What will be the losses for Ukraine from the grain crisis? A crisis that has long gone beyond the grain trade and now threatens all Ukrainian agricultural exports to the EU?

In the past week, five countries – Poland, Hungary, Slovakia, Bulgaria, and Romania – have introduced absolutely unlawful restrictions. Ukraine, on the other hand, was supported by the European Commission.

However, the trilateral negotiations between the representatives of these five countries, Ukraine, and the EU leadership

have led to, at first glance, a not-very pleasant outcome for Kyiv.

Let's try to understand how Brussels sees the ways to resolve the grain crisis. Where are the pros and cons for Ukraine in this scenario?

Ban everything to allow something later

The grain crisis was triggered by friendly Poland, which came as a surprise for Kyiv. Protests by Polish farmers regard Ukrainian grain have been ongoing for several months. It seems that Warsaw was controlling the situation for a long time.

We should point out that selling Ukrainian agricultural products in the EU is absolutely legal. This is provided for in the existing Association Agreement between Ukraine and the EU, as well as by EU-approved autonomous preferences that temporarily lifted all customs restrictions for Ukrainian goods on the EU market.

The problem is that before the full-scale invasion of Russia, Ukrainian grain was mainly exported by sea. Ukraine needed an alternative way to export it after the blockade of the ports. The need for transit across the EU persisted even after the "grain corridor" launch because this route is not always reliable due to Russia's attempts to block its operation. Therefore, Kyiv saw the solution in expanding the transit capacity of Eastern European ports.

However, Warsaw decided differently.

The threat of even a partial sale of Ukrainian grain on the Polish market openly scares local farmers. The Polish government, before parliamentary elections, must preserve their loyalty at any cost.

Accusing Ukrainians of mass imports, Warsaw did not risk using legal mechanisms of trade protection. Instead, on April 16, the Polish government announced a ban on all Ukrainian agricultural exports and its transit.

Obviously, Warsaw had prepared this decision in advance. That is why other neighbours of Ukraine immediately announced similar bans: first Hungary, then Slovakia, and then Bulgaria and Romania.

The only Central European EU member state that has abandoned such restrictions is Czechia. This unity significantly strengthens Poland's negotiating position and its allies in defending such a ban at the EU level. It no longer looks like a pre-election initiative of Poland's ruling party but rather as a common position of almost all countries in the region.

At the same time, Warsaw has shown its readiness to make certain concessions. In particular, it quickly agreed to cancel the transit ban to calm Kyiv down. However, Kyiv has gone into conflict, raising the issue of the ban at the EU level.

One ban instead of five

Why should negotiations on lifting the export ban be held with the European Commission and not the national governments?

First of all, Ukraine does not have separate free trade agreements with Poland, Hungary, or other countries.

This agreement is signed with the EU and should apply throughout the European Union without exception.

On the other hand,

the situation has become challenging not only for Ukraine but also for the EU.

European legislation provides for trade issues to be handled by national governments rather than EU structures. Therefore, only the European Commission has the right to impose restrictions. Thus, the decision of the five Central European countries undermines Brussels' authority.

The relevant trilateral talks (European Commission, Ukraine, "the five") took place on April 19. However, the outcome may appear extremely negative for Kyiv.

The European Commission proposes 100 million euros from its funds to compensate farmers' losses. However, instead of unilateral restrictions, the EU will introduce "preventive measures" against some Ukrainian agricultural products.

By June, they would like to ban four positions of Ukrainian agricultural exports (wheat, corn, rapeseed, and sunflower) with transit instead.

This is not the final decision of the European Commission but only a proposal. The governments of the "five" should agree or abandon it until Tuesday, April 25.

It is not certain that all countries will agree to this, as Poland wants to include chicken, eggs, fruits, sugar, and honey in this list. Hungary also wants to ban chicken, honey, flour, and Bulgaria - flour and oil.

Ukrainian negotiators are convinced that if this compromise is agreed upon, part of the problem will be solved. Because now Kyiv will have to deal not with five different governments but with the European Commission, which will be much easier to negotiate with.

If the negotiations drag on, the EC will have to pressure member states, using not only "carrots" but also "sticks."

However, the question remains open - why does replacing five national bans with one European one look to Ukrainian negotiators as an improvement?

Concession for common interests

The most surprising thing in this situation is that the restriction announced by the European Commission also looks like it clearly contradicts the Association Agreement with Ukraine.

Moreover, this restriction exists only as a political decision, which still needs to find a legal basement.

According to a participant in the negotiations from the Ukrainian side,

Kyiv will turn a blind eye to such a violation of the Agreement by the EU only in exchange for certain preferences.

It also needs a guarantee that the restrictions will not be extended after June.

That is why Kyiv proposes to formulate the reason for temporary restrictions "in connection with a sharp change in trade routes, which caused problems for producers in some countries."

This norm protects us from accusations of mass imports (especially since the export volumes for some items, like corn, remain as in previous years).

Most importantly, the government hopes that this wording does not make it possible to extend the restrictions.

Kyiv admits the logistical problem. It agreed to talk with the EU to eliminate it. If the EU has not dealt with it within the specified time (until June), then it should no longer be a problem for Ukrainian companies.

* * * *

Will Ukraine, as the government claims, manage to deal with the grain crisis with minimal problems? It is highly likely.

Moreover, Ukraine is particularly interested in solving this problem as soon as possible. Otherwise, it can ruin our relations with the European Union for a long time. It can create additional problems on the final stretch before joining the EU.

However, this logic will work only on one condition.

If the European Commission does succeed in convincing the governments of the "five" to abandon the restrictions they introduced, this undermines the fundamental principles of the EU's work.

Otherwise, the problem will go far beyond Ukraine's trade relations with Poland or Slovakia. Torpedoing the powers of the European Commission can become a problem for all European countries without exception.

Written by Yurii Panchenko,
Editor, "European Pravda"