Kiev says scrapping ATM in trade with EU affects 17 tariff quotes, hoping to solve problem

MOSCOW. June 9 (Interfax) - The Ukrainian Economy Ministry has confirmed the National Bank prognosis of a decline in Ukrainian exports to the European Union in the wake of scrapping the Autonomous Trade Measures (ATM) and reinstating pre-crisis quotas totaling $800 million on June 6, Ukrainian media said.

"The lack of EU concessions on revising quotas affects trade worth $3.5 billion and could reduce revenue by $800 million. This is the worst-case scenario. Active negotiations are ongoing and there is a wish to complete the work in the coming days," the media quoted First Deputy Prime Minister, Economy Minister Yulia Sviridenko as saying on a social network.

Reinstating the 2021 trade regime with the European Union means the continuation of free trade consistent with the Deep and Comprehensive Free Trade Areas (DCFTA) Agreement, except in 40 categories of agricultural products subject to tariff quotas, she said.

The experience of unrestricted trade shows that trade volumes are higher than the 2021 tariff quota in 17 out of 40 tariff quotas, Sviridenko said Therefore, the reinstatement of quotas would not be a restriction for 23 goods: this includes garlic 235 tonnes of which were exported by Ukraine last year, versus the 500-tonne quota.

The reinstatement of quotas will have a partial effect on the volumes of trade even in such goods, Sviridenko said. In particular, corn exports to the EU hit a record of 14 million tonnes before 2022 with a formal quota of 650,000 tonnes, because the EU does not apply tariffs to corn imports at all (except for Russian corn).

"A product such as honey is also exported with the payment of duties - this phenomenon has been known since the first year of the free trade agreement. Wheat is in global demand," she said.

Yet the reinstatement of tariff quotas would cut the exports of certain commodities, the most illustrative example of which is sugar. The sugar quota is limited to 20,000 tonnes, while 311,000 tonnes were exported last year, Sviridenko said.

Even the exporters of sensitive products will not feel the change in trade in the first weeks after ATM scrapping, because the EU has "zeroed out" the volumes for goods subject to quotas and started the counting anew, she said.

"Of course, such goods as dry milk or tomato paste may start experiencing problems with access to the market in two months. That is why it is so important to complete negotiations on increasing and eliminating quotas in the coming days," Sviridenko said.

As reported, the first ATMs entered into force on June 4, 2022, for a period of one year, temporarily lifting duties, quotas and trade restrictions for Ukrainian goods. Since then, they have been extended twice: on June 6, 2023 and June 6, 2024, the last time with quotas for duty-free export of certain goods. For 2025, a government resolution set the quota for sugar exports to the EU at 107,200 tonnes, versus the 57,100-tonne quota for poultry.

The EU has announced that quotas have returned to the pre-crisis volumes from June 6 and for the period until the end of 2025 and will amount to 7/12 of the annual quota under DCFTA.