International Trade in the Face of War: Agricultural Trade Relations of Ukraine and the EU Countries
DOI:
https://doi.org/10.7160/aol.2026.180205How to Cite
Abstract
The outbreak of war in Ukraine in 2022 significantly reshaped agricultural trade dynamics between Ukraine and the European Union (EU). The main goal of this study is to examine the factors associated with increased exports of Ukrainian agricultural products to EU countries in light of the complex situation that includes the outbreak of war, trade liberalization, and provisional trade bans. The study employs a gravity model to analyze Ukrainian imports of selected agricultural products to EU countries, using monthly data from 2020 to 2023. The Poisson Pseudo-Maximum Likelihood model with high-dimensional fixed effects is utilized. EU countries that are more geographically distant significantly increased their imports of Ukrainian agricultural products, driven by a higher market absorption capacity and robust infrastructure, challenging the traditional assumptions of gravity models. Meanwhile, Ukraine's neighboring countries played a crucial role in absorbing Ukrainian exports due to logistical advantages, regulatory support, and the suspension of tariffs. However, the main effect of trade intensification for these countries was primarily observed in the first year of the war. This study makes a novel contribution by examining the cumulative effects of distance, war, and liberalization on trade volumes, marking the first such analysis in the context of EU-Ukraine relations. The use of monthly data enables us to accurately capture short-term changes in trade, both before and after the onset of the war, offering new insights into how crises reshape trade patterns.References
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