How Ukraine’s trade with the EU could change in the coming months

The terms of trade between Ukraine and the EU are set to change soon. In 2022, amid Russia's full-scale aggression, the European Union adopted several decisions that led to a rapid, though mostly temporary, deepening of economic integration between Ukraine and the EU. In June 2025, the autonomous trade measures (ATMs) will expire. The European Commission does not plan to extend them but intends to propose an alternative for Ukraine.

Read more to learn how this will affect Ukraine's exports to the EU and what scenarios are possible in the article by Veronika Movchan of the Institute for Economic Research and Policy Consulting - Export with restrictions: what the EU's end to war-time trade preferences' will mean for Ukraine. The ATMs, introduced in June 2022, removed four categories of tariff barriers that affected Ukrainian goods entering the EU market, covering nearly one-fifth of Ukraine's exports to the EU. Although temporary, access to the EU market became duty-free for all goods without exception.

And soon this became a political problem for Ukraine. The sharp increase in exports to the EU quickly triggered a reaction, which to some extent undermined the concept of duty-free trade under the ATMs. In April 2023, Poland, Hungary, Slovakia and Bulgaria banned a broad range of Ukrainian agricultural imports to their domestic markets, including goods that had long been subject to zero tariffs and were not even covered by the ATMs.

The ban was short-lived and, within weeks, was replaced by preventive safeguard measures introduced by the European Commission, which prohibited the import of four Ukrainian products (wheat, corn, rapeseed and sunflower seeds) into these countries plus Romania. The political battles around the ATMs have intensified each year. As a result, their continuation has become almost toxic for Ukraine-EU relations.

It is therefore unsurprising that the European Commission has announced the end of the ATMs. The key question now is what will replace them? Rather than renewing trade preferences annually, the relationship could revert to the Deep and Comprehensive Free Trade Area (DCFTA) framework.

But returning to the pre-ATM conditions would be a painful outcome for Ukraine. A far more appealing option would be to revise the tariff schedule under Article 29 of the Association Agreement. Ukraine initiated consultations on this in 2021, five years after the temporary application of the DCFTA began.

However, the war and the ATMs diverted attention from those talks. Now, the key issue is what the new levels of tariff quotas will be. This is central to the negotiations under Article 29.

For Ukraine, the ideal solution would be the complete elimination of tariff quotas. A more likely scenario, however, is an agreement on new quota levels for highly sensitive goods. The best outcome would be to set new tariff quotas at levels close to the actual trade flows in 2022-2024.

This scenario would preserve the status quo in terms of supporting Ukraine and establish clear duty-free export limits ahead of Ukraine's eventual EU membership, which would restore full market access. There is a wide range of intermediate scenarios as well, between reverting to basic DCFTA tariff quotas and completely abolishing them. Ongoing negotiations between Ukraine and the EU will determine which path is taken.

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