EU agrees deal on food trade with Ukraine

By Philip Blenkinsop

BRUSSELS (Reuters) -The European Union and Ukraine have reached an initial deal to revise their free trade agreement and determine future agricultural exports from Ukraine to the bloc, the European Commission said on Monday.

The EU temporarily waived duties and quotas on Ukrainian farm products in June 2022 in the wake of Russia's invasion to help the country compensate for the higher costs of its exports via the EU, after Russia threatened its traditional Black Sea shipping lanes.

However, these measures were halted at the start of this month after an influx of cheaper Ukrainian grain, poultry and sugar sparked protests in neighbouring countries, notably Poland.

The bloc has now returned to its pre-war trade agreement with Ukraine, with tariffs and quotas limiting agricultural trade.

The revision agreed on Monday will fully open the EU market to less sensitive products, such as fermented milk or grape juice, while for butter, skimmed milk powder, gluten, oats and barley groats, quotas will increase up to the highest level of recent years.

For sensitive products, such as sugar, poultry, eggs, wheat, maize and honey, EU quota increases would be limited. No additional volumes were allowed for other meats.

Ukraine would also open up its markets to EU poultry, pork and sugar and commit to align to EU farm production standards, such as on animal welfare and pesticides, by 2028.

Either side could also invoke a safeguard clause in case of a negative impact on their markets. The agreement would also be reviewed intermittently.

A final agreement will need to be approved by EU members.

The EU is Ukraine's largest trade partner and Ukraine is the third-largest supplier of agri-food products to the EU, according to EU data.

(Reporting by Philip Blenkinsop; Editing by Makini Brice, Benoit Van Overstraeten and Ros Russell)