April 23, 2024

(Bloomberg) — Ukraine moved to challenge unilateral grain-import bans imposed by three of its European Union neighbors and to weigh retaliatory measures as a dispute between wartime allies escalates.

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The government in Kyiv filed a complaint with the World Trade Organization on Monday over measures taken by Poland, Slovakia and Hungary, according to a statement on the Economy Ministry’s website.

“For us, it is crucial to prove that separate member states cannot prohibit imports of Ukraine’s goods, ” said Economy Minister Yulia Svyrydenko. “At the same time we hope that these countries will lift their restrictions and won’t have to be in courts for a long time.”

The three Ukrainian neighbors, some of which have been staunch supporters of the war-battered nation, defied the EU’s decision Friday to end a ban on grain purchases, citing the impact on plummeting prices in their markets.

Ukraine is pushing its closest EU neighbors to open their markets to its grain, oilseed and sunflower oil, exports that provide vital revenue. The bans have been blamed for slowing the transit of Ukraine’s goods via those countries to other markets, routes that have become even more important after Russia terminated a Black Sea grain corridor agreement in July. Before the war, Ukraine exported millions of tons of crops through its southern ports.

Kyiv is also considering measures that may affect products such as onions and apples from Poland and cars from Hungary if restrictions aren’t lifted by the end of Friday, according to Taras Kachka, the deputy economy minister.

The unilateral decision by eastern European governments was met with condemnation by other EU members, whose agriculture ministers met Monday in Brussels.

“It’s part-time solidarity, I’d say,” Germany’s minister, Cem Oezdemir, told reporters. “If they feel like it, they show solidarity — if not, they don’t.” France’s Marc Fesneau called on the European Commission to take action “urgently and assertively.”

The bans won’t apply to Ukrainian products transiting through eastern EU states to third countries, and the impact of Friday’s EU move – as well as the rapid pushback – on global markets is expected to be limited. Still, the unilateral bans hurt Ukrainian farmers who have losses because of delays and additional costs, Svyrydenko said. “Ukraine sees violation by the three EU countries of their international commitments,” according to the Economy Ministry’s statement.

Polish Election

But the political stakes are crucial. Poland, which Kyiv has especially singled out in recent weeks, is holding an election on Oct. 15, in which the ruling Law & Justice party may struggle to form a majority for a third term. The country’s farmers make up a significant portion of the party’s base.

“The EU’s decision is a bittersweet gift for us,” Polish Prime Minister Mateusz Morawiecki said at an election campaign event in Elk, northern Poland, on Friday. “I would prefer that they extended the ban, but they didn’t do it. Now we will extend it ourselves despite lack of their agreement.”

Romania, the fourth EU member state that shares a border with Ukraine, sidestepped a unilateral move, announcing an agreement with Kyiv on a temporary import freeze until the nations agree on joint licensing.

“We haven’t seen any Ukrainian grain entering the domestic market since the EU ended the ban on Friday,” Romanian Prime Minister Marcel Ciolacu told reporters in Bucharest Monday. He said the government will review a draft of a licensing deal.

Bulgaria’s decision to lift its ban triggered protests, with farmers blocking roads and border checkpoints with tractors and demanding that the government in Sofia extend a ban on grain and products including sunflower oil, dry milk and frozen fruit.

–With assistance from Lyubov Pronina, Katharina Rosskopf, Irina Vilcu, Andra Timu, Slav Okov, Piotr Skolimowski, Áine Quinn and Daryna Krasnolutska.

(Updates with comments from Ukrainian minister from the second paragraph.)

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