Fracturing Solidarity: The Grain Trade Dispute between Ukraine and the European Union

Tension between Ukraine and its EU neighbors has resurfaced against the backdrop of bloc-wide farmer protests against EU agricultural policies. Following the European Commission’s proposed safeguard mechanisms to protect European farmers from the impacts of its liberalized trade support for Ukraine, Polish farmers initiated a complete blockade of the Ukraine-Poland border in a move that Ukrainian president Volodymyr Zelensky has characterized as “the erosion of solidarity on a daily basis.” As Polish farmers spill Ukrainian grain along the blockaded border and call for the resignation of Janusz Wojciechowski, the European commissioner for agriculture, representatives from Poland, Ukraine, and the European Union negotiate a resolution for farmers’ concerns over cheap Ukrainian imports to local European Union markets.

Q1: How did the trade dispute between Ukraine and its EU neighbors begin?

A1: Following Russia’s full-scale invasion of Ukraine in late February 2022, the European Union established alternative export routes for Ukrainian agricultural goods, or “solidarity lanes,” as part of its economic support package for Ukraine. The package also included autonomous trade measures (ATMs), which waived tariffs and quotas for the import of Ukrainian agricultural products to the European Union. Grains, oilseeds, and other goods flowed through the solidarity lanes across Ukraine’s western border by land and river routes into neighboring countries, where they were intended for export to destination countries around the world. It was immediately evident that rail, road, and river infrastructure in these countries was not equipped to export large volumes of Ukrainian agricultural products alongside their own abundant inventories, and the costs for exporting via the solidarity lanes increased significantly as Ukrainian products continued flooding into the neighbor states.

By April 2023, the glut of Ukrainian goods in the “frontline five” member states—Poland, Romania, Hungary, Slovakia, and Bulgaria—suppressed prices for agricultural products produced locally, reducing farmers’ incomes in these countries. Farmers protested, pressuring their governments to implement trade restrictions on the transit and sale of Ukrainian products within their borders. The European Union’s attempt to mitigate farmers’ losses through financial support packages and loosened restrictions was insufficient compensation for the challenges farmers faced competing with Ukrainian products in local markets. By April 19, Poland, Hungary, Slovakia, and Bulgaria had approved bans against the import of Ukrainian grain; attempts to lobby the European Commission to reinstate tariffs on Ukrainian grain and oilseed imports were unsuccessful. Although the countries reaffirmed solidarity with Ukraine, officials expressed frustration because “instead of export corridors, our countries are becoming warehouses” for Ukraine’s agricultural exports, as Bulgarian agriculture minister Yavor Gechev characterized the situation.

The European Union and the government of Ukraine initially criticized the unilateral measures, but a compromise was reached in May 2023 when the European Union adopted “exceptional and temporary preventative measures” to uphold the ban on domestic sales of Ukrainian wheat, maize, rapeseed, and sunflower seed within the five member states, while still facilitating the export of these products to other countries within and outside of the bloc. The following month, the Joint Coordination Platform was established “to improve the flow of trade” between the member states and Ukraine, and the European Union extended the ATMs for Ukrainian products and the safeguard ban on domestic sales in the five member states, noting that the latter would expire on September 15, 2023.

Q2: What effects did the European Union’s trade restrictions have on the domestic grain markets of the member states and why were they not extended?

A2: In July, the agriculture ministers of the frontline five countries signed a joint declaration stating the countries’ intention to extend the ban on domestic sales of Ukrainian wheat, maize, rapeseed, and sunflower seed until the end of the year regardless of the European Commission’s decision, while reemphasizing their commitment to continued support for the transit of Ukrainian agricultural products through their countries. The ministers argued that the ban had prevented further destabilization to their agricultural markets and improved the flow of grain through their countries, citing that the 260,000 metric tons of Ukrainian wheat and corn travelling through Poland in June 2023 was more than double the 114,000 metric tons of goods exported in January 2023. Arguing in favor of the ban’s extension, the European Union’s agriculture commissioner and former agriculture minister of Poland, Janusz Wojciechowski, noted that of the 4.1 million tons of Ukrainian grains that entered Poland from April 2022 to March 2023, 3.4 million tons remained either stored or sold within the country, while only 700,000 tons had been exported to other countries.

The spokesperson for Ukraine’s Ministry of Foreign Affairs, Oleh Nikolenko, argued that Ukrainian products are not responsible for destabilized markets in Europe and that farmers in neighboring countries are still facing problems despite the ban being in place for several months. He contended that restrictions on Ukraine’s exports benefit Russia’s efforts to blockade Ukrainian food products and that the further limitation of Ukrainian grain exports allows Russia to further profit from its own grain sales in Europe. By September 15, the European Commission concluded based on data analysis of the impacts of Ukraine’s exports on EU agricultural markets that “the market distortions in the five member states bordering Ukraine have disappeared.” The commission allowed the “exceptional and temporary preventative measures” to expire and announced this decision alongside renewed commitments from the European Union and Ukraine to prevent another grain glut in the member states.

Q3: How did affected countries respond to the European Union’s refusal to extend the restrictions?

