The European market fully opened for Ukrainian goods on May 15. The EU Council approved on April 14 the European Commission’s decision to unilaterally reduce duties for Ukrainian goods entering the European market. The decision was to take effect within two weeks from the date of publication in the designated EU journal. The publication occurred on April 22. Thus, the EU set at zero over 90 percent of duties and fees for Ukraine, starting on May 15. Reports say that this regime will be in effect until November 1, after which date presence of Ukrainian products on the European market will be regulated by the terms of Ukraine’s Treaty of Accession to the Free Trade Area with the EU.
The EU said that these unilateral preferences for Ukraine could bring up to 500 million euros of revenue to Ukrainian businesses, with around 340 million expected to come from increased exports, and about 97 million from the abolition of export duties.
European duties have been lowered by 94.7 percent for Ukrainian manufactures and by 82.2 percent for Ukrainian agricultural exports. However, instead of complete removal of duties for goods such as groats, beef, pork, and poultry, the EU will apply duty-free quotas, allowing export of Ukrainian goods up to certain quantities.
The first producers to indicate their willingness to export their products to Europe were Ukrainian poultry companies. When it became known in April that Europe would open unilaterally its market to Ukrainian goods, chairman of the board of directors of the Union of Poultry Breeders of Ukraine Association Oleksandr Bakumenko assured the nation that Ukrainian businessmen would be able to supply the European market with up to 36 tons of duty-free chicken daily starting on the following week. “Within a few days, we will start exporting, we already export, but the most important thing for us today is that we will have the duty set at zero, which means good economic conditions for shipments,” Bakumenko assured.
The chairman noted on May 15 that due to the opening of the European market, companies operating in poultry industry plan to export about 170,000-180,000 tons in 2014. For example, he said that Ukraine sold abroad 34,000 tons of chicken in the first quarter of 2014, up 14 percent year-on-year. Bakumenko noted that the growth occurred despite the virtual closure of the Customs Union market.
The Government Commissioner for European Integration Valerii Piatnytsky believes that Ukrainian farmers and food producers will benefit most from trade liberalization with the EU. However, the commissioner avoided any specific forecasts: “Do not count your chickens before they are hatched. For me, it is now a problem with many unknowns. It is impossible now to try to analyze the situation relying on some past trends, because in the past we never came even close to the trend which is called war.”