Ukraine will sue Poland, Hungary and Slovakia over agricultural bans

Kyiv will sue Poland, Hungary and Slovakia over their refusal to drop a ban on Ukrainian agricultural products, Ukraine’s Trade Representative Taras Kachka told POLITICO’s Brussels Playbook in an exclusive interview.

The bans by the three Central European countries are intended to protect their farmers from a surge in exports from grain superpower Ukraine, following Russia’s blockade of Ukrainian ports on the Black Sea. Poland’s ruling party is especially keen to stem the flow as its fortunes in an election on October 15 are closely tied to a rural support base, which is embittered by the increase in Ukrainian agricultural exports.

“It is important to prove that these actions are legally wrong. And that’s why we will start start legal proceedings tomorrow,” Kachka said Sunday evening, adding Kyiv was preparing to retaliate against Polish fruit and vegetable exports.

The three countries have rebelled against the European Commission, which last Friday decided to allow Ukrainian grain sales across the EU.

Poland, Hungary and Slovakia said they would impose their own bans on Ukrainian grain following the Commission’s decision to end its restrictions. “In our eyes these measures of Hungary and Poland is a statement of total distrust to the European Commission,” Ukraine’s trade chief said.

Kachka argued that the open defiance against Brussels by Poland, Hungary and Slovakia was not just an internal matter for the EU, but raised what he called “the biggest systemic concern” — whether international trade partners can trust that Brussels speaks for the EU.

“For many years, it’s been the European Commission who is the trade negotiator and trade policy institution for for the whole EU. And we used to work on this basis,” Kachka said, adding: “The systemic approach of Budapest and Warsaw of ignoring the position of the EU institutions in trade policy, I think that will be a problem for the EU in general, because there is no unity there.”

Kyiv plans to sue the countries at the World Trade Organization rather than via its own trade accord with the EU. “I think that all the world should see how member states in the EU behave towards trade partners and their own Union, because it can influence other states as well.”

While Slovakia simply extended the EU’s previous ban on four types of grain, Poland imposed additional bans on Ukrainian flour and feed over the weekend. Hungary, Kachka said, is going even further and banning an additional 25 products that had not been discussed before, including meat.

“These arbitrary prohibitions are ridiculous,” Kachka said. “I think that Hungary here is making a political statement that it wants to block trade with Ukraine and as well disregard Brussels completely. And that’s why I think that this is a very bold movement against both of us from Budapest.”

While Hungary’s additional bans are mostly symbolic, given that Ukraine does not export much beef or pork to the country, Poland’s measures will affect a significant part of Ukraine’s exports, Kachka said. Unless Warsaw drops these additional bans, “we would be forced to retaliate on the additional products, and would prohibit the import of fruit and vegetables from Poland.”

The governments in Budapest and Warsaw have said they are acting to protect their farmers from a surge in Ukrainian products that has depressed prices but Kachka retorted that this reasoning was flawed: “Poland’s ban will not help farmers, it will not affect prices, because prices are global — what they are doing is based on public opinion.”

An EU official told Playbook that Brussels hoped to solve the fight by getting Kyiv to impose its own restrictions on exports in the case of sudden surges.

Asked about that potential deal, Kachka said Kyiv was ready to “take on the responsibility to ensure that export from Ukraine is not creating any tsunami in neighboring countries,” and would impose a system of “real time” export licenses for grains to both “slow down” the exports to neighboring countries and allow Ukraine to “react rapidly” if a surge is detected.

Tags: grain, EU, Poland, agricultural products, ban, Hungary, Slovakia, World Trade Organization, restrictions, Ukraine, exports