EU envoys strike new deal on Ukraine food imports

WARSAW/BRUSSELS, March 27 (Reuters) - Ambassadors from European Union countries reached a revised deal on Wednesday to extend tariff-free food imports from Ukraine - with restrictions - after some states complained the original agreement risked destabilising the bloc's agricultural markets.

The agreement now goes to the European Parliament, where diplomats expect a push to add more restrictions, as the EU wrangles over how to continue with exemptions granted in 2022 to help Ukraine's economy following Russia's invasion.

Some EU farming groups and countries such as France and Poland had argued the measures needed to be tightened to avoid making EU agricultural products uncompetitive. Ukraine and others argue the imports have little effect on EU markets.

An EU diplomat said the new deal - which would run until June 2025 - was similar to a provisional agreement struck last week but changed the reference period used to determine when tariffs on some products would be applied.

The original deal stipulated that tariffs would kick in on poultry, eggs, sugar, oats, maize, groats and honey if imports exceeded the average levels of 2022 and 2023.

The compromise expands the reference period to include the second half of 2021, the diplomat said. That lowers the ceiling for the application of tariffs.

Belgium, which holds the EU's rotating presidency, said the agreement secured "a balanced approach between support for Ukraine and protection of EU agricultural markets".

It is estimated to cost Ukraine about 330 million euros ($357 million) in annual revenue - although the continued overall suspension of tariffs is worth much more to Kyiv.

No products were added to the list of those potentially subject to tariffs despite pressure from some countries, the diplomat said, speaking on condition of anonymity to discuss the confidential discussions.

Earlier this week, both France and Hungary said wheat should be subject to tariffs if imports rose above average levels.

The issue of food imports has sparked tensions between Ukraine and Poland, an otherwise staunch supporter of Kyiv.

Polish Agriculture Minister Czeslaw Siekierski was due to meet his Ukrainian counterpart, Mykola Solsky, on Wednesday afternoon, with the governments of the countries due to convene on Thursday.

Siekierski said that Ukraine wanted to maintain a liberal approach to trade while Poland thought that things like humanitarian and military aid should be treated separately from food exports to protect farmers' livelihoods in central and eastern Europe.

Polish farmers say that much of the Ukrainian grain that is supposed to transit through Poland to other countries ends up in the domestic market instead.

Ukraine says farmers' protests, which have included blockades of the border and the spilling of Ukrainian grain across rail tracks, are harming its war effort against Russia and its economy. It also says that only a small portion of the grain it exports transits through Poland.