“European Grain Dispute”: A Chance for Moldova?

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Vladimir ROTARI
Amid the acute “grain conflict” between Ukraine and neighboring EU member states, Moldova remains one of the few export destinations for Ukrainian agricultural products. This creates obvious advantages for us to, at the very least, bargain with Kyiv for some easing for our farmers, but so far, the Moldovan authorities are in no hurry to use them
One of the main European topics of recent weeks has been the rather acute conflict between Ukraine and several Eastern European EU members. The subject of the dispute is Ukrainian agricultural exports. As is known, with the beginning of the Russian invasion of Ukraine and the blockade of Black Sea ports, the scheme of agricultural supplies from this country underwent significant changes. Due to the so-called “solidarity corridors”, Ukrainian grain began to enter almost uncontrollably the markets of the nearest European countries - Poland, Hungary, Slovakia, Romania and Bulgaria - and becomes stuck within their borders in large volumes. Taking into account that all these countries have their own powerful agricultural sectors, this state of affairs has created a noticeable tension. Due to the cheapness of Ukrainian products, domestic prices were falling, while Eastern European farmers began to complain of heavy losses and the threat of bankruptcy. The grain deal helped reduce the problem somewhat, but after its termination this year, the five Eastern European countries promptly restricted exports of Ukrainian crops (wheat, rapeseed, corn and sunflower). Despite the European Commission’s discontent, it eventually had to accept this state of affairs and “legalize” the ban, which lasted until 15 September. The EU also allocated aid to support the affected farmers. The “Group of Five” probably expected the ban on Ukrainian grain to remain in place beyond that date. However, the European Commission unexpectedly decided not to extend the ban, arguing that “market distortions” were no longer observed and Ukraine pledged to take all necessary measures to prevent a sharp increase in its exports. This decision obviously provoked negative reaction from Ukraine’s neighboring countries, but their responses varied. For instance, Bulgaria did not dare to proceed unilaterally, facing massive farmer protests, while Romania, regretting the EC’s decision, took time to think about what to do next while waiting for Kyiv’s action plan on export controls. On the other hand, Slovakia independently extended the bans that had been applied earlier, while Hungary and Poland also expanded the range of banned products: Budapest added 25 items, while Warsaw added flour and fodder, a painful measure for Ukraine given the structure of Ukrainian exports to this country. “Grain clashes” between all these countries were eventually predetermined. In fact, the traditional European agricultural players and Ukraine are natural competitors in the European Union market, and only the war-related political reasons have contained the outbursts of mutual discontent until now. Ukraine reacted rather negatively to the actions of its neighbors, filing a lawsuit with the WTO on 18 September and threatening to impose its own restrictions. However, this did not impress the Poles, who quickly escalated the conflict: they cancelled benefits for refugees from 2024, hinted at termination of military support and further trade embargoes. In addition, Polish politicians made a number of extremely unpleasant statements for Kyiv: President Andrzej Duda (who tellingly did not meet with Volodymyr Zelensky on the margins of the UN General Assembly) particularly stood out by comparing Ukraine to a “drowning man” who is “incredibly dangerous and can drag those who try to help him down to the depths”. It seems that the public mutual harshness will not last long, and they will try to tone the dispute down as soon as possible. In part, it is already happening. Ukraine has promised to withdraw its WTO lawsuit against at least Poland and Slovakia, and to work with these countries on a model for the Ukrainian grain imports that would suit everyone. It is easy to notice that Kyiv ended up as a losing party which had to make obvious concessions. It seems that local politicians somewhat miscalculated their potential, and their usually effective “emotional diplomacy” did not work. Ukraine’s threats did not frighten the countries that initiated the ban and that’s why they were ready to escalate the situation further. Most likely, the position of international partners was also an unpleasant surprise for the Ukrainian president’s office. The White House called the bans a “sovereign decision of countries”, while the European Commission was bracing to defend its members in the WTO. The statement made by the Polish deputy foreign minister in an interview that Warsaw expects the USA to intervene in order to “cool down Ukrainian daredevils” is an illustrative example as well. I think our politicians should roughly understand the feelings of Kyiv, which was treated rather harshly, as recently we were in its place, although at that time Ukraine itself was the “attacker”. I refer to the situation when Moldova decided to join the general trend of banning Ukrainian imports in an attempt to protect local producers. In response, the neighboring state threatened us with a complete halt of mutual trade, after which Chisinau did not consider such a possibility any more. Nevertheless, since then, as we can see, much has changed and Kyiv’s plight has worsened. Moldova is now, in fact, the most important and one of the few remaining real destinations for the transit of Ukrainian grain abroad. The fact that Kyiv has big plans for us is also evidenced by the repair of the railway bridge near the Cuciurgan village, which was blown up last year - that is, to maximize exports, there are apparently plans to transport Ukrainian grain through the Transnistrian section as well. In this situation, Chisinau has a natural advantage and an opportunity, if not to dictate terms, then at least to try to improve its own situation from a stronger position. It may seem morally wrong for someone to take advantage of the neighbor’s problems, but politics is the art of the possible, and statesmen should, first of all, adhere to the needs of the country they represent. It is what we see in the case of Poland, which, as one of Ukraine’s main European allies, does not hesitate to resort to harsh measures when it comes to protecting its interests. We should realize that Moldovan farmers are still under the pressure of many factors, among which uncontrolled and cheap Ukrainian import is one of the most important. Therefore, our agrarians continue to insist on its restriction by the state, claiming that otherwise they will face unacceptably high losses and mass bankruptcy. Unfortunately, there is still no sign that the PAS has reconsidered its current position and returned to the April-May ideas of introducing targeted bans or, at the very least, has not started negotiations with Kyiv on the creation of special import control mechanisms, similar to Warsaw and Bratislava. Instead, the authorities suggest that farmers cooperate, believing that only enlarged farms will be able to cope with their problems independently due to their financial strength, ban the cultivation of certain crops in climatically unacceptable zones, and provide little monetary aid, which is also largely bureaucratized. That’s obviously not enough. It is not clear why official Chisinau is still taking such a passive and, to some extent, even cowardly position, not trying to capitalize on the current situation. It is clear that support for Ukraine has been elevated to the status of a state ideology, but still, the plight of domestic agrarians amidst a deep economic recession should outweigh any foreign policy issues. Or is the fear of offending Kyiv so great that we will continue to adrift with our hands tied behind our backs?