In 2014, Ukraine and the EU signed a free-trade agreement in the form of an Association Agreement that contains a Title IV which relates to trade and trade related matters and has been applied since 1 January 2016. Article 29 of the Association Agreement provides for the progressive elimination of customs duties in accordance with the schedules included in the agreement and envisages the possibility to accelerate and broaden such elimination.
Following a request of Ukraine, the European Commission has decided to put forward a proposal introducing the following trade-liberalising measures for products originating in Ukraine:
- the temporary suspension of all outstanding tariffs under Title IV of the Association Agreement between the EU and Ukraine, which concerns three categories of products: (i) industrial products subject to duty phase out by the end of 2022, (ii) fruits and vegetables subject to entry-price system, and (iii) agricultural products and processed agricultural products subject to tariff-rate quotas;
- the temporary non-allocation of anti-dumping duties on imports originating in Ukraine;
- the temporary suspension of the application of the common rules for imports safeguards (as per Regulation 2015/478) on products originating in Ukraine.
These measures should apply for a period of one year as from the entry into force of the Regulation.
As Ukraine faces difficulty to access to its ports on the Black Sea, the objective of these temporary measures is to maintain the trade position of Ukraine with the rest of the world. It also aims to foster the trade relationship between Ukraine and the EU by facilitating overland logistics and increasing the degree of market liberalisation. It is worth noting that Ukrainian exporters would still be required to prove the preferential origin of their product, as set forth in the Association Agreement between the EU and Ukraine, to benefit from the measures above.
The European Parliament and the Council will have to approve the proposal before this Regulation becomes effective.