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The EU wants to tax Russian agricultural products to “dry up” Moscow’s revenues

Photo: Alexei Nikolsky Pool Agence France-Presse Russian President Vladimir Putin, during a visit to a greenhouse in Stavropol on March 5

Julien Girault – Agence France-Presse in Brussels

March 22, 2024

  • Europe

Brussels proposed on Friday to impose “prohibitive” customs duties on Russian agricultural products imported into the EU, which are currently exempt to the dismay of European farmers, with a view to “drying up” revenue allowing Moscow to finance his war in Ukraine.

“These imports increased considerably in 2023. These prohibitive customs duties will make them commercially unviable”, preventing them from “destabilizing” the European market, said European Trade Commissioner Valdis Dombrovskis.

“This will help put an end to the export of stolen Ukrainian grain to the EU […] and dry up an important source of income allowing (Moscow) to finance its war of aggression” against Ukraine, he stressed.

Agricultural products from Belarus, a close ally of Moscow, will also be targeted.

This proposal “clearly shows that we do not want Russian grain or Belarusian grain on the EU market. But transit remains possible,” Commission President Ursula von der Leyen said after a summit of EU leaders in Brussels.

These measures will not concern the transit via the EU of cereals and other agricultural products to third countries, in Africa or the Middle East, in order to “preserve global food security”.

And fertilizers are not targeted.

German Chancellor Olaf Scholz considered it “normal to consider customs duties on Russian grain”. “European consumers will suffer” if the proposal goes ahead, the Kremlin warned.

Russia exported 4.2 million tonnes of cereals, oilseeds and derived products to the EU in 2023, worth €1.3 billion. Concerning cereals alone, the EU imported 1.5 million tonnes last year, compared to 960,000 in 2022, against the backdrop of a surge in Russian production last season.

Russian grain imports, much lower than the volumes coming from Ukraine, constitute a tiny part (around 1%) of the European market.

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“Discouraging imports”

Under World Trade Organization (WTO) rules, most Russian agricultural products, including cereals (corn, sunflower, quality wheat, etc.), are so far exempt from customs duties in the EU .

In the various sets of sanctions adopted against Moscow since 2022, the Europeans had taken care not to target either the agricultural sector or fertilizers. They feared destabilizing trade and weakening the food security of Asian and African countries dependent on Russian agriculture.

“The new tariffs are designed to be high enough to discourage imports. They will increase either to 95 euros per tonne”, particularly for cereals, “or to a 50% duty” for other products (oils, vegetables, etc.), according to a European official.

In addition, Brussels intends to activate an exception clause to ensure that Russia and Belarus no longer have access to WTO cereal quotas granted by the EU, which offer better treatment tariff,” he adds.

This proposal, which comes against a backdrop of anger among farmers in Europe, will have to be ratified by a qualified majority of Member States (15 countries representing 65% of the EU population), without requiring the approved by MEPs.

This process is easier and faster than the adoption of a total embargo, which would require the unanimity of the Twenty-Seven.

“Moral obligation”

The current situation outraged kyiv. “We note that, unfortunately, Russia's access to the European agricultural market remains unlimited,” lamented Ukrainian President Volodymyr Zelensky on Thursday, who addressed the Twenty-Seven by videoconference.

At a time when disgruntled Polish farmers are blocking the border with Ukraine, “it’s unfair,” he denounced.

The EU is also preparing to cap imports of Ukrainian poultry, eggs, sugar, corn and oats, exempt from customs duties since 2022.

For their part, the Czech Republic, Poland and the three Baltic states are calling for a complete ban on grain imports from Russia and Belarus. A “moral obligation”, they judge.

Last month, Latvia already banned the import of food products from Russia and Belarus.

For their part, European grain growers, particularly in France, are worried about seeing Russia drag down world prices and upset trade balances, especially since Russian agricultural production jumped sharply last year. 60~/p>

Encouraged by Kiev's difficulties in delivering its cereals and oilseeds to its traditional markets, Moscow has launched a vast commercial offensive in Africa and the Middle East for two years, in particular via donations or very subsidized deliveries. mediated.

Teilor Stone

By Teilor Stone

Teilor Stone has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining Thesaxon , Teilor Stone worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my teilor@nizhtimes.com 1-800-268-7116