EU removes tax incentives, Ukraine risks heavy losses

The EU’s Autonomous Trade Measures (ATMs), adopted after the Ukraine conflict erupted in February 2022, have eliminated tariff quotas on 36 types of goods imported from the Eastern European country. The policy is valid until June 5 this year, but the EU will not extend the duty-free privilege for another year.

Ukraine relies on ATM exports to secure vital foreign currency for its military . In that context, the country's economy faces the risk of losing around 3 billion euros ($3.4 billion) if the EU abolishes the duty-free policy, according to estimates by the Ukrainian Center for Economic Strategy (CES).

The European Union (EU) has not extended tax incentives for many Ukrainian exports. Photo: Xinhua

The EU will regulate trade with Ukraine through a free trade agreement that entered into force in 2017, an unnamed source confirmed. Negotiations are currently underway under Article 29 of the agreement, which deals with amending the tariff quota provisions.

So far, representatives of the Ukrainian Ministry of Economy and the European Delegation to Ukraine have not responded to requests for comment on the above developments.

Until June 5, Ukraine still benefited from the EU’s duty-free trade policy, meaning it could export without limits. This brought many opportunities, but also caused political instability, with Poland, Hungary, Slovakia and Bulgaria among those opposing duty-free trade with Ukraine.

Moving to a free trade agreement could therefore offer Ukraine certain advantages. Article 29 of the agreement stipulates that Ukraine and the EU could reach a compromise by establishing less restrictive tariff quotas or removing them altogether for goods that are not considered sensitive.

(According to Kyiv Post)

Source: https://hanoimoi.vn/eu-xoa-uu-dai-thue-ukraine-nguy-co-thiet-hai-nang-699467.html