Tag: Imports

As Russia once again bombards and blockades Ukraine’s Black Sea ports — through which the country exports its vast agricultural produce — Poland and Hungary threaten to cut off the country’s western exit routes.

Poland will unilaterally block trade with Ukraine if the European Commission fails to extend temporary restrictions on grain imports at least until the end of the year, Prime Minister Mateusz Morawiecki told a meeting of agriculture ministers from five Eastern EU countries in Warsaw on Wednesday.

“I want to make it clear,” Morawiecki told reporters, “we will not open our border. Either the European Commission will agree to jointly work out regulations that will extend this ban, or we will do it ourselves.”

Hungarian Agriculture Minister István Nagy echoed Morawiecki, saying his country would “protect Hungarian farmers with all its means.”

Days after killing a deal to allow Ukraine to export grain across the Black Sea, Moscow unleashed a wave of attacks on the Ukrainian ports of Odesa and Chornomorsk — two vital export facilities — damaging the infrastructure of global and Ukrainian traders and destroying 60,000 tons of grain.

The EU’s top diplomat, Josep Borell, called Russia’s escalating offensive “barbarian” on Thursday. “What we already know is that this is going to create a huge food crisis in the world,” he told reporters in Brussels, adding that EU countries needed to step up alternative export routes for Ukraine.

Ukraine is one of the world’s biggest exporters of corn, wheat and other grains. Following Russia’s invasion and blockade of its Black Sea ports last year, the EU set up land export routes through its territory.

In the year since, export corridors set up by the EU called ‘solidarity lanes’ have carried about 60 percent of Ukraine’s exports — mostly along the Danube to the Romanian port of Constanța. The remaining 40 percent has trickled through the country’s own ports under the now-defunct Black Sea Grain Initiative brokered by the U.N. and Turkey.

But the opening of the overland routes also led to an unprecedented influx of cheap Ukrainian grain into neighboring EU countries — Romania, Poland, Hungary, Bulgaria and Slovakia — which was bought and resold by local traders instead of being exported further afield. The glut has put the solidarity of the bloc’s Eastern members with Ukraine in its war of defense sorely to the test.

With an election looming this fall, Poland sought to appease local farmers — a vital constituency for the right-wing government — by closing its border this spring to Ukrainian imports. Hungary, Slovakia and Bulgaria followed suit while Romania, which didn’t impose its own restrictions, joined the four in calling for restrictions at EU level.

In May, the five countries struck a deal with the Commission to drop their unilateral measures in exchange for €100 million in EU funding and assurances that Ukrainian shipments would only pass through the five countries on their way to other destinations. 

It’s these restrictions, which will expire on September 15, that the five countries want extended.

Other EU countries have criticized the Commission’s leniency towards the five Eastern troublemakers, saying the compromise undermined the integrity of the bloc’s internal market.

Open the borders

Borrell said that, instead of restricting trade, the EU should respond to Russia’s Black Sea escalation by opening its borders further.

“If the sea route is closed, we will have to increase the capacity of exporting Ukrainian grain through our ports, which means a bigger effort for the Ukrainian neighbors,” he said before a meeting of EU foreign ministers.

“They will have to contribute more, opening the borders and facilitating transport in order to take the grain of Ukraine from the Black Sea ports. This will require from Member States more engagement. We have done a lot, we have to do more.”

Separately on Thursday, Ukrainian Foreign Minister Dmytro Kuleba called on the EU to make “maximum efforts” to facilitate grain exports from the country.

“While Russia destroys the Grain Initiative, attacks Ukrainian ports and tries to make money on rising food prices, Ukraine and the European Union should make maximum efforts to simplify food exports from Ukraine, particularly by increasing the capacity of alternative transport corridors ‘Solidarity Lanes’ as much as possible,” he said.

During Wednesday’s meeting in Warsaw, agriculture ministers from the five EU countries signed a declaration calling on Brussels to extend and expand the trade restrictions, amid concerns that Russia’s renewed Black Sea blockade could further pressure their domestic markets.

Only Poland and Hungary threatened to take unilateral action if the restrictions were lifted.

Premature

Despite the threat, a senior Commission official said on Thursday it was “premature” to say whether there was a need to extend the restrictions beyond the September 15 deadline.

In recent months, officials have stepped up surveillance and customs checks, and Romania and other countries have significantly increased investment in infrastructure and investment to facilitate the transit of grain through their countries and to other markets, the Commission official said.

But in the year since the land-based export routes were opened, Poland has taken no major steps to improve its own infrastructure or the capacity of its Baltic ports. Analysts say it is unlikely the country will be able to repeat the feat come this summer’s harvest. The Polish government has repeatedly blamed Brussels for not providing enough help.

Despite the ongoing trade dispute, officials in Kyiv have been careful not to openly criticize their counterparts in Warsaw.

That’s because Poland has played a leading role in supporting Ukraine since the war broke out, acting as the main transit point for Western weapons and sending plenty of its own. It has also taken in millions of Ukrainian refugees.

“We highly appreciate all the work done so far within the solidarity lanes by the European Commission and neighboring member states,” Ukraine’s ambassador to the EU, Vsevolod Chentsov, told POLITICO.

Still, he added: “Statements by some member states of the need to extend the ban on the export of Ukrainian agrarian production [cause] serious concerns.” Without naming Poland he said that this “politicizes” the practical reality of what is a logistical challenge “jeopardizes the effectiveness of the solidarity lanes.”

Jacopo Barigazzi contributed reporting