August 29, 2013


Ukraine to enter free trade agreement to supply meat to EU



Ukraine will be allowed to increase beef and pork exports significantly once it signs a free trade agreement (FTA) with the EU, which will boost production of these meats.


So far, the preliminary terms of the agreement provide that the rates of Customs duties on meat and offal during export to EU will be reduced from the current 25% to 5%.


However, if this happens, Ukrainian exporters may lose the Russian market, where the government has made it clear that it can implement "protective measures" and fully block imports of a large number of products from Ukraine if a FTA is signed.


"The signing of the Association Agreement with the EU will give Ukraine the opportunity to deliver annually about 12,000 tonnes of beef to the EU and this will redirect Ukrainian exporters from Russia to other countries," said Alexander Okhrimenko, president of the Ukraine National Analytical Centre.


Ukraine currently supplies the EU with only about with 1,000 tonnes of beef, while almost 70% of its meat exports go to Russia. However, Russia is consistently trying to persuade Ukraine to enter the Customs Union and abandon any agreements with the EU. During recent years and on several occasions, this conflict has led to a so-called "trade war", with the two countries repeatedly banning different types of products from each other.


"This diversification of meat exports will give us an opportunity to protect Ukraine's livestock business from the unfriendly actions of the Russian government against Ukrainian goods. Moreover, the supply of food products to the EU will be a good incentive for our breeders to introduce new technologies to improve the quality of their products and increase production," said Ohrimenko.


According to the State Statistics Service, in the first seven months of 2013, the number of cattle in Ukraine grew by 3%, and pigs by almost 5%, compared to the same period last year.


If Ukraine enters the free trade agreement with the EU and does not neglect the Russian market, it will be able to increase cattle stock to around 20,000-22,000 head, compared to the current 5,600 head, according to estimates from the country's experts.

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