BRUSSELS (CNS) — The European Union and Ukraine struck a breakthrough trade agreement Monday, ending months of political deadlock that threatened to cost Ukraine billions in lost exports during its war with Russia.
The European Commission said Monday it has concluded negotiations on the review of the EU-Ukraine Deep and Comprehensive Free Trade Area, known as DCFTA. The deal modernizes the trade framework governing over half of Ukraine's exports and establishes new safeguards for EU farmers who had pushed back since 2023 with extensive protests against unrestricted Ukrainian agricultural imports, according to the EU's executive branch.
Trade Commissioner Maroš Šefčovič called the deal "balanced, fair and realistic" and said it "represents the best possible outcome under difficult geopolitical conditions." The agreement comes after the commission faced mounting criticism for its handling of the negotiations.
A Ukrainian parliamentary committee had estimated that losing preferential EU market access could cost the country $3.5 billion annually. The EU accounts for over 50% of Ukraine's trade in goods, making the trade relationship critical for funding the country's defense against Russia, according to the commission.
The breakthrough follows months of uncertainty after temporary trade measures that kept Ukrainian goods flowing duty-free expired June 5. During a closed-door session in May of EU agriculture ministers in Brussels, member state representatives vented frustration with the commission's inability to cement a deal with Ukraine despite having ample time, they told reporters.
The new agreement balances Ukrainian market access with EU protections through three mechanisms, the commission said. Ukraine must meet EU requirements for agricultural production standards by 2028, Šefčovič said, matching the timeline for potential EU membership.
"I want to be very clear on this point: the additional market access granted is conditional to Ukraine's alignment to our production standards," Agriculture Commissioner Hansen emphasized, saying this promotes "a level playing field for EU farmers."
Both sides can trigger emergency measures if imports threaten domestic markets, with the EU able to assess disruptions at individual country levels, officials said. Šefčovič described this as "a robust safeguard mechanism to shield EU markets, especially where imports could cause serious difficulties."
Hansen said the commission's aim "has always been to find the right balance between supporting Ukraine's trade with the union and at the same time addressing the sensitivities of a number of EU agriculture sectors." He added that "both EU and Ukrainian producers deserve a stable and predictable basis for the future development of bilateral trade."
When pressed on how officials determined product sensitivity levels, Hansen said they analyzed "what the market absorption capacity is" based on experience with "market disturbances" that prompted certain member states to impose bans. The result, he said, balances concerns of EU producers with Ukraine's export possibilities.
The commission's justification comes amid questions about whether the deal truly resolves underlying tensions or merely postpones them.
Market access will vary by product sensitivity, with different tiers of liberalization. For "the most sensitive products such as sugar, poultry and eggs, wheat, maize or honey," quota increases "fully reflect the sensitivity of these products," Hansen said. The increases improve access compared to the 2016 agreement but moderate imports compared to peak levels under emergency measures.
Other products like butter, skim milk powder, malt, gluten, oats and barley will see quota volumes increase "up to the highest level of trade in recent years," according to Hansen. Some goods including whole milk powder, fermented milk, mushrooms and grapefruit juice will be free from quotas.
Ukraine also agreed to grant significant quota increases for EU exports of pork, poultry and sugar, which will "enhance the export possibilities for European farmers notably in the member states neighboring Ukraine," Hansen added.
