The European Commission wants to prevent Russia from using farm products as a tool to wreak havoc on the EU market and is moving to impose tariffs on grain imports from Russia and Belarus. The tariffs are also aimed at denying Russia revenue, because they will effectively suppress exports to the EU, the commission said.
Quick Read
- EU Tariffs on Russian and Belarusian Farm Products: The European Commission plans to implement tariffs on grain imports from Russia and Belarus to prevent market destabilization within the EU and reduce Russia’s revenue from exports.
- Limited Impact on EU Market: The imports from Russia and Belarus account for about 1% of the EU market, with the majority supplied by domestic producers and other traditional sources like the U.S., Brazil, Ukraine, Serbia, and Argentina.
- Volume and Value of Imports: In 2023, the EU imported 4.2 million metric tons of cereals, oilseeds, and derived products from Russia, valued at 1.3 billion euros, compared to the EU’s domestic supply of 300 million metric tons annually.
- Tariff Structure: The proposed tariffs would either be 95 euros per metric ton or increase prices by at least 50%, aiming to significantly reduce Russian imports.
- Exclusion from EU’s WTO Quotas: Russia and Belarus will also be excluded from the EU’s World Trade Organization quotas that offer favorable tariff treatment for certain grain products.
- Objective of the Tariffs: The tariffs aim to protect the EU market and farmers from potential exploitation by Russia and to contribute to weakening Russia’s war funding capabilities.
- EU’s Commitment to Global Food Security: Despite the tariffs, the EU ensures that global food security, especially for developing countries, will not be affected, as the tariffs are designed to encourage Russia to export to non-EU markets.
- Background of EU Sanctions: The EU has previously imposed sanctions on Russia in response to the war against Ukraine, targeting various sectors but not explicitly banning food or fertilizer exports to non-EU countries.
- Response to Global Food Prices: While global food prices reached record levels due to the Russian invasion of Ukraine and other factors, they have since declined from 2022 highs.
- EU’s Assurance on Trade and Transit: The EU confirms that the tariffs will not hinder trade with third countries or affect the transit of goods through the EU, promoting incentives for Russian exports to other markets.
The Associated Press has the story:
EU to impose tariffs on Russian grain, fearing Moscow will use exports as war weapon
Newslooks- BRUSSELS (AP) —
The European Commission wants to prevent Russia from using farm products as a tool to wreak havoc on the EU market and is moving to impose tariffs on grain imports from Russia and Belarus. The tariffs are also aimed at denying Russia revenue, because they will effectively suppress exports to the EU, the commission said.
Imports of cereals, oilseeds and derived products from Russia and its Belarus ally are just about 1% of the overall size of the EU market, with domestic suppliers providing the bulk.
But with angry famers already worried by the increase of cheap Ukrainian imports, the EU fears Russia will be encouraged to take advantage of the tense situation to further destabilize the 27-nation bloc.
“This shortfall in supply will be filled partially by EU’s domestic production and, therefore, benefit EU farmers who will be able to sell in the EU,” the commission said. “In addition, the shortfall is expected to be partially filled by imports from third countries which traditionally supply the EU market such as the U.S., Brazil, Ukraine, Serbia, or Argentina.”
EU imports of cereals, oilseeds and derived products from Russia including wheat, maize, and sunflower meal were 4.2 million metric tons in 2023, worth 1.3 billion euros. In comparison, EU suppliers provide 300 million metric tons per year.
The tariffs are designed to be high enough to discourage Russian imports. Under the European Commission’s plan, which can be adopted quickly since it only requires around two thirds of member countries to agree, the duties will either reach 95 euros per metric ton, or increase prices by at least 50%.
In addition, Russia and Belarus will also no longer have access to any of the EU’s WTO quotas on grain that offer better tariff treatment for some products.
“We propose the imposition of tariffs on these Russian imports to mitigate the growing risk to our markets and our farmers,” European Commission President Ursula von der Leyen said.
“They will reduce Russia’s capacity to exploit the EU for the benefit of its war machine. And we maintain our commitment to preserving global food security, especially for developing countries.”
In support to Ukraine in the war against Russia, the EU has imposed several rounds of sanctions on Moscow. The measures have targeted the energy sector, banks, the world’s biggest diamond mining company and other businesses and made Russian officials subject to asset freezes and travel bans.
World food prices hit record level as a result of the Russian invasion of Ukraine combined with other factors but have since fallen from record highs in 2022.
While the EU did not ban exports of Russian food or fertilizers to non-EU nations as part of its sanctions packages, Moscow blamed the EU for the global food shortage.
EU officials said the tariffs on Russian grain will not affect trade with third countries, and that the transit through the EU will remain unhindered.
“The proposed tariffs will therefore not affect global food security, particularly for developing countries,” the EU Commission said. “On the contrary, they are expected to create an incentive for Russia to export to non-EU destination markets, including developing countries.”
