaria, Hungary, Poland, Romania and Slovakia.  Second, where necessary the Commission is ready to launch four other sensitive products and an assessment of the situation on the Union market pursuant to the expedited safeguard mechanism under the new ATM regulation upon its entry into force.  Third, the Commission is putting forward an additional exceptional support measures of EUR 100 million for affected farmers in the five Member States of Bulgaria, Hungary, Poland, Romania and Slovakia. Those Member States will have the possibility to top up this amount with a 200% national co—financing rate. This comes on top of the exceptional support measures of EUR 56.3 million adopted in early April for Bulgaria, Poland and Romania.  Fourth, the Commission and Member States will work to facilitate the transit of Ukrainian grain exports via the solidarity lanes so that they reach those countries in need. This includes continued work on lowering overall logistics costs, streamlining controls, better coordinating transit and enhancing infrastructure and equipment at ports, transhipment terminals or border crossing points under the EU solidarity lanes.  Solidarity lines and the continuation of the Black Sea Grain Initiative are complementary and essential to ensure adequate food supplies for those countries in need of them. The European Union therefore fully supports all efforts of the United Nations to prolong the Black Sea Grain Initiative. When we look at the improvements, it has been noted that the European Union is doing its part to support countries in need. Trade figures also show that our ties with vulnerable partners are strengthening. The European Union exports of wheat to the least developed countries increased by over 50% in 2022 compared to the year before Russia’s war. The opposite perception exists and shows how Russia’s propaganda is designing and permeating the world today.  As always, when discussing the relationship between the European Union and Ukraine, we must remember that Russia’s war continues. Russia has not stopped in Ukraine before and will go further if it is able and allowed to do so. We must therefore not forget that Ukraine is fighting not only for its own freedom, but also for ours, defending the European and democratic values we are so much proud of. That is why we will continue to stand with Ukraine and its people for as long as it takes. Thank you for your time. I look forward to your contributions.