Vadym Prystayko, Ukrainian Deputy Prime Minister, who oversees Ukraine’s European and Euro-Atlantic integration, recently said in an interview with Deutsche Welle that he needs to revise the terms of the association agreement with the European Union. He stressed that this is expected by Ukrainian producers, dissatisfied with the size of quotas, through which Brussels regulates the volume of exports.
Apparently, Kyiv begins paying more attention to the economic aspects of integration with Europe. Because of its integration aspirations, Ukraine faced Russian aggression in 2014 (and continues to suffer from it), having lost a fragment of the country's territory, comparable in size to Belgium.
Prystayko also said that at the request of Germany, Austria, the UK, or Finland, Kyiv is ready to send labor migrants even during a pandemic. 15,000 seasonal workers are ready to go to the latter country in the coming months.
Who will be the first to get abroad
We are talking primarily about quotas for Ukrainian agricultural and food products. For the most part, Ukraine manages to select them at the beginning of the year. For example, honey producers reached their annual limit of 6,000 tons in January. If they wish, they can import more, but then they will have to pay a fee, and this often blocks Ukrainian companies from entering the European market.
The situation also concerns producers of wheat, sugar, corn, and meat, which are waging real wars, competing who will be the first to get abroad to fit into the European quota. It’s enough to mention that Ukraine, which exports about 20 million tons of wheat annually, will be able to supply to the EU without duty only a little more than 900,000 tons.
Consequently, it will have to fight for other markets, such as Egypt, which is one of the main importers of wheat from Russia. That, in turn, introduced a ban on the import of Ukrainian food products back in 2016.
“Because of the epidemic, Ukraine has faced serious economic problems. Ukrainian entrepreneurs, especially those who are focused on the European market, are trying to put pressure on government officials,” MP from the Servant of People faction Iryna Vereshchuk said in her commentary for Rzeczpospolita.
On Monday, the union of European farmers and agricultural cooperative workers COPA COGECA opposed the increase in quotas for the import of Ukrainian food products and appealed to the Directorate General of the European Commission for Trade in this regard.
“The common agricultural policy was the effect of fear that swept the West during the siege of West Berlin. This approach was designed to ensure the food self-sufficiency of Western democracies. During the Cold War, when the Soviet Union was a major exporter of grain, subsidizing agriculture under the Common Agricultural Policy was at least a rational basis, it was related to security considerations,” Andrzej Sadowski, member of the National Development Council under the President those of Poland and the head of the Adam Smith Center, explains.
“In a situation where there is neither the USSR nor the threats associated with food, the preservation of the Unified Policy results in an increase in food prices, limits the volume of their production and blocks trade with agricultural countries such as Ukraine,” he adds, saying that now “the fate of Ukrainian democracy is in the hands of the EU.”
Now the European Union is the main trading partner of Ukraine. Russia, which before the revolution on the Maidan ranked first, moved to third place, losing to China. In the first half of 2019, the volume of trade between Ukraine and the European Union amounted to a little more than $ 26 billion, of which more than 14 billion were earned by European countries that supply goods to the Ukrainian market. In 2018, the negative trade balance of Ukraine with the EU amounted to more than $ 4 billion.
“The numbers indicate that while the EU is benefiting from the Association Agreement more than Kyiv, not to mention the fact that Ukrainian workers are saving the economy of individual European states. Everything should have been the other way around,” says Iryna Vereshchuk.
Famous Kyiv economist Oleksandr Okhrimenko says that issues in cooperation with Europe arise, and sometimes its Ukraine’s fault. “Recently, a serious Swedish investor wanted to invest in waste processing enterprises there. The oligarchs pressed the authorities, so the Swedes were refused. Most of the sectors of the Ukrainian economy are divided between the oligarchs,” says Okhrimenko. “Unfortunately, this principle works in Ukraine: and we would not do it ourselves, and we will not let the others do it.”
Read the ogirinal text at Rzeczpospolita