A3: Following the European Commission’s decision, Poland, Hungary, and Slovakia immediately announced the resumption of state-level bans on the domestic sale of Ukrainian agricultural products. The countries’ bans brought divisions in EU support for Ukraine to the forefront, as member states outside of eastern Europe opposed the unilateral measures, arguing that they threaten solidarity within the European Union and put the “European project . . . at risk.” The governments of Romania and Bulgaria held off on extending state-level bans despite continued pressure from farmers, citing a willingness to wait for Ukraine’s plan to curb imports and the potential benefits of tax revenue and local food prices absent the ban, respectively.

Ukraine had been outspoken in its opposition to the state-level bans since they were first enacted in April 2023, arguing that such unilateral measures are an illegal and unacceptable response that “will not accelerate the positive resolution of the situation.” Ukraine escalated its concerns to the World Trade Organization (WTO) following the September 2023 bans, filing a complaint against Poland, Hungary, and Slovakia and threatening retaliatory import restrictions on certain goods from Poland and Hungary unless the bans were lifted.

Tensions were on display at the UN General Assembly High-Level Week as Ukrainian president Volodymyr Zelensky referenced the situation during his address at the Sustainable Development Goals summit: “It is alarming to see how some in Europe . . . play out solidarity in a political theatre. . . . They may seem to play their own role, but in fact they are helping set the stage to a Moscow actor.” Facing pressure to support domestic farmers, Polish president Andrzej Duda warned that “it would be good for Ukraine to remember that it receives help from us and to remember that we are also a transit country to Ukraine.” Polish prime minister Mateusz Morawiecki further escalated the dispute during a televised interview when he threatened to revoke military aid to Ukraine, a claim that was quickly walked back by President Duda. Robert Fico, Slovakia’s then frontrunner candidate and the current prime minister, echoed Poland’s threat to withdraw military aid as both countries headed into national elections the following month.

Q4: How did Ukraine and the frontline five countries work to deescalate the trade dispute and why have their efforts been unsuccessful?

A4: Late September 2023 saw progress toward compromise plans between Ukraine and the frontline five countries, in which Ukraine would control exports through a licensing system requiring a mutual agreement with the importing country before a license could be issued to Ukrainian exporters. On September 21, Slovakia became the first to agree to lift the ban in exchange for the new system’s successful implementation and removal from Ukraine’s WTO complaint, but Robert Fico’s victory in parliamentary elections on September 30 saw the ban extended and expanded to include additional agricultural products in late November.

As a newly elected Polish parliament worked to form a new coalition government under the leadership of pro-EU candidate Donald Tusk following Poland’s national election in mid-October, Polish truckers and farmers organized a large-scale blockade of border crossings with Ukraine that commenced in November. Frustrated with Ukrainian competition in their respective sectors, truckers and farmers in Poland and the other frontline five states, including Slovakia and Hungary, protested for a return to pre-war trade measures and additional financial support packages. The protests left over 1,000 trucks backed up in the first two months, leading Prime Minister Tusk’s new government to maintain the import ban and oppose the extension of ATMs for Ukraine despite promises to realign Poland with the European Union. The protests were suspended over the 2023 holiday season due to an agreement reached between Polish farmers and their government, but the European Union’s decision to extend ATMs for Ukraine on January 31 was a breaking point in rising tensions. Farmers resumed their blockade early this month, joining a wave of farmers’ protests across the bloc demanding that the European Union ease environmental and agricultural regulations to ensure farming remains a profitable livelihood.

At the time of writing, Poland, Hungary, and Slovakia maintain import bans on Ukrainian agricultural goods despite pressure from the European Union to trust the safeguard mechanisms aimed at preventing EU market disruptions that were announced alongside the ATMs’ extension in late January. Polish farmers, already blockading numerous border crossings with Ukraine and roads throughout their country, began a complete blockade of the Poland-Ukraine border on February 20. Having announced plans to target communications hubs, access roads to railway stations, and sea ports last week, farmers have now spilled grain from lorries en route to Germany, blocked passenger buses from entering Ukraine, and refused exceptions for the passage of humanitarian aid, fuel, and food into Ukraine.

For the time being, transportation of Ukraine’s formidable agricultural exports to world markets necessarily relies on the cooperation of its neighbors, positioned at the center of fracturing solidarity for the European Union’s support for Ukraine.

Q5: Why is this important in the context of Russia’s war in Ukraine?

A5: Ukraine is exporting grains via its European neighbors only because the war has restricted Ukraine’s access to its Black Sea ports and export routes. Any threat to unified EU support for Ukraine benefits Russia’s military and political goals, as does any drain on the bloc’s financial resources that could otherwise be spent supporting Ukraine’s war efforts or economic recovery, or otherwise countering Russia. The Black Sea Grain Initiative had guaranteed safe access for ships carrying Ukraine’s grains through three of its Black Sea ports until Russia backed out of the deal in July 2023. Later that summer, President Vladimir Putin pledged that Moscow would be willing to rejoin the deal “as soon as the West actually fulfils all the obligations to Russia.” So long as Ukraine and the European Union suffer from trade disruptions and the ensuing disunity they create, Russia is likely to continue to threaten Ukraine’s Black Sea export routes, to the detriment of Ukraine, the European Union, import-dependent, less economically developed countries, and global agriculture markets.

Emma Dodd is a research associate with the CSIS Global Food and Water Security Program. Caitlin Welsh is the director of the Global Food Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.