End of Customs Duties for Ukrainian Products Entering the EU?
Come visit our blog to learn about the European Union's (EU) efforts to assist the Ukrainian economy and keep it from collapsing in the midst of the Russia-Ukraine war.
The Ukrainian economy has been on its knees since the outbreak of the war in February 2022, weakened by the destruction of factories and the blocking of ports. Faced with this situation, the entire world is mobilizing to prevent the Ukrainian economy from collapsing. As a result, the European Union (EU), which is at the forefront of the chain of solidarity for Ukraine, has made a firm decision.
A One Year Exemption
Customs duties on Ukrainian-made goods have been officially suspended. What was only a theory a few months ago is now a reality. On May 24th, 2022, the EU Council approved a one-year suspension of customs duties on all products imported from Ukraine. This measure, proposed by the European Commission on April 27th, had already been approved by the European Parliament on May 19th. As a result, the regulation has been validated and will enter into force the day after it is published in the Official Journal of the EU.
"They will fully remove import duties on industrial products, entry duties on fruit and vegetables, as well as anti-dumping duties and safeguard measures on steel imports for a period of one year," the European Parliament said in a statement. The suspension of customs duties "will facilitate Ukraine's trade in the face of aggression (from Russia) and provide support to its economy," welcomed the Vice-President of the Commission, Valdis Dombrovskis, during a press conference.
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The Current State of Trade Relations between the EU and Ukraine
Bilateral trade between the EU and Ukraine accounted for 52 billion euros in trade last year, according to an EU executive. The figure has doubled since 2016. The EU is Ukraine's largest trading partner, accounting for 40% of Ukrainian trade. In 2021, Ukraine exported goods worth €24.1 billion to the EU, mainly raw materials like iron and steel, but also agricultural products. Since 2017, the Deep and Comprehensive Free Trade Areas (DCFTA) between the EU and Ukraine have been in force, helping to increase trade between the trading bloc and Ukraine.
Helping Europe by Helping Ukraine?
According to several experts, the reality behind this EU action is not only to help the Ukrainian economy, but also to limit inflation in Europe by maintaining a stable price for Ukrainian products on which Europe is heavily reliant. Indeed, some high consumption products such as wheat or sunflower oil have seen their prices reach historic highs in Europe in recent months.
Let’s hope that by solving a global problem, the EU does not create a local problem for its companies.
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