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On 29 October, a revised EU-Ukraine trade agreement came into effect. The current agreement is an updated version of the EU-Ukraine Deep and Comprehensive Free Trade Area (DCFTA), envisaged as a key pillar of the EU-Ukraine Association Agreement that was negotiated in 2014 and fully implemented in 2017.
Since Russia invaded Ukraine in February 2022, EU trade with Ukraine has taken place under a temporary framework of “Autonomous Trade Measures” (ATMs), which remained in place from June 2022 until June 2025 to sustain Kyiv’s wartime economy. Driven by Moscow’s blockade of Kyiv’s key trading routes through the Black Sea, these measures suspended duties and quotas in favour of full trade liberalisation aimed at supporting the Ukrainian economy through preferential market access. At the end of June 2025, the EU and Ukraine agreed to review the DCTA, with the new text adopted through qualified majority in the European Council and binding for at least three years.
The EU and Ukraine agreed to review the DCTA, with the new text adopted through qualified majority in the European Council and binding for at least three years.
As a longer-term legal framework, the modified DCFTA is a crucial step towards supporting Ukrainian access and gradual integration with the EU Single Market through enhanced trade liberalisation, while laying the groundwork for Ukraine’s eventual accession to the EU. In June 2022, the European Council granted Ukraine EU candidate status, and formal negotiations began in June 2024.
A Revised DCFTA
In 2024, the EU was Ukraine’s largest trading partner, accounting for over 50 percent of the country’s total trade in goods (compared to 39 percent in 2021), while Ukraine was the EU’s 16th largest trading partner, comprising 1.3 percent of the EU’s trade in goods. Meanwhile, EU-Ukraine trade in goods was valued at €67.2 billion in 2024. In agriculture, the most contentious sector, the ATMs yielded a 117 percent increase in Ukrainian agricultural exports to the EU compared to pre-war levels, resulting in Ukraine becoming the third-largest source of EU agri-food imports after Brazil and the United Kingdom.
The modified agreement is framed around three key pillars: 1) increased trade flows; 2) Ukrainian alignment with EU production standards on animal welfare, environment protection, and the use of pesticides by 2028 (progress on this would be regularly monitored); 3) safeguard mechanisms to protect domestic industries and address sensitivities, particularly from Ukraine’s neighbouring countries likely to be most impacted by disruptions and competition from Ukrainian exports.
The new agreement imposes lower tariff-rate quotas on sensitive products such as wheat, honey, sugar and eggs.
The revised agreement strikes a balance between the two previous arrangements: granting enhanced market access compared to the original DCFTA, but reduced compared to the ATMs. For instance, the new agreement imposes lower tariff-rate quotas on sensitive products such as wheat, honey, sugar and eggs. It is also reciprocal in nature and implies a reduction of Ukrainian tariffs on European products such as poultry, sugar and pork. Meanwhile, it also involves supporting Ukraine in expanding its trade with third countries and contributing to global food security. Overall, the new agreement offers a more sustainable long-term EU-Ukraine trade regime.
Striking a Balance
Yet the agreement is not without challenges. Despite its enshrined safeguards, Ukraine’s neighbouring countries, Poland, Hungary and Slovakia, have maintained their individual bans on agricultural imports from Ukraine. These national bans were imposed in September 2023 after a dramatic increase in Ukrainian agricultural imports, driven by the ATMs, triggered a political backlash through farmer protests and blockades, and became an electoral issue in countries such as Poland. This forced the European Commission to enact emergency brakes aimed at restricting Ukrainian agricultural exports to the EU. In the wake of the new agreement, the European Commission considers a continuation of these national bans as breaching the EU Single Market and is reportedly open to legal action against these countries, despite perceptions that the EU is prioritising Ukraine over the interests of member states.
There are also concerns about Ukraine’s agricultural capacity of 42 million hectares of land, impacting the EU Common Agricultural Policy, where funds are distributed on the basis of farm size. On the other hand, as Ukrainian agricultural exports are not subject to the same stringent standards as EU exports in the interim, these may adversely impact EU agricultural exports.
As Ukrainian agricultural exports are not subject to the same stringent standards as EU exports in the interim, these may adversely impact EU agricultural exports.
Yet the agreement does attempt to strike a balance between supporting Ukraine and integrating it more closely with the EU, while taking into account concerns of member states and ensuring protections through safeguard clauses. According to EU Trade Commissioner Maroš Šefčovič, the agreement “represents the best possible outcome under difficult geopolitical conditions.”
Deepening integration with Ukraine is also a means to enhance European strategic autonomy and values-based engagement in light of geopolitical tensions and the weaponisation of trade. Meanwhile, sustained economic cooperation with Ukraine is expected to deliver strategic benefits through increased food and economic security and competitiveness. Ultimately, a strong Ukrainian economy is also in the EU’s interest.
Shairee Malhotra is Deputy Director – Strategic Studies Programme at the Observer Research Foundation.
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