Brussels, 14/04/2014 (Agence Europe) - The adoption by the Council on 14 April of the regulation granting unilateral trade preferences to Ukraine paves the way for temporary cuts in customs duty for EU exports of goods, pending the signature and then the entry into force of the free-trade agreement.
On Monday, European foreign affairs ministers enshrined the regulation providing for the temporary reduction or removal of EU customs duty, in line with the list of concessions featuring in the commercial plank of the association agreement between the EU and Ukraine, which was partially signed on 21 March. It is to enter into force on 23 April, the day after it is published in the Official Journal of the EU, and will apply until the entry into force or temporary implementation of the association agreement. But in any case, it will cease to apply on 1 November 2014. According to the Commission, the temporary reduction of nearly 98% of European customs duties, provided for in the framework of the future agreement, will save Ukrainian exports nearly €500 million a year.
The regulation is based on the early application of the provisions of the agreement in the field of the trade in goods. It provides for a tariff cut for 82.3% of Ukrainian agricultural products and the opening-up of quotas for sensitive products (cereals, pork, beef, poultry). It also brings in preferences on 83.4% of Ukrainian exports of processed agricultural products, with the remaining 15.9% having been partially liberalised by quotas. Lastly, it provides for tariffs to be removed from 94.7% of Ukrainian industrial products.
Finally, the regulation comes with safeguards. Firstly, it provides safeguard measures to prevent any risk of exports of fraudulent Ukrainian products: Ukrainian exports will have to comply with EU provisions on origin labelling and Kiev must guarantee that goods from third countries do not enter the EU via Ukraine disguised as Ukrainian products. Secondly, it gives the EU the right to reimpose tariffs, if imports of Ukrainian goods inundate the EU and bring about (or threaten to bring about) major difficulties for European producers of the same products.
“This decision not only expresses solidarity with the Ukrainian people, it also shows that the EU is willing and capable to take immediate steps to improve the situation of our eastern neighbours (…). This trade measure will be an important component of the EU's package to help Ukraine during this difficult period. Ukraine doesn't need to reciprocate by removing its own customs duties on imports from the EU, but it mustn't raise them”, commented Trade Commissioner Karel De Gucht.
The EU represents around one third of Ukraine's external trade. In 2012, Ukraine exported €14.6 billion worth of goods to the EU, and imported goods worth €23.8 billion. (EH)