Home Business Brussels wants to suspend all customs duties for Ukrainian products

Brussels wants to suspend all customs duties for Ukrainian products

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It is “an unprecedented gesture of support for a country at war”, according to the European executive. The European Commission proposed this Wednesday, April 27 to suspend for one year all customs duties on Ukrainian products imported into the European Union in order to support the economy of Ukraine, attacked by Russia.

This proposal still needs to be approved by the European Parliament and the 27 member countries. The United Kingdom had already announced on Monday the elimination of its customs duties on products imported from Ukraine.

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Commission President Ursula von der Leyen said she introduced the measure after talks with Ukrainian President Volodymyr Zelensky. “We both agree on the crucial importance of a suspension of customs duties to support Ukraine’s economy”she said.

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EU imports reached €24.1 billion in 2021

Bilateral trade between the EU and Ukraine represented 52.4 billion euros of exchange in 2021, against 26.2 billion in 2015, according to Eurostat statistics.

Imports from Ukraine to the EU reached 24.1 billion euros in 2021. Among the most imported products are iron ore, metallurgical products and agricultural products (such as vegetable oils) .

Since late February and Russia’s outbreak of war, Ukraine’s agricultural and industrial production has been hit hard. But also its commercial relations with the rest of the world, the country’s access to the sea being notably blocked by the Russian navy.

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Ukraine’s GDP is set to collapse by 35% in 2022

Ukraine’s gross domestic product (GDP) is set to collapse by 35% this year, according to a forecast by the International Monetary Fund (IMF) published on 19 April.

“It is impossible to obtain precise data on the damage caused to the economy”, underlined the IMF. But given the massive destruction of infrastructure and the millions of people displaced, the institution warned that the contraction would be ” very severe “.

The impact will also be long-lasting: “Even if the war ended soon, the loss of life, destruction of physical capital and flight of citizens will severely hamper economic activity for many years to come”warned IMF experts.

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