EU prepares emergency restrictions on grain imports from Ukraine

Brussels is preparing emergency restrictions on Ukrainian grain imports to five member states close to the war-torn country, bowing to pressure from Poland and Hungary after they took unilateral steps to pacify local farmers.

European Commission President Ursula von der Leyen said the bloc would take “preventive measures” as EU officials tried to respond to several countries, including some of Kiev’s staunchest allies, breaking ranks to defend their farmers. from the influx of cheap grains.

The steps under discussion would ban imports of those products until June to the four member states that border Ukraine, plus Bulgaria, except for re-export to other EU member states or parts of the world, a senior EU official said.

Von der Leyen said in a letter to the leaders of Poland, Hungary, Romania, Slovakia and Bulgaria that the measures would “immediately counteract” the deteriorating situation of their wheat, corn, oilseed and sunflower seed producers.

The highly unusual move is an attempt to regularize a series of unilateral moves by a group of Eastern European member states, which challenged the EU’s central powers over trade policy.

The commission said it will only take action if governments abandon their current measures, which they have not yet agreed to do. It will do so by drawing on seldom-used power, contained in the measure that liberalized trade with Ukraine, and will limit the new safeguards to just a few member states rather than the entire bloc.

Poland, Hungary, Bulgaria and Slovakia are among those who have announced bans on Ukrainian food products in recent days, despite warnings from Brussels that their actions were potentially illegal.

The countries will receive 100 million euros of EU funds to compensate farmers, who have been in riot.

After a meeting with the five countries on Wednesday night, Trade Commissioner Valdis Dombrovskis and Agriculture Commissioner Janusz Wojciechowski said they were looking at a “quick fix.”

In a joint statement they said: “We underline the importance of swiftly pursuing a common EU approach, rather than unilateral solutions to avoid multiple bans and solutions that put the internal market at risk.”

The EU has removed tariffs and quotas on food products from Ukraine, an agricultural powerhouse, after Russia’s full-scale invasion last year. As a result of fears that the world might starve, the regime was meant to last until the next June.

However, much of the Ukrainian grain entering the bloc remained in its neighboring countries, driving down prices locally. The EU wants to extend the wartime trade regime with Ukraine when it expires, but the revised version will have stricter provisions that will allow it to take steps to “safeguard” its own market more quickly in the future, von der Leyen’s letter says.

Brussels will organize convoys of trucks, trains and barges to transport the grain to ports where it can be sent to countries in need, another official said. It would also increase the capacity of the Danube River.

Many traders have refused to pay for this transport because it costs more than traditional maritime trade through the Black Sea.

It is not clear how this would be funded and organized. Spain had tried to subsidize a train to transport grain across the continent, but it was much cheaper to import it from Latin America, the official said.

Norbert Lins, chairman of the European parliament’s agriculture committee, told the FT that Brussels should buy the grain and send it to third countries. “The commission has the tools and should use them,” he said.

In his letter, von der Leyen said that Brussels would investigate the situation of other “sensitive products”, following a request from Poland, which also banned meat imports.

The five countries originally wrote to you in late March. Konrad Szymański, Poland’s former European affairs minister, said Brussels had been slow to act.

“Von der Leyen received what was an urgent letter [from the governments affected] and if he had responded in two or three days instead of now, we probably wouldn’t have that problem,” said Szymański, who now works for the Polish Economic Institute, a Warsaw think tank.

Additional reporting by Raphael Minder in Warsaw and Marton Dunai in Budapest

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