Polish hauliers' border blockade becoming a new flashpoint between Warsaw and Kyiv

Polish hauliers' border blockade becoming a new flashpoint between Warsaw and Kyiv
More than 2,000 Ukrainian trucks are stuck at the Polish border in an increasingly bitter trade dispute. / bne IntelliNews
By bne IntelliNews November 12, 2023

Polish truckers are blocking the border with Ukraine, preventing thousands of Ukrainian trucks from crossing in an increasingly bitter dispute between the otherwise close allies.

Some 2,000 Ukrainian trucks are stuck at three crossings after Polish haulage workers launched protests under the banner of the "Committee for Defence of Truckers and Employers in Logistics." This group, previously unknown in the public domain, is organising the demonstrations without any formal backing from politicians or political parties.

The protest measures affect traffic in both directions at crossings in Dorohusk and Hrebenne-Rawa Ruska, as well as outbound traffic through Korczowa.

The demonstrators' key demands include: restrict entry for Ukrainian trucks into Poland by introducing permits; and ban the creation of trucking companies in Poland with capital from outside the European Union.

Both of these demands are protectionist in nature, aiming to safeguard the interests of Polish truckers while potentially affecting Polish consumers.

Polish truckers are particularly sensitive to the increased competition from Ukrainian trucks after sanctions led to the loss of significant business, carrying goods to Russia and Belarus, which they're struggling to replace.

An owner of a Polish haulage company and head of a driver association in the eastern Polish city of Siedlce told Reuters that the protest was a grassroots initiative and reflected a wider issue of Polish transport companies losing markets east of Poland, due to the Russian sanctions.

The background of this issue can be traced back to 2016, when the Deep and Comprehensive Free Trade Area between Ukraine and the EU came into effect. At that time, Ukraine was granted a quota of 200,000 permits for border crossings into Poland.

However, in the subsequent years from 2016 to 2021 Ukraine's trade with the EU saw significant growth, expanding by 45%. During this period, Poland increased permit quotas for Russia and Belarus while reducing Ukraine's Polish permit quota to just 120,000, a move that violated international agreements, according to Tymofiy Mylovanov, rector of the Kyiv School of Economics (KSE) and former economics minister.

“This reduction in permit quotas had a substantial economic impact, resulting in approximately €500mn in lost trade for Ukraine. In response, Ukraine appealed to the European Commission over the violations of the permit system and initiated negotiations to address the issue,” Mylovanov said on social media.

The problem of quotas for Ukrainian trucks was resolved in June 2022 when a freight transport agreement between Ukraine and the EU came into effect, effectively eliminating the need for permits altogether. Traffic soared.

Poland has been one of Ukraine’s most ardent EU supporters in its fight with Russia; however, its fervour cools when that support encroaches on Polish business.

In April Poland imposed a ban on the import of Ukrainian grain that was supposed to transit the country to get to international markets, after the cheap grain collapsed Poland’s domestic grain market.

The European Commission stepped in and imposed a five-month ban on Ukraine’s grain into the EU, but when that ban expired on September 15 Poland unilaterally and illegally extended it indefinitely. Ukraine retaliated by suing Poland, Slovakia and Hungary, which have all imposed the ban to protect their domestic farmers.

Polish truckers see themselves as in the same boat as the farmers. "Now these companies are doing whatever they want. There is a complete, uncontrolled influx, just like with grain," said Jacek Sokol, protest co-organiser and deputy head of the Committee to Protect Transporters and Transport Employers, as cited by Reuters

An average of 40,000-50,000 trucks cross the border with Poland per month via eight existing crossings, twice as many as before the war. Most of the goods are carried by Ukraine's transport fleet, according to the Ukrainian Infrastructure Ministry. 

The new trade row caused by the surge in Ukrainian trucks flowing through Poland to Western European markets underscores the difficulties Ukraine will face in its EU accession bid, which kicks off with the start of formal negotiations in December. EC President Ursula von der Leyen recommended the EU bring Ukraine into its family during a trip to Kyiv last week.

On its accession, Ukraine will become one of the largest countries in the EU, ahead of Germany and Poland, and as such will consume huge resources in the form of the infrastructure and agriculture grants.

As an agricultural powerhouse, Ukraine is expected to swamp EU producers with its huge volume of production at significantly lower prices. Current net recipients of EU funds like Poland and Hungary will almost certainly become net contributors to the EU budget in order to pay for Ukraine’s membership.

In the meantime, Ukrainian and Polish ministers are engaged in discussions to resolve these trade disputes. Kyiv is adamant there will be no return to the truck passage permit system, pointing out the previous regime was already violating trade agreements.

The blockage of Ukrainian trucks and hence exports comes at a time when the Ukrainian government is under enormous financial pressure as it attempts to pay for its war with Russia. Moscow’s embargo on seaborne exports of grain has already resulted in Ukraine running a growing trade deficit, and the Polish truck dispute will only make that worse.

The Ukrainian ambassador to Poland blasted the blockages at the border as a "painful stab in the back of Ukraine."

The blockade is just an opportunity to block the border for Ukrainian competitor truckers, Ukraine's Deputy Infrastructure Minister Serhiy Derkach was quoted by local media as saying. They account for 85% of those who cross the Ukrainian-Polish border to bring goods into Ukraine or export goods, he added.