The EU and Ukraine have recently agreed to review the Deep and Comprehensive Free Trade Agreement (DCFTA), the core trade pillar of Ukraine’s Association Agreement with the EU. While the agreement stops short of full trade liberalisation, it offers more predictability and helps contain political tensions contributing to Ukraine’s deeper integration with the EU.
Before the war, the DCFTA helped double trade flows between Ukraine and the EU, with EU exports to Ukraine growing by 106 % and imports from Ukraine rising by 92 % in 2021 compared to 2015 levels. Following Russia’s full-scale invasion, the EU introduced Autonomous Trade Measures (ATMs), offering full trade liberalisation on a temporary basis.
While these measures provided crucial short-term support, political tensions in the EU have prompted both sides to look for a more stable and long-term solution, resulting in the decision to review the DCFTA – which will ultimately benefit both sides.
Full liberalisation… with strings attached
ATMs have provided unprecedented support to Ukraine by suspending import duties, quotas and trade defence measures on all Ukrainian goods, renewed annually. Solidarity Lanes also offered vital logistical solutions for Ukraine’s agricultural exports. These measures deepened Ukraine’s integration into EU supply chains.
Regarding exports, EU sales to Ukraine grew by 51 % compared to pre-war levels, driven by Ukraine’s demand for energy, machinery and manufacturing goods to support its wartime economy, quadrupling the EU’s trade surplus with Ukraine. The most significant increases were in energy exports, following Ukraine’s synchronisation with the European electricity grid. EU agri-exports also grew steadily, including processed agricultural products, dairy products, fresh fruit and vegetables, and meat products and preparations, reaching around EUR 300 million per category in 2024.
Meanwhile, Ukraine’s exports to the EU grew modestly by 2 % from 2022-24. However, this overall growth masks a surge in agricultural exports, which more than doubled in 2024 (a 117 % increase compared to pre-war levels). Pre-war, Ukraine already accounted for a substantial share of EU agricultural imports: 88 % of sunflower oil, 51 % of maize, 40 % of rapeseed and 36 % of soybean oil. These all increased under ATMs, ranging from a 6 to a 17 %-point increase in Ukraine’s share in EU agri-imports.
The EU is maintaining a positive trade balance with Ukraine across all products, except for agriculture, where Ukraine remains a net exporter and thanks to ATMS, managed to expand its surplus.
This raised concerns in bordering EU countries, where Ukrainian exports were seen as displacing local production. This quickly became politicised, with Ukrainian grain becoming an issue in the Polish general election and causing tensions in Slovakia and Hungary. The EU eventually phased out ATMs on several sensitive agricultural products. Poland, Hungary and Slovakia also imposed unilateral import bans on selected Ukrainian agricultural products.
What the review means
Due to ATMs’ political sensitivities, Brussels and Kyiv are pursuing a more stable and systemic solution with the DCFTA review. In the interim, trade reverts to the original DCFTA terms – with the sole exception of iron and steel imports.
Under the original DCFTA, matching the ATMs’ access levels would have required the EU to remove the remaining 5.3 % of tariffs on industrial goods and 16.6 % of agricultural tariff lines, including all tariff rate quotas (TRQs) – a major barrier for Ukraine’s agricultural exports. TRQs should be expanded through the review, with full liberalisation only applying to non-sensitive goods (like selected dairy products).
Estimates suggest that by applying TRQs under the reviewed DCFTA, Ukraine’s exports could fall by approximately USD 1.2 billion, a 2.9 % decline in overall exports. This would translate into around USD 68 million in lost tax revenues.
Unlike the ATMs, which were unilateral EU measures, the DCFTA review introduces reciprocal liberalisation. This means Ukraine would also need to open its market to EU exports. EU exporters will benefit from lower tariffs, full liberalisation on some goods and additional quota volumes at preferential tariffs for poultry, pork and sugar. And of course, reciprocal liberalisation will only increase EU exports.
The revised DCFTA will also come with a built-in safeguard clause – if new trade concessions start to hurt domestic industries on either side, the EU or Ukraine can trigger protective measures, providing a framework for resolving disputes at EU level and to prevent unilateral bans by individual Member States.
A boon for both sides
Ukraine stands to gain more from the revised DCFTA than from the original but less than it did under the ATMs.
Suspending the ATMs has hit agricultural exports the hardest. For Ukraine’s wartime economy, extending them would undoubtedly bring more short-term gains. But trade, especially in wartime, is never just about economics – it’s also about politics.
Here, the DCFTA review strikes a more sustainable political balance: it eases Ukraine’s access to the Single Market within a framework that reassures Member States. Unlike the temporary and politically sensitive ATMs, the revised DCFTA offers predictability and helps contain political tensions, which in the medium-to-long-run will deliver greater economic benefits.
Still, the DCFTA review falls short of the ATMs’ full trade liberalisation, meaning Ukraine must deepen regulatory alignment – particularly on sanitary and phytosanitary measures, technical barriers to trade, and by signing the Agreement on Conformity Assessment and Acceptance of Industrial Products (ACAA), expected by the end of 2025. This would expand market opportunities and accelerate Ukraine’s regulatory convergence with the EU, which is important for its membership aspirations.
At the same time, the lack of full trade with the EU underscores the urgency of diversifying Ukraine’s export destinations. Accelerating reconstruction is essential for reducing bottlenecks and supporting Ukraine’s global competitiveness.
From the EU’s perspective, the DCFTA review will benefit European producers by easing market access and boosting exports to Ukraine, in industrial and agricultural products, further reinforcing the EU’s positive trade balance.
Finally, the review introduces a framework for monitoring how trade evolves under agreed conditions – a reality check that integrating into the EU single market is both measurable and mutually beneficial.
In agriculture, Ukraine may remain a net exporter, yet its trade surplus is expected to shrink due to the ATMs’ suspension, once again tilting the balance in the EU’s favour.
And we shouldn’t forget that Ukraine is the EU’s third-largest import partner after Brazil and the UK – which means Europe needs Ukrainian agri-food products.
And that’s why the DCFTA shouldn’t be politicised – ultimately it will benefit both sides, especially as Ukraine continues its valiant struggle.
Note: All figures, unless otherwise referenced, are the author’s calculations based on data provided by Eurostat.
