Brussels proposes steep EU tariffs on Russian grains, fearing market disruption

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The measure applies to derivative products such as grains, oilseeds and vegetable oils that must be produced in Russia and sold in one of the 27 member states. The same goods imported from Belarus, one of President Vladimir Putin’s closest allies and often a cover for his destructive actions, will also be targeted by the regime.

Under the proposal, the EU would impose tariffs of 95 euros per tonne on Russian corn and wheat, a sharp increase compared to the zero tariff currently in place. Other products would be subject to a 50% “ad valorem tax” commensurate with the anticipated increase.

The figure is designed to be high enough to prevent purchases of Russian grain, which last year amounted to 4.2 million tonnes worth 1.3 billion euros. Meanwhile, Belarus sold 610,000 tonnes, valued at 246 million euros.

Although this is a small proportion of the EU’s total imports, Russia, as one of the world’s largest agricultural producers, has sufficient capacity to dump low-cost grain into Europe and cause market disruption if Putin wishes. The European Commission believes that there is.

This measure is primarily preventive, as no major failures have been detected at this time. Strictly speaking, this is not a sanction, but it has a very similar purpose. That means depriving Russia of yet another source of income and ensuring that the grain stolen by the Russian military from the occupied territories of Ukraine does not reach European customers.

In reality, European companies would still be able to buy, sell and store Russian and Belarusian grain supplies, even if high tariffs make it economically unsustainable. Grain that passes through the bloc’s territory and reaches other countries, including North African countries, will be exempted from this measure.

Proposal published in friday morningstill needs to be approved by member states through a qualified majority vote. The European Commission had the plan in place, but only moved forward with it after the EU summit in Brussels the day before.

“There are several good reasons for making this proposal,” Commission President Ursula von der Leyen said Thursday night. “This will prevent Russian grain from destabilizing the EU market for these products. It will also prevent Russia from using the proceeds from exports of these products to the EU. And it will definitely prevent Russia’s illegal exports of stolen Ukrainian grain from entering the EU market. ”

During the summit, Latvian Prime Minister Evika Širiša and Lithuanian President Gitanas Nausėda called for a complete ban on Russian grains, which would require the imposition of sanctions. Ukrainian President Volodymyr Zelenskiy also raised the issue in a virtual address to EU leaders.

“Unfortunately, Russia’s access to European agricultural markets is still unrestricted. And even if Ukrainian grain is thrown onto roads and railway tracks, Russians as well as goods from Putin-controlled Belarus Products are still being shipped to Europe,” Zelenskiy said. to the transcript. “This isn’t fair.”

Since the beginning of the war, agricultural issues have been a hot topic with political implications. The first shockwave was sent after the Russian military blockaded the Black Sea, preventing Ukraine, a powerful agricultural exporter, from using traditional trade routes to lower-income countries.

This led the EU to set up a so-called “solidarity lane”, exempting all Ukrainian products from tariffs and quotas and offering an alternative route by land. However, the project faced opposition from neighboring member states, namely Poland, Hungary, Slovakia, Bulgaria and Romania, who said a glut of low-priced, duty-free Ukrainian grain was driving down prices for local farmers and filling storage bins. Appealed.

Poland, Hungary and Slovakia imposed unilateral and chaotic bans on various Ukrainian ingredients, which continue to this day.

Despite repeated attempts by Brussels to resolve the long-running conflict, it has been unable to find a lasting solution.Agreement to extend free trade regime until 2025 reached Earlier this week, safeguards were tightened to control the flow of poultry, eggs, sugar, oats, corn, groats and honey.

But shortly after the agreement was announced, member states called for more time to analyze the document and cast doubt on the process.

This article has been updated with more information about customs duties.