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EU extends targeted bans on Ukrainian wheat until mid-September, despite Kiev’s objections

origin 1Imports of Ukrainian wheat were exempt from duties as part of EU wartime support. ©Efrem Lukatsky/Copyright 2022 AP. All rights reserved

The European Commission decided on Monday evening to extend until September 15 a series of exceptional bans on duty-free imports of Ukrainian wheat, the influx of which has been credited with depressing prices in Eastern Europe and sparking anger from local farmers.

The bans are targeted and apply only to the movement of wheat, corn, rapeseed and sunflower seeds from five countries on the periphery of Ukraine: Poland, Hungary, Slovakia, Romania and Bulgaria.

The extension was approved despite objections expressed by the Kiev authorities, including President Volodymr Zelenskyy himself, and “serious concerns” raised by Germany, France and 10 other member states in a joint letter.

“These measures continue to be necessary for a limited period of time given the exceptional circumstances of severe logistical bottlenecks and the limited storage capacity of grain before the harvest season experienced in five Member States,” the European Commission said in a statement. Note.

The bans follow an agreement reached between the European Commission and five Eastern European countries, which had complained of mounting economic losses caused by gluts of grain.

As part of its assistance to Ukraine, the European Union has suspended all duties and tariffs on imports of products, such as vegetables, fruit and meat, covered by the EU-Ukraine Association Agreement.

The dispute erupted in April, when four of the five countries concerned unilateral measures imposed on a wide range of Ukrainian food products, which go far beyond wheat and corn.

The dispute took Brussels by surprise and raised questions about how long the bloc’s political solidarity with the war-torn nation would last.

Following behind-the-scenes negotiations, the European Commission reached an agreement with the five countries on the condition to disburse a €100 million support package for farmers in Poland, Hungary, Slovakia, Romania and Bulgaria.

The deal introduced “exceptional and temporary preventive measures” on four Ukrainian products – wheat, maize, rapeseed and sunflower seeds – which Brussels deemed to have the strongest disruptive effect.

These products are only allowed to transit through the five eastern countries, which means they cannot be stored in their territory or purchased for domestic consumption.

Instead, they are sent directly to other member states or shipped to low-income nations around the world.

In practice, “preventive measures” amount to a legalized ban, aimed at replacing unilateral restrictions with a coordinated approach.

Hungary, however, has not yet fully lifted its national bans.

Under the original deal, the transit-only bans were to last until June 5, coinciding with a one-year extension of the duty-free system for Ukraine.

In the days leading up to the deadline, the European Commission gave vague answers about the future of “preventive measures” and insisted its decision would be based on economic data from the field.

Ukraine has publicly denounced the bans, calling them “completely unacceptable”, and has lobbied EU officials to lift them.

Separately, a group of 12 countries, including Germany and France, sent a joint letter last month in which they raised “serious concerns” about the grain deal, its possible incompatibility with EU trade rules and its lack of transparency.

“We are in favor of finding European solutions that take into account the difficulties encountered by some Member States. However, the integrity of the internal market cannot be an adjustment variable”, write the 12 countries in the letter, seen by RockedBuzz via Euronews.

The objections didn’t stop Brussels from extending the bans, a decision announced just four hours before the deadline.

The transit-only measures will apply to the same four agricultural products but exclude sowing.

In its statement, the European Commission said the restrictions would be phased out by September 15, but could be reassessed before then if the movement of Ukrainian grains was “hampered by unduly burdensome requirements” in any of the five Eastern European countries .

“The European Commission will not hesitate to act if national trade bans prevent Ukrainian agricultural products from reaching countries where they are needed,” said Valdis Dombrovskis, executive vice president in charge of trade.

Aware of the political explosiveness of the issue, the executive has set up a coordination platform that brings together representatives of Poland, Hungary, Slovakia, Romania and Bulgaria, as well as Ukraine, to regularly monitor market trends.

The first meeting of the platform took place on Friday.