Ukraine appealed to the WTO with a claim against its Western neighbors

On the evening of September 18, Ukraine filed claims with the World Trade Organization (WTO) against Hungary, Poland and Slovakia, which renewed the embargo against the import of Ukrainian agricultural products into their domestic market. This was announced by the First Deputy Prime Minister of Ukraine Yulia Sviridenko. Three EU countries introduced bans after the European Commission (EC) did not extend pan-European restrictions on the import of Ukrainian grain on September 15.

According to Ukraine, its neighbors have “violated their international obligations” and are not coordinating their trade policies with the EU, introducing unilateral restrictions. And this, according to Kyiv’s position, is “unacceptable”, since this policy “belongs to the exclusive competence of the EU” and not Hungary, Poland and Slovakia. “It is fundamentally important for us to prove that individual member states cannot ban the import of Ukrainian goods. Therefore, we are filing lawsuits against them in the WTO,” the press service of the Ministry of Economy of Ukraine quotes Sviridenko on its website. At the same time, the Ukrainian minister expressed hope that “these states will lift their restrictions and we will not have to sort things out in the courts for a long time.”

“[Украинские] exporters have already suffered and continue to suffer significant losses due to downtime, additional costs and the inability to fulfill foreign economic agreements,” Sviridenko said.

European Commissioner for Agriculture Janusz Wojciechowski said he was surprised by the “path chosen by Ukraine” to resolve the dispute with three EU border countries through a complaint to the WTO. He promised that the competent services of the EC will study this situation and next steps. Warsaw reacted more sharply: aide to the Polish President Marcin Przydacz said that “Poland already has a ready response to Ukraine to its complaint to the WTO.” He emphasized that “the most important goal of the Polish authorities is to support the Polish market,” noting that the transit of grain from Ukraine through Poland and further to the EU is still allowed. Hungary, in turn, refused to directly pursue a dispute with Ukraine in the WTO, since the interests of EU member countries in the organization are represented by the EC.

After the European Commission lifted the restrictions on September 15, Ukraine promised to introduce legal measures (including export licenses) within 30 days to prevent the uncontrolled release of grain into the EU market. The EC has said it will not impose restrictions again if the measures work.

As Maxim Medvedkov, head of the department of trade policy at the National Research University Higher School of Economics, explained to Vedomosti, this issue is regulated not only by WTO norms, but also by free trade agreements between Ukraine, the EU and its members. Therefore, the measures introduced by the three states can be assessed both according to WTO norms and according to the norms of similar bilateral agreements. A situation is possible when the WTO will not be able to consider issues within the powers of the bodies of the countries of the European Customs Union, says Medvedkov. There were examples of claims in the WTO regarding the actions of EU member countries, but, according to the expert, none of the plaintiffs had serious success, since these issues were classified under EU rules. Based on the available information, Ukraine’s claim has little chance, Medvedkov believes.

In the situation with Ukrainian grain, all parties are guided purely by their own economic and political interests, recalls Artem Sokolov, a researcher at the MGIMO IMI. It was important for the European bureaucracy to demonstrate support for Ukraine. Eastern European countries have their own interests both in the EU and in relations with Ukraine, despite the general support of Kyiv, explains Sokolov. It is unlikely that the EU will go into open confrontation with its three members on this issue, he said.