The European Commission has approved the final text of the Special Agreement on the Liberalization of Road Transport Ukraine – EU.
The document provides for the performance of bilateral and transit traffic by Ukrainian carriers without permits.
Why is this important?
The lack of permits for international freight provided by the country of crossing has been one of the key problems for the development of international freight in Ukraine. Since the signing of the Free Trade Agreement between Ukraine and the EU in 2016, trade with the European Union has almost doubled, and the number of road transport – by 42%.
At the same time, the number of permits for international transportation to individual EU countries not only did not increase, but even decreased. Every year, this led to large losses for both Ukrainian carriers and the country’s economy as a whole.
Polish bilateral permits have always been the most scarce and in demand. To meet all the demand for transportation to Europe in a growing market, Ukraine needs at least 230-260 thousand Polish permits per year. However, in 2018 the Ministry of Infrastructure and Development of Poland issued only 200,000 such permits, and in 2019 reduced their number to 160,000.
Since then, the number of additional permits for Ukraine has been decreasing every year. In particular, 10,000 permits were issued in 2019, and 9,700 in 2020. The situation became critical in 2021, when for the first time the Polish side did not issue any additional permits for Ukraine.
A similar problem existed with Romanian, Austrian, and Italian permits.
Moreover, in the context of a full-scale war and the blockade of Ukrainian ports, the volume of road exports and, as a result, the need for permits for international transportation in some areas has increased several times.
How does the Agreement with the EU solve this problem?
Further development of the road transport market required either a revision of existing international commitments to increase quotas or the conclusion of new ones that would allow the development of the industry.
In 2020, BRDO experts in the Green Paper “International Road Freight” have identified ways to address the lack of permits at the international and domestic levels.
In particular, according to our experts, at the international level this problem could be solved by:
- increasing the number of ECMT permits (European Conference of Ministers of Transport) for Ukrainian carriers;
- expanding the membership of the Treaty on the European Transport Community;
- signing a separate agreement with the EU in the framework of the Association Agreement on the liberalization of road transport, such as the Common Aviation Area Agreement;
- diversification of destinations and increase of the quota in other countries neighboring Poland;
- liberalization of freight traffic, at least transit;
- issuance of multiple permits under bilateral agreements.
The full text of the study can be found at regulation.gov.ua
A special Agreement on the liberalization of road transport between Ukraine and the EU will finally solve the above problems and allow the development of the road transport market. The document eliminates the need to obtain appropriate permits on a permanent basis and will avoid stopping the export of Ukrainian products through road checkpoints.
We expect to sign the document in late June.