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Romanian Port Prioritizes Romanian Farmers Over Ukrainians Farmers
Since early last year, EU member states have generally been sympathetic and supportive to Ukraine due to Putin’s invasion which he nicknamed as a “special military operation”, Romania and other member states in the eastern part of the bloc however have gotten testy over agriculture. The latest development on the matter is attempts by Romania to prioritize exports from Romanian farmers over Ukrainian at the port in Constanta.
The United Nations arranged an agreement to allow Ukraine to export goods from three ports on the Black Sea (Odesa, Chornomorsk and Yuzhny/Pivdennyi) through the Bosporus Strait known as the Black Sea Grain iniative, yet Constanta remains the most popular port used to export Ukrainian goods. Since the invasion started, the Constanta port has exported a third of Ukrainian grain. The Port of Constanta usually handles around 25 million tons of grain annually. Romanian farmers are expected to produce 21 million tons of grain meanwhile Ukrainian farmers will produce around 45 million tons.
Eastern EU Member States Banned Ukrainian Products
Earlier this year, several member states and the European Union squared off over the member states banning the importation of Ukrainian farm produce. Poland, Hungary, Slovakia, and Bulgaria all banned the importation of Ukrainian products into their nations. The European Union denounced the actions of these member states and claimed they were counterproductive and illegal. The European Union and not member states has the competency of trade policy. The member states pointed out however that their national markets were being flooded with cheaper products with Ukraine which threatens the livelihood of their own farmers.
The European Union attempted to facilitate the exportation of Ukrainian agricultural products through solidarity lanes when Russia blocked most exportation after the start of the invasion. Eastern EU member states have complained however that instead of Ukrainian products being exported around the world through the solidarity lanes, they stayed in Eastern EU member states putting cheaper Ukrainian products in competition with local products. EU diplomats argued that this is not in solidarity with Ukraine, seemingly ignoring the plights of some farmers in the EU. The image above shows that Ukrainian products were moving through the four nations which placed bans on Ukrainian agricultural products. Fortunately, the European Union realized the problems faced by EU member states near Ukraine and tariff free imports of wheat, maize, rapeseed and sunflower seed to Bulgaria, Hungary, Poland, Romania, and Slovakia have been temporarily banned. This ban was extended until September 15th which is several months into the harvest season and should benefit farmers in these five member states.
Russian President Putin himself has criticized Ukraine for exporting the majority of its food to wealthier nations than those in need. 47 percent of Ukrainian agricultural goods were exported to high income nations and 26 percent of agricultural goods were exported to upper middle-income nations. Considering Putin’s invasion has created challenges for Ukraine to export its goods this criticism should not be taken seriously yet viewed as an attempt by Russia to deflect attention from the war and potential war crimes committed. The ban however of the importation of wheat, maize, rapeseed and sunflower seed allows the goods to be transported through the five member states and sent to low-income nations, making Putin’s criticism of Ukraine a moot point.
Potential Black Sea Grain Initiative Collapse
The concern over the Port of Constanta being overwhelmed by Ukrainian grain can be traced back to the concern that the Black Sea Grain Iniative will collapse. The agreement originally was set to expire May 17th, but this deadline was extended by two months. This is still a problem for Ukraine however as the harvest season starts in July, making the new deadline relatively useless. In order to circumvent relying on the Black Sea Grain Iniative, Ukraine needs to find other ways to export its grain and other agricultural products. As evident however from the capacity of the Constanta port, Ukraine will need a strategy involving multiple ports. The original Black Sea Grain Iniative agreement has helped lower food prices worldwide, showing that this agreement is not only important in Ukraine but also worldwide. Ukraine however is still producing 30 percent less food than it did before the invasion started.
What people may not realize is that part of this deal is that while Ukraine gets to export products through the Black Sea, the United Nations had to agree to helping export Russian food and fertilizers for three years. The European Union has passed numerous rounds of sanctions in an attempt to put financial pressure on Russia to end the invasion of Ukraine, yet this can ultimately further harm Ukraine if Ukraine is subsequently not allowed to export its agricultural products. The European Union sanctions do not specifically target Russian food and fertilizer exports yet because some of the sanctions target payments, logistics, and insurance it has made Russian food and fertilizer exports more difficult.
Higher Costs Of EU Agriculture
These EU member states first attempted to ban products from Ukraine due to an inability to compete at the same price point. While trade is an exclusive competence of the European Union, a lawyer who focuses on EU and international trade claims there is a work around on the issue. Mats Cuvelier states that EU member states are permitted to prevent the importation of agricultural products on the basis of not meeting the same standards EU products must meet. Slovakia has been successful in this in preventing Ukrainian agricultural products into the nation on the basis that these Ukrainian products have traces of pesticides that are not legal in the European Union. If the European Union is going to have high environmental standards for member states, it needs to have the same standards for imported products as well otherwise EU farmers will struggle to compete meanwhile EU consumers buy products could still purchase products produced in a manner that does not protect the environment as the EU desires. As inflation is still negatively impacting prices across the board, it is possible that consumers will be tempted to buy the cheaper products rather than those produced in accordance with higher environmental standards.
The European Union should do what it can to support Ukraine, but this cannot come at the expense of EU workers. There needs to be a balance and farmers need to feel as if their national governments and the European Union respect and support them. The European Union cannot require its own member states to adhere to environmental standards which add to the cost of production only to allow goods from Ukraine or even other nations to be imported that do not meet these same standards. The invasion of Ukraine shows that the European Union’s role as a global actor is still limited in some respects.