Evaluation of the results and analysis of the impact of the DCFTA with the EU on agricultural trade in Ukraine

- In the beginning of the COVID-19 pandemic, the liberalized trade regime in the DCFTA with the EU was not a factor in stabilizing Ukraine's agricultural trade - in the context of growing agricultural exports to non-EU countries, agricultural exports to the EU decreased by 10.7 % in 2020 compared to 2019. The EU imposed no additional restrictions on agricultural trade with Ukraine during the pandemic, however the fall was caused by a decrease in demand on the EU market, complications in supply logistics and a drought in Ukraine.

- The share of exports of goods with higher value added has not changed significantly during 2016-2020 and remained relatively low (except for vegetable oils). The average share of the top two raw export commodities - grain and oilseeds - in agricultural exports to the EU decreased slightly from 59.9 % in the period 20092013 to 52.6 % in the period 2013-2020.

- The DCFTA with the EU has not yet resulted in significantly reducing the share of agricultural raw materials (or low value-added primary goods) in Ukraine's exports to the EU. The average share of the two main raw export goods - grain and oil crops - in agricultural exports to the EU in the period 2016-2020 exceeded 50 %.

- The FTA with the EU has not yet led to a significant diversification of Ukrainian agriculture export to the EU. However, during 2016-2020, the share of the top four agricultural export HS chapters amounted to 84.8 % annually on average, against 90 % in 2009-2013, which indicates the beginning of diversification of trade within the framework of the FTA.

- During 2016-2020, both the number of TRQs that were completely used by Ukrainian exporters and volumes of export above the tariff quota limits increased. Exports of corn, honey, apple and grape juices, processed tomatoes and poultry significantly exceeded tariff quotas.

- Export of Ukrainian agricultural products to the EU, including those produced by small and medium-sized agrobusinesses, is restrained by small TRQs levels, by the high EU import duty rates applied to quantities imported from Ukraine outside tariff quotas, by long duration and high costs of procedures for obtaining certificates for export of livestock products to the EU.

- During the first 5 years of DCFTA implementation, there was no significant expansion of imports of agri-food products to the domestic market of Ukraine. This happened not so much because of the high competitiveness of domestic producers, but due to the low purchasing power of the population.

- The implementation of the Association Agreement did not have a significant downward impact on domestic prices for agri-food products in Ukraine.

- The lowering of the tariff protection of the domestic market did not significantly influence on domestic production of agri-food products, which remained stable, except for the production of grape wines, which decreased during 2016-2020.

- Due to the implementation of the Association Agreement, the EU has increased its share in the import of agri-food products to Ukraine. However, for some commodity groups there was both absolute and relative decrease in imports. This happened due to competition from other importers, as well as due to import substitution processes.

Further study of the results of the DCFTA with the EU for agricultural trade in Ukraine will take into account the shocks caused by russia's military aggression against Ukraine in 2022, which complicated Ukrainian exports during the war, and the consequences of temporary (during the year) trade liberalization supplementing trade preferences for Ukrainian products under the Association Agreement between the European Union and Ukraine.

agricultural food market trade

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