Kyiv acts on ‘compromise’ plan after filing WTO trade complaint over food ban

KYIV (Reuters) – Ukraine appealed to three neighbouring countries in the European Union on Tuesday to embark on “constructive dialogue” to end a dispute over agricultural trade, and approved what it called a “compromise scenario.”

Poland, Slovakia and Hungary announced restrictions on imports from Ukraine on Friday after the European Commission decided not to extend a ban on sales into Ukraine’s five EU neighbours, which also include Romania and Bulgaria.

The Polish, Slovak and Hungarian governments said their actions were intended to protect their farmers and national economies from a surge of grain and food imports from Ukraine since its invasion by Russia last year.

A World Trade Organization spokesperson confirmed that Ukraine had taken the first step in a trade dispute by filing a complaint to the global trade body.

“We can confirm that a request for consultations was received Monday evening. Further information will be provided once the request has been circulated to our members,” the spokesperson said in an emailed response to a Reuters request for comment.

He did not name the countries although Kyiv had previously said the complaint targeted Poland, Slovakia and Hungary.

Ukrainian Prime Minister Denys Shmyhal later spelled out Kyiv’s position in comments on the Telegram messaging app.

He confirmed that Kyiv would impose retaliatory import restrictions on certain categories of goods from Poland and Hungary if they do not lift their unilateral bans. Ukraine, meanwhile, is conducting an investigation to show that the unilateral bans are discriminatory, he said.

Shmyhal said Kyiv had proposed to the European Commission, the EU executive, and neighboring countries an export control plan on four groups of farm products to prevent market distortions — a plan he described as a compromise scenario.

“We once again call on our neighbours to abandon harmful and illegal restrictions, political populism and embark on the path of constructive dialogue, from which everyone will actually benefit,” he said.

EXPORT LICENCES

Signalling its intention to move forward with the compromise proposal on Tuesday, the Ukrainian government approved the introduction of export licences for a number of agricultural products for export to Ukraine’s five EU neighbours.

“The government of Ukraine approved a new procedure for exporting certain types of products to certain EU member states,” the agriculture ministry said in a statement.

“It stipulates that four crops — corn, rapeseed, sunflower seed, wheat, which are exported to 5 countries — must be licensed by the economy ministry in agreement with agriculture ministry.”

The ministry said Kyiv would agree on the list and volume of products with importing countries, which, in turn, would determine whether they are ready to accept these goods, in what volumes and within what timeframe.

“Only then do we issue permits to our companies to export certain products. Ukraine controls its exports and coordinates them with the receiving countries,” it added.

Russia’s war on Ukraine has disrupted Kyiv’s ability to export agricultural products through its Black Sea ports, leading to a surge in shipments via road, rail and barge through its five European Union neighbours.

Farmers in those countries said these shipments were distorting local markets, leading the EU to approve trade restrictions – while still allowing transit – until Sept. 15.

The EU did not extend those restrictions last Friday, but Warsaw, Bratislava and Budapest announced their own restrictions on imports.

Spain’s agriculture minister on Monday said the bans seemed illegal while his French counterpart said they called European solidarity into question.

(Additional tporting by Emma Farge and Gabrielle Tetrault-Farber in Geneva, and by Anna Pruchnicka, Editing by Timothy Heritage and William Maclean)