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The Association Agreement (AA) between the EU and Ukraine, including a Deep and Comprehensive Free Trade Area (DCFTA), was negotiated between 2007 and 2011, and signed on 21 March and 27 June 2014.
The AA is the main tool for bringing Ukraine and the EU closer together: it promotes deeper political ties, stronger economic links, and respect for common values. It formally entered into force on 1 September 2017 following ratification by all EU Member States.
The DCFTA has provisionally applied since 1 January 2016.
The Priority Action Plan (PAP) (see infographic) for enhanced implementation of the EU-Ukraine DCFTA in 2023-2024 lays down a set of concrete actions to accelerate and monitor the full implementation of the DCFTA, providing Ukraine with further access to the EU Single Market.
- The EU is Ukraine's largest trading partner, accounting for 55.2% of its trade in goods in 2022. Ukraine is the EU's 17th biggest trading partner, accounting for around 1% of the EU's total trade in goods. Total trade in goods between the EU and Ukraine reached €57.8 billion in 2022, meaning that trade in goods has doubled since the entry into force of the DCFTA in 2016.
- Ukraine's exports to the EU amounted to €27.6 billion in 2022, an increase of over 15% compared to the previous year, aided by Solidarity Lanes that help Ukraine export its products by road, rail and inland waterways following Russia's unprovoked and unjustified invasion of Ukraine and blockade of its seaports. Ukraine's main exports to the EU by value are cereals (16.5% of total exports), oil seeds (11.7%), animal or vegetable fats and oils (10.7%), iron and steel (9.3%), and ores, stag and ash (8.4%). In 2022, Ukraine overtook the US as the third-biggest source of EU agrifood imports.
- The EU's exports to Ukraine amounted to €30.1 billion in 2022. EU exports to Ukraine have increased by 6.5% since 2021. The EU's main exports to Ukraine are mineral fuels and mineral oils (20% of all exports), motor vehicles (9.7%), electrical machinery (9.4%), machinery (8.4%), and plastics (4.4%).
The EU and Ukraine
The AA/DCFTA aims to boost trade in goods and services between the EU and Ukraine by gradually cutting tariffs and bringing Ukraine's rules in line with those of the EU in certain industrial sectors and agricultural products.
To better integrate with the EU market, Ukraine is aligning its legislation to the EU's norms and standards for industrial and agri-food products. Ukraine is also approximating its legislation to the EU's in trade-related areas such as:
- Technical barriers to trade (TBT)
- Sanitary and phytosanitary (SPS)
- Customs and trade facilitation
- Protection of intellectual property rights
Response to the Russian war of aggression in Ukraine
In response to the Russian Federation's illegal annexation of Crimea and Sevastopol in 2014, the decision by the Russian Federation to recognise the non-government-controlled areas of the Donetsk and Luhansk oblasts as independent entities in February 2022 (followed later by Kherson and Zaporizhzhia), and the Russian Federation's unprovoked and unjustified military aggression against Ukraine in 2022, the EU has introduced a series of trade-related restrictive measures.
Since 2014, the EU has banned the import of goods originating in Crimea and Sevastopol, as well as investments and a number of directly related services there. Similar restrictive measures were adopted in 2022 regarding the non government-controlled areas of Donetsk, Luhansk, Kherson and Zaporizhzhia oblasts of Ukraine. This sanctions regime consists of Council Decisions (CFSP) 2022/266 and Council Regulation (EU) 2022/263. The measures therein are very similar to those concerning Crimea and Sevastopol.
Temporary measures in support of Ukrainian exports to the EU
The EU has granted Ukraine full trade liberalisation, suspending import duties, quotas and trade defence measures for imports from Ukraine on a temporary basis. This is known as the Autonomous Trade Measures (ATM) Regulation. These measures first entered into force on 4 June 2022 and were reintroduced for another year on 5 June 2023. Thanks to these measures, the EU is significantly supporting Ukraine's economy by helping alleviate the difficult situation faced by Ukrainian producers and exporters.
The regulation is just one of the measures adopted by the EU in solidarity with Ukraine. More information on other measures is available on the dedicated Commission site.
Priority Action Plan
The Priority Action Plan for 2021-2022 was put in place to spur the implementation process of the DCFTA. Since the European Council granted Ukraine candidate status on 23 June 2022, the EU and Ukraine have reached a new stage in their relationship. In her State of the Union speech in September 2022, Commission President Ursula von der Leyen announced said that the European Commission would work together with Ukraine to ensure seamless access to the Single Market.
The conclusions of the European Council of 20-21 October 2022 called for harnessing the full potential of the Association Agreement (AA) and the Deep and Comprehensive Free Trade Agreement (DCFTA) with Ukraine to ease its access to the Single Market. In the EU-Ukraine Association Committee in Trade Configuration (ACTC) on 25-26 October 2022, both sides agreed to revise and extend the Priority Action Plan so as to reflect these new priorities for 2023-2024.
The purpose of this revised Priority Action Plan for 2023-2024 is to lay down a set of concrete actions – such as working to include Ukraine in the EU’s Roam Like at Home Area and the Single European Payments Area, and concluding an Agreement on Conformity Assessment and Acceptance that will allow free circulation for certain industrial goods – to be undertaken by both sides until the end of 2024.
The revised Priority Action Plan will be the roadmap to accelerate and monitor the full implementation of the DCFTA, providing Ukraine with further access to the Single Market. Each action has been designed to ensure that it is realistically possible to be completed within a short timeframe, containing concrete measures that are readily actionable and for which there is a clear procedure. It is without prejudice to cooperation in areas not covered in this document or by other parts of the Association Agreement.
Export ban on unprocessed wood
The EU-Ukraine Association Agreement prohibits any form of export restrictions.
In 2015, Ukraine introduced a 10-year export ban for all unprocessed wood, amending and supplementing a 2005 ban on ten wood species of low commercial relevance. The EU considered this ban to be in violation of the AA/DCFTA, and has raised the issue of the export ban at all levels and on all occasions since 2015. In 2020, the EU requested the establishment of an arbitration panel (the Panel) to settle this dispute. In December 2020, the Panel concluded that the export bans are incompatible with Article 35 of the AA, which forbids export prohibitions.
Committees and Dialogues
The EU and Ukraine meet regularly to discuss issues and best practices and oversee the proper functioning of the Agreement.
Trading with Ukraine
- Importing into the EU from Ukraine
- EU trade defence measures on imports from Ukraine (currently suspended)
- Exporting from the EU to Ukraine
- Trade relations are part of the EU's overall political and economic relations with Ukraine
- Ukraine is a member of the World Trade Organization
The suspension of import duties, quotas and trade defence measures on Ukrainian exports to the European Union – known as the Autonomous Trade Measures (ATMs) – is in place for another year.
The European Commission has today adopted exceptional and temporary preventive measures on imports of a limited number of products from Ukraine under the exceptional safeguard of the Autonomous Trade Measures Regulation.
The purpose of the meeting was to find the most effective and impactful ways to disrupt Russia’s revenue stream from the diamond trade.