The introduction of an ill-considered decision to establish a 10% export duty on soybeans and rapeseed, as well as the further blocking of exports due to the lack of regulatory documents and the inability to use benefits for producers, threatens not only the income of farms, but also the process of Ukraine's integration into the EU and investor confidence. Especially considering that the government does not yet consider the situation as a serious problem. This is reported by the EU Today publication.
"Since the beginning of September, traders and producers have effectively lost the ability to ship their goods abroad, breaking multimillion-dollar contracts and preparing to pay heavy penalties for idle vessels in ports. The reason is a poorly designed policy: the government and parliament recently introduced a 10% duty on soybean and rapeseed exports to "stimulate domestic processing," but failed to provide exemptions for small farmers who should have been able to sell their crops independently without paying the levy," the article says.
However, perhaps even greater, the authors believe, is the problem of violations of the norms of the Association Agreement with the EU and the principles of the World Trade Organization. The agreement directly prohibits Ukraine from introducing new permanent export duties. The parliament officially called the duty "temporary", but established it for ten years, which in practice is a permanent restriction. Unilateral export duties also contradict the basic principles of the WTO, including predictability and transparency of trade policy, the article says. The sudden change in the rules in the middle of the year sends one of the worst signals to foreign investors – not only in agriculture, but also in other sectors attractive for investment, from reconstruction to technology, the publication adds.
Agricultural associations also warn that if Kyiv does not abolish the duty, the European Union may respond by introducing import tariffs on Ukrainian goods, for example, they report that Europe is considering the possibility of introducing a 5.6% duty on imports of Ukrainian oil.
Journalists emphasize that events are unfolding against the backdrop of negotiations on a new trade agreement with the EU, which is to replace the Autonomous Trade Measures (ATM), which were in force until June 2025 since the beginning of the russian invasion. In exchange for wider market access, Ukraine is expected to gradually introduce EU production standards on animal welfare, pesticides, GMOs, veterinary rules and environmental protection, with full harmonization to be achieved by 2028.
Economists estimate that the end of the ATM regime will cost the agricultural sector about USD 1.5 billion, which is already a significant strain. "Yet the government in Kyiv added further pressure by imposing additional export duties on key raw materials in the middle of a fragile situation," the authors note.
They also add that the government has not done its homework: it has not developed a mechanism to distinguish between raw materials exported by traders (which should be subject to duty) and raw materials exported by producers (small or medium-sized farmers who are exempt from the tax). As a result, customs officials have decided that everyone must pay. In effect, the start of the export season has been derailed. At least 400,000 tons of rapeseed contracted for September, and another 300,000 tons for October, are blocked until the issue is resolved. In total, more than 3 million tons of the harvested crop are waiting to be exported.
The publication also cites insider comments about the meeting with government officials: officials from the relevant departments limited themselves to ritual phrases like "unfortunately, we cannot" and "unfortunately, we are not ready to take responsibility." "In effect, the responsible bodies openly acknowledged their inability to resolve a trade collapse of their own making," the article says.
"This approach sent a clear signal to all stakeholders, including European ones, that the Ukrainian authorities are not prepared to resolve the problems facing farmers and will continue to create obstacles for investors already operating in the country or considering entry. Moreover, it showed that breaches of the EU Association Agreement and WTO norms – and with them the status of a violator of international commitments with a damaged business reputation due to broken contracts – do not greatly trouble the government. If, during negotiations on a new trade deal with the EU, officials fail to secure reasonable terms of mutual trade, the soybean and rapeseed dispute may well be seen as one of the triggers leading to such a failure," the author concludes.
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