Characteristics of the updated trade agreement

between Ukraine and the European Union

(in the part concerning dairy products)

On October 29, 2025, the updated trade agreement between Ukraine and the European Union officially entered into force, significantly changing the parameters of foreign trade, including trade in dairy products.

This was preceded by the adoption, on October 14, 2025, of Decision No. 3/2025 of the EU–Ukraine Association Committee in Trade Configuration regarding the reduction of customs tariffs and the increase of export quotas for agricultural products from Ukraine to the EU, in accordance with Article 29(4) of the EU–Ukraine Association Agreement.

The key parameters of Decision No. 3/2025 are as follows:

  • First, regarding the EU tariff schedule, for the purposes of Article 29 of the Agreement, the EU fully eliminates customs duties on all goods originating from Ukraine, except for the goods listed in the “Tariff schedules of the EU.” For dairy products, unlimited duty-free imports will not apply to tariff lines (subheadings) for which quotas are established, namely:

TRQ1 — Milk, cream, and condensed milk (15,000 t, net weight)
TRQ2 — Skimmed milk powder (15,400 t, net weight)
TRQ3 — Butter and dairy spreads (7,000 t, net weight)
TRQ4 — Processed butter (375 t)

At the same time, quota volumes have significantly increased under the updated agreement:

  • TRQ1 — increased 1.5 times (with cultured dairy products removed from this quota);
  • TRQ2 — increased 3.08 times (with SMP removed from this quota);
  • TRQ3 — increased 2.33 times;
  • TRQ4 — increased 1.5 times.

The updated trade agreement stipulates that for 2025, the volume of tariff quotas will equal 7/12 of the revised quota volumes listed in Annex I-E to the Agreement (taking into account the volumes already supplied since June 6, 2025).
In particular, for SMP, the additional quota volumes for November–December exceed 6,000 t, whereas 2.92 thousand tons were exported from June 6 to mid-August (when the quota was exhausted).

  • Second, regarding the EU tariff schedule, the import duty rates for tariff lines (subheadings) subject to quotas remain unchanged — in particular:
    • for SMP: €118.8/100 kg
    • for butter: €189.6/100 kg
  • Third, regarding Ukraine’s tariff schedule, import duty rates have significantly decreased, including:
    • for drinking milk and cream — from 10% to 4% (by 2028);
    • for milk powder — from 10% to 4% (by 2028);
    • for butter — from 7–8% to 3% (immediately);
    • for processed cheese — from 5% to 3% (immediately).
  • Fourth, the updated trade agreement provides that in 2028, the Parties will assess the extent to which the agreed reductions and eliminations of duties reflect the dynamic nature of bilateral trade relations, particularly considering Ukraine’s progress in the accession process, and will consider further accelerating and expanding duty elimination under Article 29(4).
    This includes Ukraine’s compliance with EU requirements regarding animal welfare, with the reporting deadline set for December 31, 2028.

APPENDIX CHARACTERISTICS OF THE CONDITIONS OF THE UPDATED TRADE AGREEMENT