Brussels considers defending EU nations in Ukraine grain dispute

Brussels is considering whether to defend Poland, Hungary and Slovakia against a lawsuit filed by Kyiv, after the three countries broke EU rules to ban imports of Ukrainian grain that they said were flooding their markets. The unilateral bans have thrown the EU’s trade policies into disarray and are the most striking signal of disunity among the bloc’s 27 member states over support for Kyiv as it continues to fight against Russia’s invasion of Ukraine.

The European Commission, the bloc’s executive, had initially demanded Poland, Hungary and Slovakia reverse their bans, but is now working to “co-ordinate” their legal rebuttals to Kyiv’s filing of a suit at the World Trade Organization. In a written request sent to Poland, Hungary and Slovakia on Wednesday, seen by the Financial Times, the commission said that “as a matter of EU law” it will “act in these WTO proceedings initiated against member states”, referring to the complaint raised by Ukraine after the three countries imposed their curbs on imports of grain.

The commission added: “The immediate next step is for the commission to respond to Ukraine on these consultation requests on behalf of all three member states.” Discussions inside the commission regarding whether or not to defend Poland, Hungary and Slovakia were continuing on Wednesday evening, said a person with knowledge of the talks. The EU executive on Friday lifted a temporary embargo on grain exports from Ukraine into the bloc after it deemed that there was no longer a risk of supplies affecting farmers in five member states bordering the war-torn country, including Poland, Hungary and Slovakia. The ban covered wheat, rapeseed, sunflower seed and maize.

Brussels also struck a deal with Ukraine for Kyiv to ensure exports were not harming the five countries. Poland, Hungary and Slovakia responded by imposing unilateral bans, going against EU policy of acting in unison on trade matters and raising an awkward situation for the commission. The bloc’s executive must now decide whether to defend the three countries against its own agreement with Ukraine to lift the ban. The commission said member states were “not allowed to take unilateral measures on trade” and that it was “assessing the legally complex situation”.

“We are engaging with the concerned [member states] and will seek to work towards a constructive solution, so there would be no need to further pursue this case,” it said, adding that it could start its own infringement proceedings “to ensure that [member states] are in compliance with their obligations under EU law and their commitments in the WTO”.

As part of its agreement with Brussels to lift the temporary embargo on grain exports, Ukraine said on Monday that it would create a licensing system to “prevent market distortions in the five neighbouring member states”, according to a readout of a meeting between representatives from the commission, Ukraine and the five countries, which also include Romania and Bulgaria.

Romania has not applied unilateral measures but Bulgaria introduced a ban on sunflower seeds from Ukraine on Wednesday after days of protests by farmers. Ukrainian president Volodymyr Zelenskyy said at the UN General Assembly on Tuesday, referring to Ukraine’s grain exports, that “some of our friends in Europe play out solidarity in a political theatre”.

Tags: Ukraine, EU, Poland, restrictions