"The exacerbation of the tension at the border with Ukraine has origins that go back a few years. While, on the one hand, it would be preferable for everything to be resolved quickly through diplomatic channels without further conflict, on the other hand, attention must be paid to avoid agricultural products being treated as mere bargaining chips during negotiations," explains economist Gianluca Bagnara, who has been following the Ukraine market for over 10 years.
"On a macroeconomic level, Ukraine is a net importer of goods and services from Europe: its imports are worth over €23 billion and its exports are worth €16 billion, with an increasing trend over the past 10 years. It mainly imports manufactured products, machinery, and vehicles, plus chemical products. Poland, Germany, and Hungary are its main commercial partners within the EU."
"Given the situation of crisis that sees Ukraine as a buffer state between the countries part of the North Atlantic Treaty and Russia, and advocating a diplomatic solution, concessions and economic aid will probably be granted to Ukraine, where the agricultural sector becomes a bargaining chip, as is often the case for international agreements."
According to Bagnara, crucial for future negotiations is to include reciprocal agreements rather than mutual recognition. "This means that, as trade is discussed again, if Ukraine exports fresh produce and other agricultural products to Europe, it will do so respecting the rules, protocols and quality standards in place in Europe. 'Mutual recognition', i.e. accepting an imported product that complies with the rules of the other nation, must not be given the go-ahead."
Over the past few years, Ukraine focused a lot of dried fruit, walnuts in particular. Compared to the produce from California, they have a cheaper logistic cost and could become an item exported to the European Union in the future.